The 360's sales are indeed increasing year-over-year, but the PS3's sales figures are increasing faster. The 360 price drop seems to be producing the usual pattern that the HD consoles have had surrounding price drops and big releases (a two-week boost followed by a crash and burn), so it is unlikely that the price drop can be counted on to produce a significant permanent sales boost.

Fortunately, the 360's inability to produce lasting sales boosts seems to hold just as true for the PS3. But if that continues, then the race will go to whoever is selling faster without the boosts, and right now that's the PS3. It will take time, since a price cut won't permanently increase either console's rate of sales, but given long enough it looks inevitable unless something VERY impressive happens.

How can the Xbox 360 have both increasing sales "year over year" and yet be "unable to produce lasting sales boosts"

I can't tell which paragraph won the argument, maybe if the person who wrote the 1st paragraph were to answer the 2nd then it would make sense.  

But it just as far behind the 360 as it was when it lanuched....So its not really gaining any ground yet. Also the way sales have been lately(yes i know there has been a price cut) then i c no reason why the 360 cant futher the lead this holiday season.

Millennium - Why is it that the X360 price drop produces a 2 week period followed by a crash and burn (from your statement), and the PS3 price drop wound up helping sales for a year?

I think it's comments and ideas like that, that are so counter to what the reality of X360 sales are.

The EU price drop in February helped the X360, not for 2 weeks, but gave it a 100% YOY increase vs. last year, and made massive strides in sales - Even when the PS3 was still had a high price.

Likewise, the US price drop last year led to renewed and increased sales: Last Christmas was the best Nov-Dec period that Microsoft had ever had in the USA from either the Xbox or X360.

The solid, hard truth is that no matter what the fanboys want to say is that price drops do help create growth, retain sales, and lead to new territories. The Playstation 3 did it last year, the X360 is doing it this year. Everyone can argue that price drops don't help, but when the X360 beat the PS3 in September in Japan, it just cemented the fact that they work, even in regions where sales are irrelevant.

And as the OP stated, the X360 is head & shoulders above last year's numbers: 1.3 million more units were sold this year vs. last year - That's despite the fact that '07 had the huge Halo ramp-up in sales (400-500k h/w sold in 1 week), and the price drop happened a bit sooner. That's pretty good progress.

probably because of the huge price difference yet ps3 stays quite close to 360.

Well, of course the PS3's sales increased faster - it had such an incredibly dismal first 8 months, there was nowhere to go but up.  The 360 never sold nearly as badly as that.

True that

xbox360 is selling well

but it is just selling too low when u consider the game line-up or the entry price

(I m waiting for NA sales)

It's because it doesn't have the broad appeal of the Wii nor the brand name of Playstation.

Then, in your opinion, what should the X360 sell?

IMO, I think the issue is that Microsoft and Sony have learned the hard truth that entry pricing points can't be above $300 for the standard unit.