Microsoft really did drop the ball with the Xbox One in many different ways and PS4 will benefit from that.

sony made a fantastic console and marketed it properly, its as simple as that.

Does Nintendo really compete with Sony and Microsoft? The Wii U is so underpowered it would not be able to get any new generarion multiplat even if the console actually were successful. People who buy the console do it for Nintendo games.
The problem is how expensive it is, if Nintendo is going to make an underpowered console that will only play Nintendo games and exclusives designed for that console, like Bayonetta 2 or Wonderful 101, then they have to make it much cheaper than the other 2 consoles, because most Wii U owners will end up buying another console for the non nintendo games.

Microsoft and Sony do compare directly. 2 gens ago Sony sold over 150 million units. last gen both sold 80 million. That seems to me like the PS2 userbase just got split in half.  Most of the big sellers are multiplats you can get in both consoles.
My big question is how could Microsoft not know Sony's console would be both more powerful and cheaper than theirs? Some kind of industrial espionage must exist.

A mixture of both. Sony really made some solid gambles with the PS4, especially in regards to the GDDR5.

Nintendo on the other hand really made a big mistake that a lot of companies fall for. They rely on the casual audience, but don't seem to understand that the casual audience is not a viable in the long term. They hop to the next thing, which apparently Flappy Birds, and then it will be something else. Also the pricing model, and marketing confusion didn't help.

Microsoft didn't learn anything from the PS3 $599.99. People buy consoles generally because they can't afford PCs. I know when I was younger I would have been laughed out of the room if I asked for a $600 machine. Microsofts gamble with the always online and what not also really damaged their potential leverage in NA.

At the same time I also feel people underestimate the PS brand. Sony lost a lot of sales on the PS3 due to price. PS1 and PS2 were juggernaughts, and those fans didn't simply disappear.

Clearly not screwing up is an important strategy and it is entirely down to Sony that they did not screw up.

I'm not really sure how Nintendo screwed up. Wii U is a good machine for the price (though maybe not for the launch price), the tablet controller works well, they might have been a bit slow to release games but they have a good library of games only 1 year after launch. Perhaps they didn't need a tablet controller and the Wiimotion plus could have seen Nintendo through 2 generations. But I think mostly Nintendo just didn't understand it's Wii audience and that most of them were never going to buy into the generation anyway.

MS did screw up plain and simple, almost in every possible way except they didn't release a console with a high failure rate.

$350 for something that barely outperforms a 7 year old XBox 360 was never a good idea in any universe. 

MS and Nintendo are simply thanking Sony for giving them 7th gen. A gentlemen move. *tips hat*

If PS4 was the best of crap choice they maybe, but its really good, so No Sony got almost everything right this time.

I'm wagering that you don't own a "U"...do you?

btw, Sepultura > Soulfly

...and yet the most units sold thus far were at launch at what price?

and yes, 299 for the bundles available now with the library available now is a great deal.