My prediction is that from Q3 until the end of this year the total sales for the Xbox360 worldwide will exceed the PS3.

Here are my reasons for this prediction:

1. The Xbox360 games library to be released this year is both of high quality and it is diverse in genres and scope. The Xbox360 will be stronger in the RPG, Action, Shooter and Strategy genres. It will make a compelling choice for any gamer especially those that like the Action or RPG genres as they have not been catered to well so far. The games being offered encompass a wider market share and some do not have competing offerings in the competitions lineup so far. Standout games like Fable 2 or Too human are perfect examples of this.

The lineups seen pretty even to me.  Also, wait for the games to come out before bragging about how great they are.  (see Haze)

The quality is good enough to hold its own. My point is that they target a different market segment finally. Since sales have slowed slightly, it makes me wonder if they target RPGs to new people who haven't yet considered a console they could recieve a nice boost.

2. There have been many rumors floating about with regards to things such as:

A: Wireless support.

B: Increased HDD size.

C: Blu Ray.

All 3 will increase, not decrease console cost.  MS need to drop their price.

3. The Xmote. Since it has practically been confirmed that it is real I think this adds to my case. The Xmote serves as friendly remote for media centre use and as a game peripheral. As a game peripheral, it will be supported. There are too many games where it would be a "No-brainer" to include support for it. Strategy games, Flight Simulation games - Scifi in space or contemporary, practically any PC port you want to throw at it would count also. It makes sense to include it in games like GOW2 and once that happens, support will be universally included in the Unreal Engine.

Most games that support motion control will not have the 3mote be mandatory. They will be designed for the standard controller, and just have motion controls tacked on after completion.  I can almost guarantee that Gears2 will not have motion controls.  Even if it does, no one will use them.  Gears2 will be designed to work perfectly with the standard controller,  the Xmote will not be a better control option.

Gears would be a perfect fit for motion controls. Being able to aim with an Xmote will be invaluable for that game. Also Epic will want to cover all possibilities so they will likely add it to their engine.  

Since the Wiimote works so well, theres no reason to suspect that motion controls won't work well on the Xbox360. I would go as far as to say that it would work better, because the Xbox360 isn't as limited in scope by the performance of the machine than the Wii. They also have the benifit of hindsight.

Learning from the Wiimote, sure, that makes sense.  Better graphic meaning better motion controls? Not sure why they would.

Im talking better game engine, different types of games - Simulation, Shooters, Strategy games - These aren't nearly as easy on the Wii.

The Xmote works on three levels. It makes a straight cross shop between the Wii and the Xbox360 Arcade possible as they would use the same controls. It expands the control options for existing and future games, and makes ports between the Wii and Xbox360 more realistic. Lastly, it provides a point of difference between the Xbox360 and the PS3. An edge when they essentially compete for the exact same market.

Here come the waggle Minigame/PS2 ports!  Seriously, how many non-nintendo motion control games from the Wii would you like to see come the 360?  Maybe 3: BoomBlox, Z&W, NMH.

If I believe the Wii guys, there are a ton of good quality third party games coming out.

4. Heres how I believe they are going to change their pricing and specifications.

Arcade: Add Xmote and wireless, keep the price

You are adding $240 in retail components: (1) wireless adapter - $100 retail (2) 20GB HD - $90 retail (3) Xmote  - ~50 retail, and dropping the price by $30 as well??  After MS dropped the price only $20 in their first 30 months?  Good luck with that.

We're ripped off as consumers. $10 tops for both upgrades together on the wholesale market. I didn't believe that they would drop the price but Im more certain now. $280 Wireless and maybe a HDD I don't know, 50/50.

The costs will go down a lot, Microsoft has to budget a certain percentage of the sale price for warranty repairs and the cost of the chips and large heatsink must be quite high. They could easily add wireless and still come out with a cheaper system.

This is their Wii competitor, and value option for people who just want to play games and aren't likely to go online. The price depends on how much an Xmote costs them to bundle, and whether or not they decide to add a HDD. They may keep the price higher and use the Xmote as a way of differentiating the Pro and Arcade SKUs.

Nintendo has the casual gamers wrapped up for this generation.  MS should just focus on what they do well.  (Online, hardcore)

If they focused on just the hardcore they will lose. They need to target as many people as possible.

Pro: Increase HDD size to 60gb, Add wireless and drop the price to $300

So, for $50 more than your arcade version, you would get 40GB more and no Xmote.  Not a good deal. 

Choice... The point is that they perform different functions in the lineup. With the Xmote, the arcade actually has a reason to exist.

This is the bread and butter machine. The specsheet tweaks are needed because this is meant to be a workhorse media centre/gaming platform. It can't do that without access to media, nor a place to store it. The increase to 60gb is also psychological, I used to work it computer retail and the unwashed masses are still more impressed by bigger numbers. A slightly cheaper price and an increase in specifications should push this system to even greater sales numbers. The extra profit from Live activity should more than offset the costs involved to increase the specifications. This needs to be a solid system, it seems a little weak when compared to the PS3 offerings currently. A lower price should help bring more people into the market who could otherwise not or would not buy the machine at $350.

Elite: Add wireless, Blu Ray, keep the price at $450.

This is the Halo machine, not literally. It gives Microsoft a direct competitor for consumers who want Blu Ray and it gives people the impression that the Xbox360 is an equal machine in Pro/Arcade configuration to the PS3. The difference being Blu Ray. The problem of just having a lower price is that it makes the product seem less valuable, one of the lessons Nintendo seems to have learnt also.

MS should avoid Blu-ray.  Let Sony be distracted by pushing their HD movie standard.

ok.

5. RROD eliminated. There has been a cloud hanging over the Xbox360 brand ever since the problems started being reported. With the Jasper/Falcon updates I am confident that the machines manufactured now are reliable. When word filters down about this, and console owners are definately media/internet savvy the word will slowly spread and those people who had been put off with nagging doubts can finally put them to rest.

Done.

MS needs a console redesign (slim version), and needs to publicly state that the RROD is a thing of the past.  Internet rumors that your console is more reliable will not sway consumers. 

The slim version will likely come next year. Since we're three years into the lifecycle of the console it makes sense to tweak the designs a bit now so they can be ironed out before the console is shrunk down.