I don't see what is really wrong with 360 sales... Sony was only 60,000 consoles ahead worldwide. At that rate it will take over two years to catch up. And that is after Sony slashed price, had a massive marketing blitz (It was almost impossible not to see a PS3 commercial before and during Christmas), won/are about to win the HD war, and introduced another product that was yet another $100 cheaper... So, really they had a $200 price drop because most sales are probably 40 Gb versions.

Microsoft hasn't really done much since Halo 3 release. They had a $50 price drop last August and hyped Halo 3 through the roof but after September they have been very quiet.

Now, 2008 is here. And Microsoft has yet to speak about their game offerings, price drops, or anything else yet. Not because they don't have them. Fable 2, Too Human, Halo Wars, Alan Wake, and some Rare title(s) are all but guaranteed for this year. Microsoft hasn't even really showed anyone these games yet, so it is relatively unknown what kind of features they have whereas KZ2 and MGS4 have been shown a lot and everyone knows what they will offer in detail. Also, it is well known that Microsoft has brought down the cost of 360 manufacturing drastically and will get more when they reduce the size of the video processor in summer.

So, what's the big problem? They have lots of room to cut price and they have new and existing IP coming out that should appeal to potential consumers. Really, the biggest problem is in getting over their hardware reliability issues. If you look at worldwide sales, 360 is starting this year off better then last. Last year to start January they only had 144,033 consoles sold WW in the first week. This year they had 206,098... What is wrong with an over 30% increase? The year is still young and to write any of the console companies off is really uninformed.

Until we see how PS3 sales stabilize in Europe and Japan, and what's the impact of GTA4 and a 360 price cut, I see no problem for the 360 in terms of maintaining or increasing its gap with the PS3.

The thing is that in the previous generation Xbox didn't have most of these kind of games, while PS2 had everything. Now 360 has aquired a few of the most important, previously PS-exclusives games it will become harder and harder for Sony to convince costumers that the PS3 is a better buy than 360. Especially since the 360 is cheaper and has better online.

Sony's big 3 are absolutely big games, and probably will be of an extremely high quality, but more so: if they fail it's more or less over for Sony. Not in the way that they'll quit the PS3, but then they'll probably never catch up to the 360. These 3 games have to convince the costumer taht they're better than 360's big 3: Gears, Halo3 and Bioshock.

The big majority of PS2 owners hasn't switched and I think its totally undecided which console will benefit most, next to Wii, of these. 

honestly i think the 360 has been doing spectacular,that said,i think the 360 will see a pretty big drop in sales compared to 2007,in 2007 they had so many games to look forward to,halo 3,Bioshock,Mass Effect ect. Since the 360 has so many of its flagship titles out...there 2008 lineup is really lacking,therefore i predict it will affect the 360 sales,maybe not drastically....but i doubt the 360 will sell as well this year.

No, the Xbox 360 is never in trouble. Just what like the previous posts have said, MS has a lot of room for price cuts, specially since they have reduced the Xbox 360 production cost and they haven't have one since August. As for games, yeah definitely MS is holding back a lot of game announcements. Specially because they had a wonderful software sales last year compared to the PS3. That alone is proof enough that the Xbox brand is still a strong force to reckon with for the PlayStation brand.

But enough have been said regarding that, it's a fact that MS still holds the right cards,  it's just up to them to play the right cards just like what they have done last year specially now that the PS3 has the "big three" ready and price cuts in line for a big assault.

@BLOODLINEZ

Wow, something's wrong with your rig man, mine runs faster after the update, achievements now show up almost instantly after I click and it connects to Live a lot faster.

And I have to disagree with you, yes, big hitters have been released for the console and they did what they were expected to do, boost sales and prove that the Xbox 360 is a strong software mover. It gave Xbox 360 an incentive specially for this year to get more games on development for the system.

well those games will still help it sell this year though very little,and i think microsoft has a good line-up this year too especially if they release banjo-threeie which should sell console and microsoft could give a big price drop this year which should help alot too,so i think 200 can match 2007 with sales

For those of you that are talking down Microsoft's lack of expansion over the Xbox demographic, I have two points:

- The 360 is tracking ~3.5m over the Xbox at this point in its life, and that gap is only widening
- The 360 is approximately $200 more expensive than the Xbox was at this point in its life (Pro 360 vs. Xbox 2003)

If you can refute that MS is not gaining market with those numbers, feel free to try. I'm dying to hear your reasoning.

 Exactly. The 360 is not making money. It is still losing money on every console sold. They cant afford to do another price drop yet. Once they stop repairing 30+ % of there consoles, they will be able to start thinking about a price drop. The Falcon MB may help this, but there ELITE 360s are still breaking as well. The PS3 is closer to turning a profit even with the BD drive inside. That BD diode is not that expensive any longer. Sony is making a ton of money on every BD player they sell, as are all the other companies. That I think is another reason more companies are backing the BD format. The players cost a lot more for the consumer due to markup, not due to cost of parts. Samsung has a 299 BD player out that is still marked up for retail.  So the PS3 just needs to complete there die shrink on the CELL and RSX and should start turning a profit. Thats why they are stating profitability in 08. The 360 on the other hand has had to add heatsinks. There die shrink has helped, but not eliminated the problems. They are still shelling out a ton of money on repairs.