The irony of these threads is that they ignore something truly fundamental. Competition doesn't take place in any kind of vacuum. Microsoft would have responded to that type of strategy, and Nintendo would have probably made different choices. The reason Microsoft is ahead of Sony right now is that they are more responsive to the market. It boils down to better decision making.
Sony won two previous generations, because they understood the market in a way that Nintendo did not. Despite what some people say. Sony produced two consoles that were superior to their rival, but that superiority was very specific. They were the kind of advantages that carry the day. In their first console they made disc formats work for gaming, and it is to their credit that they made it work. Others had tried and failed. It created a huge financial incentive for third party studios. Who could produce their products with a fraction of the overhead they suffered under Nintendo. It meant they could make more money, and take fewer risks. So they flocked to Sony's console, and where the games go the gamer isn't far behind.
In Sony's second generation once Nintendo had caught up with them in the format philosophy. Sony simply upped their game by turning their next console into a dual purpose device. Nintendo could only play games, but Sony could play both games and movies. Once again Sony found one particular technical advantage to exploit. Which let them win that generation handily.
By the time Sony got to its third generation. It had a strategy that worked, and that strategy came from their corporate mindset. They would just fashion a new technical hardware advantage, and guess what this is exactly what you got in the PS3. They tossed in a new high definition movie technology, incorporated the internet, and tossed it on top of a decent game console. The difference being that they didn't understand the market in the same way that Microsoft and Nintendo now did. They themselves didn't understand the market.
Everyone acts as if Sony had some kind of magical aura that turned everything it touched into gold. They just looked at the market, and tossed in a piece of hardware that gave them a real edge. That the competition couldn't match by just playing the game head to head, and this generation neither Nintendo or Microsoft obliged. We all know what Nintendo did, but Microsoft already had a fundamental edge.
The current market isn't about hardware as perverse as that may sound. Just incorporating some new core component isn't going to win over consumers. We are in the age of services, and that is something Microsoft understands, and would understand no matter what kind of hardware Sony came out with. Sony's methodology just doesn't work quite as well as Microsoft's methodology works in the current climate.
The supreme irony is that Microsoft would have won regardless. It is just a matter of the amount of effort that they may have had to put out. If Sony gave them a tougher fight up front. Microsoft would have just probably poured more of its resources into becoming a media hub a year or two sooner. As it played out Microsoft was able to coast for most of the generation maximizing its profits. Had that not been a option Microsoft might have over compensated. Making things that much worse for Sony.
In the end it doesn't matter how it happened. What matters is that it would have happened anyway. Sony didn't really understand the market better then their rivals, and that is all that would have mattered in the end. I don't see any way that Sony would have actually won this generation. That would have required a whole change in its mindset. Which is the companies problem on all fronts. It is like saying that tomorrow Microsoft will get into making candy bars, because they know that there is no immediate future in software.