None of the above. For my own sake I would like to see a PS4 in the next generation of consoles (though I guess in an absolute sense it doesn't matter because if Sony disappear from the HW market I'll go with whatever console grabs the Sony exclusive IP I like the most, unless it's an overpriced Apple console, in which case I'll go play with Zelda).
So my concern is overall console viability, which is both a mixture of market share and profitability. At this point in the game it's about maintaining sales momentum to increase market share (i.e. outselling 360 WoW on average, and being not too far behind Wii), as well as seeking profitability in the 2nd half of the generation.
We all know PS3 is going to be an unprofitable console for Sony. So it's all about market positioning and loss reduction at this point. If Sony focusses too much on one side at the expense of the other then the end result will be a less viable console leading into the next generation.
In the end we're talking about whether or not Sony should drop the price of PS3 this year, and if so by how much. A market share purist would say drop it by $100 again and watch those consoles fly out the door (but they better re-tool those PS2 factory lines for PS3 and stop making PS2s). A profitibility purist would say keep the price as it is and enjoy a period of good proximate profits to help offset the historical losses a bit. I think Sony's best course of action is a happy medium between the 2 extremes.
“The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt.” - Bertrand Russell
"When the power of love overcomes the love of power, the world will know peace."
Jimi Hendrix