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That's right the only problem of the PS3 is the price, nothing else because they can have the better hardware/software/content in every aspect for the futur... soon a more complete controlller, Home communauty, free online, Ps Eye, Sony Worldwide Studios , SOE, PSP/PSP2, MGM, Colombia, Sony Music, VAIO, Sony Ericson, best retro with PS1/PS2 maybe PSP one day, fiability and silence of the hardware, HDMI 1.3, low cost HDD, blu ray, bluetooth, Wifi, card reader, Linux, the Brand, etc... So much potential.
MS will not win mass market with FPS, a defective 360 with multiple models and an online service you must pay... It's just for hardcore gamers who mostly owns every systems.

The 360 has an advance because of the 1 year older.
The PS3 sells like the 360 last year but they have 200$ or 300$ more in the price... no christmas in Europe, 5 month late in europe, Wii and 360 to compete, bad image because of fanboys and FUD on the internet, big games not already out, new technology not mainstream, multi-platform games.... I think with all that it sells very well.

So with the price drop, christmas everywhere, great big games optimised for the PS3, online distribution, Home, new 6axis, better image, more HD-TV and Blu Ray content... They can win this generation.

There's not far from 200 millions consoles to sell this generation and were're just at 21 millions... we're far from the end... MS will not sell a 720 soon.. the PS2 continue to outsell the 360 in so much country...

Real next gen games just begin to arrived and the 360 is already in his 3rd christmas in 6 months. ( 1st christmas for the PS3 in europe in 6 months ). With 2 christmas more in europe I dont see the 360 as a real success in Europe, and it's already game over in japan.
The 360 without competition was selling worse than the 1st Xbox worldwide and in the USA before Gears of War.

Maybe I'm wrong but I think the 65nm Cell is already possible, blu ray cost are going down, no mass defective PS3 to repair, just 1 model, RSX made by Sony himself, no more EE+GS, cheap HDD from the laptop market, sony is an elctronic giant who knows better than microsoft hardware cost reduction ... There's room for a price drop... more than Microsoft and their Core + Premium + Elite with red ring who must cost so much to microsoft.