You mean a price drop can't come out soon enough, right? Cuz that's what's gonna shift the balance again. Right now, it's about value, and the PS3 rocks the 360 in that department with having a lot more features for your money. However, once the Elite models w/HDD installed are cheaper, that shit's gonna get bad for Sony again. I'm guessing they'll announce it during E3 this year.
A price cut to elite model will not do a big difference because you can already purchase an Xbox at 199$ even 149$ when promotion. Also, Sony will also be able to cut down to 249$, which will probably result in bigger sales increase than a 199$ elite. Even if a pricecut for Xbox would represent more than I think of, they will never be able to compensate the 40K difference it is selling in Japan. Im sure that their only chance to get back on top of Sony is Natal. Price cut will not do it, exclusives will not do it except Natal exclusives which may do it.
On another note, their is probably already more functional PS3 in others. Its a secret to no one that the first batch of Xbox are almost all dead. So if we are to lower PS3 numbers by 1 M we can also remove the same to the Xbox numbers anyway.