Why is the line up superior? Both have very good games coming out, with many of them multiplatform. 

Bahh, the economy is no worse than it was a month or two ago, save for gas prices. It mainly has to do with the fact that the 40 gig is a god awful deal compared to the 80 gig. 

Sales dropped by a third due to knowledge of the more expensive 80gb's return when people are trying to spend less money and not more?

The Xbox360 lineup has better mass appeal. We must look beyond the falacy that the views expressed herein this forums actually are reflected in the general gaming populace.

Theres something for everyone, they even have what looks like the first biggish MMORPG since WOW coming to the 360. Significance: high, its a fresh market to tap. Certainly its much more important than yet another shooter for either system.

Games that have western appeal and are easy to get into

Fable 2 - Looks very simplified.

Too Human - Same.

Left 4 dead - Valve is famous for ease of use and polish.

Halo Wars - Big name and excellent developers. Ensemble is one of the few developers in the world that I would have faith in really bringing the RTS genre to the console space.

Sacred 2 - Hack and slash is quite an easy genre to pick up and play. Button mash until you get it, and Sacred is a decent quality franchise to boot.

Furthermore, all these games look to have a significant online or offline/online Coop component.

Im not doubting that the PS3 has great games coming, just that the 360 has the games to expand the userbase.

Oh cmon. I just said it's a better deal. As in a better value. Just because it has a higher price doesn't mean that it doesn't have more to offer.  It doesn't make sense that this knowledge would be so widespread as to justify such a slump in games.

As for the lineups, not all of those games may even come out in 2008. Halo Wars has a very vague release date lineup, and Fable 2 doesn't have an announced release data either. And what's this MMORPG? I haven't heard of it. Is it Age of Conan? If so, don't get too excited. What's the history for MMOs on consoles anyways? And releasing sequels is not going to expand your userbase all that much.

Fabe 2  (could be good if the developers are telling the truth)

Too human- hard core - hardcore like okami? Or hardcore like supersmash bros brawl? I pick the latter.

left 4 dead-hard core - valve never releases hardcore games, all their games are mass market - hence why they sell so well.

halo wars( those who liked the halo series have an xbox already, rts sucks on concole) - those who like RTS may not have a console, I listed it because Ensemble make easy to access games. There are more people who know the name "Halo" right now than there are who know the name "Metal gear solid". Not everyone who likes the series has the console. I loved Halo 1 on the Xbox1, but I've never played more than the first 2 levels.

sacred 2- ninja gaiden didnt do shit neither will sacred 2 - Ninja gaiden = hardcore = already got the console because im so hardcore dude. Sacred 2 = Diablo = easy to play, fun, simple yet deep games.

All the games I listed were new for this current generation. Half new, half old IP overall. More importantly these games give the Xbox360 the action RPG crown and target gamers that haven't been targeted yet. This is much more important than releasing a new FPS into the already crowded genre.

I assume you meant a slump in hardware, not games. Thanks, im tired!  In which case I would say that the slump was actually very slight, and that a lot of PS3 owners or prospective owners are people from a more hardcore crowd. So while the majority of Wii or DS owners wouldn't know if a new SKU was coming out or not, plenty of PS3 owners know about the 80 gig, especially those who follow a franchise as hardcore as Metal Gear Solid 4. Why else do you think sales would decrease when such an important game is soon to be released? I agree, the current PS3 crowd is probably the most hardcore as a group of any console. Expensive hardware meets a dedicated userbase.

And really, while the games you listed can boost 360 sales, they'll never truly push them. At this point in its lifecycle, a lot of Xbox owners have upgraded or moved to the Wii (or possibly PS3, but that's very unlikely). The only prospective owners at this point would most likely be casual gamers, who are going to looks for games like DDR (which the 360 has). Microsoft has realized this and that's why they're focusing on reaching larger demographics with the X-Mote and Banjo 3 (of course those attempts will fail, but what are you gonna do?). 

The HD console market is A. Price constrained, B. Genre constrained, C. Sales beget sales - we hear ALL the time "All my friends own the PS3 and I live in the states" or vice versa. It doesn't make sense in a market where the Xbox360 has 2.5times the userbase that all of someones friends 5-10 consoles could all or mostly be PS3s for instance. So the conclusion I make is personal interaction drives console sales beyond the early adopters who rely on the net.

I hope I don't have to argue that the HD console market in the United states is saturating at the current higher price levels, agreed?

Now B. The traditionally quite casual action RPG genre has been pretty neglected so far on the HD consoles. They are key drivers of sales because they are both easy to get into and apeal to the general core gamers. We haven't had any good RPGs like these, its not like another shooter, these are people whose needs are not being met by the current offerings. Xbox1 owners have probably either been lost forever or have upgraded but I was never talking about them.

This is where C connects to B, its personal interaction that drives sales from the hardcore - early adopters to the mainstream. These are recomendations from friends, the desire to play multiplayer with friends, and personal familiarity with the machines. The games that apeal to the core gamer usually have a strong human interaction component. Rockband - Guitar Hero 4 <-- 10million sales and rising - Halo 3 - Super smash bros - Wii Sports - Singstar. Games that have a strong social component and apeal to core gamers. 

These games I pointed out ALL have a Coop/Social element and they ALL are going to be easy to play relative to their respective genres. They will drive sales because its a genre that hasn't been tapped yet so if you're an action/western RPG fan theres a good chance you haven't bought a console yet. Its because of the social element of these games that it will drive the interactions in Xbox360 owners to draw even more people to purchase the console, just like the above example. If your friends own an Xbox360, your chances of buying a PS3 are reduced.