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"Will GT 5 negate any Xbox 360 price drop in EU?"

They'll both do exceptionally. Market is big enough for 2 sales spikes.

"Will Gt 5 be Ps3's first blockbuster at launch?"

Yes, yes it will.

"How is a demo selling so well?"

Most people don't even know it's a demo, unfortunately.

"Oh and one more thing! 1 MILLION!!ZOMG"

That's bound to be retailer preorders, but still ZOMG and very good for Sony.