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1. They haven't lost the lead. The PS3 is still on track to beat the Xbox 360. It will since there's no way the Xbox 360 will get a 250k lead for these last 2 weeks of the year. Plus the PS3 is definitely a bit undertracked. So at worst, it would be a statistical tie.
2. Too much competition I guess. How much money did they spend on 3D R&A? I'm guessing A LOT!