The price is a key factor and it is true, it was being outsold because it was the most expensive but this is now, not then. Taking the Pro 360 as example, for £250 you get the machine and what comes with it, lets say you want wireless internet, you need an adaptor costing a whooping £50, want XBoxLive, this costs £30-40 a year. Want HD DVD with it, that's £70. A nice round £410 for the same deal for what you get £300 with on the PS3. And that's free internet as long as you have it, not yearly payment. Back then it was the better deal, now it's not and the change in Europes sales, including the UKs shows this.

Considering you can get a 360 for £200 (even if it is the Arcade), I don't see a price drop making a significant difference in Mainland Europe. 

I see many people mentioning MGS4 again and again as a big game in Japan. SINCE WHEN?

The PS3 will do better when new reaslses come out the only resoin why it hasnt sold that much

Sony Japans game library isn't too great, and there is no Hello Kitty bundle... That'd do the trick.