Regarding the "losing money to gain market share doesn't work" argument, allow me to disagree.
Gaining market share and making a brand name is very important, and Sony knows it. In fact, the Playstation brand name is so strong that it took many mistakes to screw it up, which Sony did.
For example, do you think the PS3 would have sold ~800k consoles during the European launch if it wasn't for their brand name? Imagine an unknown company trying to sell a $600 console with virtually no worthwhile games, and think about how many they would sell.
The conclusion is that Sony did a fantastic job at building up the Playstation brand name, and now screwed it up, not due to lack of money or brand name but mainly due to mistakes in planning, development, marketing and PR.
Even if MS burns a lot of money into building their Xbox brand name, they won't necessarily fail. If they're smart about it, they can make a lot of money, starting this generation.
My Mario Kart Wii friend code: 2707-1866-0957
