I just wanted to mention something about BRAND.
I've worked in retail for seven years (3 1/2 in digital media), and the BEST known brand name is not, in fact, Sony Playstation, but NINTENDO. There is a certain part of the populace, say 27 and over, (from 1980) that either grew up playing Nintendo, or their children did. It is the GRANDFATHER of video game brands. Comparitively, Sony is an upstart brand that cannot compete with the nostalgia factor for many (but not all) older gamers. Sony is really strong with the youngest of gamers, those who never knew another brand, but, generally, they're not the ones who can afford to shell out $600 for a game system.
Overall, Nintendo is the company that BEST capitalizes on Brand name. The sales domination of the underpowerd AND underdeveloped AND overpriced Wii (for what you get, honestly, it is overpriced) is a very strong collaborator of that arguement. Sony is second on Brand, but I don't see it as a huge strength, certainly Sony has a better Brand than MS, but how many $600 systems is that Brand going to move, really? MS easily has the weakest Brand, if they exited the console universe tomorrow, only Halo fans would weep (obviously, 360 owners would be furious, but not saddened, like the loss of a good friend, or a cute lil' puppy).
So yes, Sony does have a better brand than MS. However, they have not positioned themselves to exploit that. As many posters have said, they've done the opposite: high price and almost no games. IF the field were entirely level - that is if the PS3 and the 360 had nearly identical prices and launch dates (specs, as we've seen don't matter nearly as much) PS3 would have blown 360 out of the water by virtue of their Brand and momentum. But Sony priced and dated themselves out of that fight; so what happens now? A floundering PS3, and rampant speculation.
P.S. Price drops and more games cannot now, after the fact, level the field for Sony, as MS can match them tit-for-tat.
P.P.S. How would a worldwide $300 360 (premium) sell? What if they were super-aggressive and dropped the premium to $250 in Japan? (A bargain basement 360 for Japan will either open up the market a little, for MS's good, or continue to not sell, in which case, MS won't lose much money, because they won't be taking losses on very many consoles)
