It won't have the same impact unless MS wants to give away the Arcade SKU at $99 (bare console, no Natal) and they drop the price of the 120GB SKU to $199 (no Natal).

More likely scenario: MS includes Natal with the Arcade SKU for $199, 120GB SKU goes to 250GB with Natal for the same $299.

Is the second option a great bundle? Absolutely. Will it have the same impact as the PS3 dropping to $299? No.

Its not all about sales, its about the gaming experience. Sony CLEARLY has more exclusives, rumors and unannounced projects in the works than the competition. On top of being the ONLY console capable of 3D gaming (google: 3D Blu-Ray), the PS3 has so much untapped potential. We can only IMAGINE what the future hold for the Playstation brand. And how about that 10 yr lifespan Sony boasts about? Looks to me that they are on track to keeping that promise.

Prediction: The 360 will begin to fade away in 2011, or MS will announce the next xbox. It has been five years right? lol

Yes, but not as much. Will be harder and considering GT5 will take Europe and Japan...possibly America.

So your saying that Sony only has 1 AAA game for the fall when E3 hasn't happened yet? You are going to be wrong but i will have to wait till E3 to prove it.

Maybe because Halo 3 has sold more than 10 million copies.

Well numbers speak for themselfs. Halo 3 10.8 million sold. Halo ODST 4.7 mil sold and that question could be asked the other way. How do you know theres still Halo fans yet to purchase a Xbox 360.

Anyway times have changed a lot since 2008. In 2008 the argument that the PS3 had no games, it was doomed and it was to expensive was holding the PS3 back. Now the PS3 has loads of games coming out. Its at an affordable price and its not that far behind the xbox 360. It will take more than a few exclusives to hinder PS3 sales now don't ya think

Sales = money which in the REAL world is everything.  Quality means shit if no one buys it.

I see them on the same level once they release their respective motion detection techs, as from what we have seen up until now, including demos and PR, Sony has a less inovative solution, but precise and suitable for a lot of games genres and styles, while MS' Natal is more innovative, but while it's perfect for some things (dance and gym, for example), it's terribly lame for others (the driving demo was appalling). So a jack of all trades (that actually could be also a master of sword games) against a master of some more things. I smell parity, with MS dominating a few genres and Sony gathering rougly the same, but spread amongst more genres and dominating fewer of them.
Neither will be able to grab Nintendo's sceptre and throne, but Sony could grab the swords (and part of other hand instruments and weapons based games) and MS seriously hit Balance Board and dance and fitness games. Nintendo can partially counter Sony's attack including WiiMotion+ with every Wii and WiiMote, but it can't do anything about dance games, Natal will rule them (if it's well implemented enough, obviously), while fitness games could still be ruled by Wii BB overall, but with Natal grabbing a good share of some of them. All this HW wise, obviously, we don't know enough about games, yet.

@ STAGE

I totally love how you ignore MM's point. Crackdown beta came with Halo 3, now, that is pretty big considering Halo is MS's biggest franchise. All you are saying is pure speculation. Resistance and even Resistance 2 sold more than Crackdown.

LOL I love how

Crackdown = AAA big hitter.

Yet Resistance 2 sold more = not heavy hitter.