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An important question is where are these PS3 buyers going to come from?

The PS3 is not designed (or attempting) to appeal to a new demographic so any increase in sales will have to come at the expense of another system. I don't really think the PS3 can steal sales from the Nintendo DS or Wii mainly because what sells each of these systems is so drastically different from the PS3; people who are buying a PS2, XBox or Gamecube right now are unlikely to buy a PS3 in the near future because they're budget gamers (and any system over $200 is out of their price range). What this means is that the PSP and XBox 360 are the most likely systems for the PS3 to canabalize sales from.

The XBox 360 has a larger and better game library, a lower price (potentially getting lower in the near future), similar third party support, a strong line up of first party games, and is being pushed by a company with money to burn in exchange for marketshare. Sony will have their hands full to steal sales from the XBox 360.