I think most ppl are forgetting Microsoft has the upper hand in this current stage. Not only are there more consoles out for X360 right now, but Microsoft has more money. And to add to that fact, Microsoft is a US-based company that records everything in dollars.
This is key, as the most recent price cut in Europe was the result of a weak dollar. More than likely Microsoft figured they can make up for the money lost on margin to be made through volume. Prior to GTA IV, I think Microsoft can cut the price of XBox 360 down to a point where they break-even, at least in Europe.
Sony does not have any currency advantage and rather the Japanese Yen handicaps the company. With the dollar's continuous decline, Sony might never see a profitable Playstation 3 console sold in America. They can only keep the boat from sinking for so long.
I am not saying in anyway or form that Sony's PS3 will fail or that XBox 360 is poised for incredible success. What I am trying to show here is, more than likely, XBox 360 will retain its lead through the rest of the lifecycle with Sony playing 3rd place. Microsoft will continue to retain cost advantage unless the dollar somehow rebounds extremely strongly.







