Well from Sony's standing, they're improving but not recovered. Their back up plan and only trump card might be working after all. Here's what I think.
After a 1 year release and having not so good sales on hardware and common sense, software as well. From the start of their release, people we're rampant about the price point and the forced push with blu-ray. Blu-ray as we know it made the price hike of the PS3 (which was also caused by the lack of lenses I think). Unlike the 360 it never forced the push of HD-DVD and the Wii having nothing to do with the format war, making it the cheaper choices for a console. Let's get to the point.
PS3 might have an edge in the long run. If the format war was an ensured victory for the blu-ray then that'd be one less problem to handle. Picture this, mainly DVD's were quickly pushed in the mainstream because of cheap players. And probably one of them is the PS2. I haven't found out yet why the PS2 still selling strong(Is it because of the cheapest console out there?/cheapest DVD player?/gamers who want to catch up with the games they missed?). Any of those reasons contribute to sales. Let's try to think of long run, and let's say 5 years from now people upgraded to HD and Blu-ray did win HD format. The cheapest choice of HD entertainment and future proof player is the PS3. Let's say the games division did well and I'm pretty sure hardcore gamers will want to pick this up and play what they might've missed out on. Sales would still be flow steadily strong even though it's passed it's prime as a game console.
Consider this point of view. Some Hardcore gamers(sony fan boys) might pick up 360 and Wii, but only for games. Let's not put aside that perspective that HD DVD did lose, would those who purchased a 360 be willing to buy an add on HDDVD drive to play movies. Common sense tells me NO(but there are those that who are special
). Although the Wii has no format war involvement so it's all about games. How about other subjects, who purchase a PS3 5 years from now. There possible reasons either for Hi Def Movies or catching up on games or even both. So it leaves three options whereas the other two, one or two options. These options I said are those that help sales. In everything you buy there is a motive.
So I think what Sony is doing is focusing in long term run rather than the shorter term. Looking at the game division of PS3, the line up is getting chunky so expect more blood to be drawn. Well that about wraps it all. I hope to hear you're comments on what I think. Thanks.
