I'm not sure if I buy any kind of collapse of 360 at this point. If it was going to die it would have last summer when Microsoft admitted the RRoD issue. The hardware is becoming more and more reliable now, with the new GPU this fall the problem should be gone going forward.
As for studios I call BS. One could argue that owned studios have little reason to come up with innovative ideas since their financing is secure. Third party contracted studios to create first party games like Bungie and Remedy have way more incentive to be creative and innovative.
Also, I think that the blu-ray win is huge for PS3 but we aren't seeing too much of a win because of it. 360 is not outselling PS3, but we are seeing 360 sales continue to grow, and the user base continues to buy games at the highest attach rate which is the most important thing of all.
As long as 3rd party support stays, Microsoft keeps on bringing out new games at the same rate as Sony with great quality, and the 360 users continue to buy games, the 360 is not "sinking" at all.
There is no reason that all 3 players in this generation cannot be sucessful. All are proving that to be true.
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