Yes, MS is in a bit of trouble. While it's true that they are selling better than the XBox at this point it's still left to be seen what the system will do when it's creeping up on the time-frame where its predecessor died. Also, based on the growth of the video game market over the years it really seems like MS is just keeping up their previous position rather than gaining on it.

While overall this makes it look really bad for Sony (and it has been, until recently), which is what MS really wants, it's still looking pretty bad for MS that Sony is pulling out of their slmp while MS probably won't do much better this year than last even with $100 off the Premium in time for GTA.

^i think if they cut the price by 100$ when GTA4 launches then i think it can pass its sales that it did last year

Look at this chart:

http://vgchartz.com/hwlaunch.php?cons1=X360&reg1=All&cons2=XB&reg2=All&cons3=X360&reg3=All&weeks=156

See any trends there that might make Microsoft happy, doubly so considering that their currect price point is about twice that of its predecessor at this point in its life?

I'm not saying that MS is doing backflips over the 360's performance but few expected the Wii to take off like it has, either. Its demographic is still too small but MS has been pumping out some non-traditional Xbox titles over the past year and they seem to be trying to continue that for the forseeable future (Banjo being a good example). That will help and considering that Sony has been struggling up to this point, MS can't be that unhappy right now and I expect this quarter to be pretty profitable for them.

May I also point out that the original XBox was dropped to under $200 just a few months after launch? That makes the 360s sales that much more remarkable in my eyes.

 Its not a head start. The PS3 has the hardware in it to compete with the next M$ console. The new console will have what different? A BD drive for sure, a HDD standard and probably more mem, slightly faster GPU/CPU. By then the PS3 will be in full swing with the devs having a firm grasp on it, making game development easy. So while M$ needs to beef up there 360,the PS3 is just fine. Sony will undoubtedly do the same thing they did with the PS3 for the PS4. It will still have a BD drive, more mem all of which XDR, 2 CELLS, a newer GPU and a slightly larger HDD. This is the purpose of the CELL, and why it was designed. They are easily "stacked" and work extremly well together. This will make development very easy for the PS4 since the architecture will be pretty much the same.......just with a lot more headroom.

Are you serious?

Have you heard of moores law?

If moores law applied to the xbox360, and it lauched in 2010, then we should expect something which is 4X more powerful than the 360 is today, in which the PS3 cannot compete with this Raw "power".

Or one could bring up the fact that the PS3 is running what is basically an off-the-shelf Nvidia GPU from 2005, but to fanboys like that guy, it would be like talking to a wall.

He's basically talking about "future-proofing" something, which is beyond ridiculous to someone who has paid attention to the tech industry for more than 15 minutes at a time.

After all, it's not as if PC tech isn't already crushing console tech... Oh wait, yeah it is. It's called Crysis. And it came out in 2007. Imagine what will be available to MS in 2009 for a 2010 launch, or even 2010 for a 2011 launch (hardware is finalized nearly a year in advance for consoles).

Besides, the guy uses the term "M$"... One of the most cliched fanboy giveaways you can find on this intraweb of ours. 

I dont think, the 360 is in that much trouble. I don't see Sony catching its user base this year, therefore; Microsoft has a lot of room to manoeuvre, b4 doing anything too drastic. The thing is Microsoft has held alot of their cards for 2008 to their chests, just because we don't know about all the software coming out doesn't mean there won't be any compelling software. The truth is they way games sell on thier conole, it would be foolish for a 3rd party dev not to create a game for them.

To insist that the 360 is in trouble is just ignoring the facts. Microsoft has already made Xbox a household name, sales of 60000 less than the PS3 means very little for weeks on end. You'd be blind to think that their market research will just sit and watch as Sony takes that lead. I see 360 sitting pretty as Microsoft really knows how to move the crowd, expect a price drop, and some big announcements during this years NFL season.

360 is selling less in the Other's market, but what people fail to see is that they have gained tremendous ground in that market also.

 Like I said, that increase doesn't mean much. 3.5 million consoles isn't a big deal no matter how you slice it, whether the 360 is more expensive or not.

The fact remains that the 360 will end up at best a distant second(a distant fourth if you count handhelds), as did its predecessor, and what makes this even worse is that the 360 had a year headstart. The only console that it has a chance of outselling this gen is the poorly-performing PS3, so even if it were to accomplish this, it wouldn't be a testament to the 360 doing well as much as it would be a testament to the PS3 doing poorly.

A real example of expansion would be the Sega Genesis over the Master System, or the way the DS and PSP have expanded the handheld market(especially in Japan) with nearly 100 million sold between the two of them in three years.

The 360, on the other hand, will be in the same position as it was last generation(best-case scenario), may as well not even exist outside of N. America, and has only made money for developers while failing to make any for MS.