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As an ex-industry insider, I can only say that Sony NEVER planned stuff on short term. They looked ahead to this console generation and the next.

While MS was bussy getting its shoddy 360 out of the door, and paying through the nose for exclusives (HALO, PGR, Fable, all the Rare stuff...), Sony was doing what it always does. Looking into technology to secure them the leadership position.

And they have done just that.
With blu-ray and Cell, their PS3 has a longer life cycle and there's more room for improvement in games (from a technical point of view). But on top of that, they partly OWN blu-ray, so with it being the new format for the next 5 to 7 years, Microsoft wil HAVE to use it in their next console. Which means:

Every Xbox 720 (or whatever it'll be called) sold will mean royalties for Sony
Every Xbox 720 game sold will mean royalties for Sony
Every blu-ray movie an Xbox 720 user buys will be royalties for Sony.
And then I'm not even talking about convincing the consumer that your new hardware is trustworthy, and you'll beat Sony and Nintendo in round 3.

So they can use all that money turning up the heat on MS, by buying even more studios, and advertising even more.

Xbox came in second.
Xbox 360 will come in third
Xbox 720 has little chance for survival

Sony has won that war. And believe me, the Sony corporate guys knew it, the minute Toshiba backed out of the HD-DVD business.

The real battle is Sony vs Nintendo, and that's a scene where they both can do what they do best. Sony wowing us with technology, Nintendo wowing us with sheer fun and gameplay.