360 had lots of great games this year that could be attributed to its sales.

Ps3 is going to bitchslap 360 this year. 360 won 2007 because it had very big games, Bioshock, Mass Effect, Halo 3 and the better versions of 3rd party games because developers had not learned PS3 hardware. This year PS3 big games will come out and I hope the developers can give identical versions of 3rd party games.

PS3. This is because devs now know how to use the PS3 properly, so hopefully there will be less delays. Of course there is MGS 4 and quite a few other great exclusives coming. I think the 360 will win NA for this year, but will get a thrashing in Europe and Japan. Their LTD sales will be similarish, but the 360 will still have a 2-3 m lead

I think they will be fairly close. I believe that FFXIII and GT5 will not make it into the year, and MGS4 wont move the amount of consoles like some people think. Microsoft has more room to cut prices, and will hopefully do so drastically. Additionally, this large price cut will probably come prior to the ultimate casual game....GTAIV.

PS3!

It's quite easy, actually:

1. They sold 19.5 million in 14 months, that's true.  However, only the last few months had a production level of 1.8 million.  They began at 1 million a month--just over HALF of what they are doing now, and had several increases throughout the year.

2. You are flat-out wrong when you say that they've said they won't increase production.  They said they will wait until the end of their fiscal year (end of March) and assess whether they need to increase production at that time, and they almost certainly will do it.

3. Wii Fit, Brawl, and Mario Kart are coming out this year.  According to a figure someone posted on this site recently, the US spends more on fitness in one year than the entire world does on video games, so Wii Fit will annihilate everyone if advertised properly.  Smash Bros. was the only reason a lot of people picked up a GameCube.  And everyone loves Mario Kart

4. There are a LOT of other games coming out this year (see my list in the "2008--Year of the PS3 or 360?" thread)

5. If demand were to drop, they are in an EXTREMELY comfortable position to drop the price.  Even a $20 drop+big new game would spur the demand back up.

Considering the facts :
- Some BIG third party multi support games to be released on 360/pS3 will look identical on ps3 and 360 (ex : DMC4, Burnout Paradise) => negates 2007 advantage of 360 having the best version of games.
- Some really BIG exclusives games are gonna show up on the ps3 : MGS4, LittleBigPlanet, Killzone2, White Knight Chronicle and they could all wipe the floor in their respective genres.
- 360 is virtually dead in Japan, and after Lost Odyssey, it will be one of (if not THE) the last big exclusive targeted at japanse gamers.
- 360 is struggling in Europe. Decent show but struggling.
- ps3 is weak in America but slowly gains some ground.
- 360 still has a huge advantage on price and ps3 will plateau soon without another price drop.
- Blu-ray vs DVD has reached a stalemate until something big happens (Blu-rau drives under $200 or Warner going exclusive one way or the other).

I make the following hypothesis (just add the - or + to see the oucome: a - means 360 outsold by ps3, a +means the opposite. It correspond to 25k units weekly.
* Warner goes HDDVD Exclusive : ++
* Warner stays neutral : -
* Warner goes blu-ray exclusive : ---
* 360 / ps3 average prices accross 2008 : $299/$399 : -
* 360 / ps3 average prices accross 2008 : $199/$349 : +++
* 360 / ps3 average prices accross 2008 : $199/$299 : +
* 360 / ps3 average prices accross 2008 : $199/$249 : ---
* MGS4 scores less than 90% on metacritic (flawed gem): +
* MGS4 scores more than 95% on metacritic (flgship game) : -
* PSN matches Live as for features : -
* Live goes for free : +

You see, for me it depends not much on games quality (the playing field is average considering the mass of third party multiplat games.
It depends much more on price strategy and the outcome of the HD format war.

Actually it will be the wii in first but PS3 in second i think.

I would've made a long explaination to why, I chose what I chose, but Im gonna make it short and sweet:

Ps3.

The OP specifically talks about the HD counter part only. Wii will do great ;).