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I really think they need to try and replicate the Wii. Cheap console that offers something unique that would sell to a wider audience. It's very difficult for them to fight for the PS/XBOX market at this point. They'd have to change their image completely. They'd have to make a high spec'd console that will sell for little profit. They'll have to ensure that their console is accepted by 3rd parties in terms of online capabilities. Basically they'll have to do so much for a chance of gaining something little.

A cheap console that sells for a profit from the get go and maybe a unique gimmick that attracts a wider audience is their best bet. Worst case scenario is a console that sells badly but is still profitable.