I can only agree with you. My arguments purely apply to North America and the UK. Everywhere else (bar Japan), Sony is back. I do see it.
I realize this is not a race for the swift, and MS also know that. That's why they inject big dollars in their marketing and it pays off. The Americas are a big portion of the market, so it's a very important one to factor in when discussing titanic failures. UK is big too all things considered.
I think Sony will steamroll them with price and exclusives and Sony will match MS for every price cut before the end like they did with the PS2. No matter what MS did they were always behind Sony. Microsoft will be buying up a lot of third party real estate this gen to measure up. Their Blacktusk shooter might work on the Americans though. Sony will hit gamers with a barrage of games like they always do. I've noticed with Sonys mentality its not about having an amazing hit which MS does, its about offering great content across the board and profiting off of all of them, ensuring sequels.