While i can't speak for the PS3 against its predecessor, I can say that the 360 should be passing the Xbox 1s lifetime sales most likely this winter, so yes, I'd agree that failing is NOT the right word for what is happening to the 360. PS3 is another story for another time(by another person.)

No, if only because the Arcade is still the gimped model of the 360, and it still takes another Benjamin (at least) to de-gimp it.

I like that quote

I dont think it can truly help, the wii has created a new sub market in the gaming world, that rides along with its traditional gamers, its very interesting, how a device marketed properly, and with a friendly user interface can draw a crowd. now all that has to be done is for 3rd parties to start figuring it out too

Will the 360 sell more consoles at a cheaper price? I'm not sure why the querstion nees to be asked since as price falls demand increases, the 360 will sell more consoles. It's increase will pull mostly from the HD market tha Sony and Microsoft are competing in, it's not likely to have any affect on Wii Sales. Holiday sales begin in October so those looking for a decrease in sales over the next couple of weeks will be dissapointed as all consoles should continue to increase from here to the end of december.