Wow. Rebranding won't make that much of a difference you know. It was the lower price and physically new model that really spurred on PS3 sales, not new boxarts and different styles of commercials. Also, rebranding obviously won't distance the 360 from the RROD as the Xbox 360 still gets the RROD...
Anyway, as I'm told by many 360 fans Natal is made of awesome tech, and so the R&D and production costs must be pretty high. Therefore I either see it failing but making profit, or being very successful and increasing 360 sales at a financial loss.
If MS go aggressively with Natal, and all goes well for them in terms of sales, people are forgetting that Sony could just knock $50 of the PS3 price there and then, and bring other global prices in line with those in the US. With many Sony products now profiting along with the PS3, with the huge games they have coming (software sales, GT5 especially), with production costs falling and with Sony choosing Market Share over profitability (compare the effect a $50 cut would have compared with the losses already made - minimal) this is definitely realistic.
Consumers win in the end, but Microsoft don't have the ability to streak clear of Sony in this time period and vice versa. The deciding factor will be when the PS3 has another big drop in price. The 360 has no/little price cuts left. It will soon be seen as 'cheap.' Bad image to have.
@ Zen - Microsoft is not bigger than Sony, let alone miles bigger. Has a bigger wallet, but in every other way Sony is bigger. So really, it's hard to say.








