ps3 outsold the 360 for the whole year til they price cut, and in europe TWICE.

 And with SCE and Sony's current situation when do you think we'll ever see a price cut for the PS3 again?

Sony's in trouble.

1: They're selling an inferior product. Worse than the Wii, worse than the 360. Not in technical specs but in cost to build. They got handicapped by their own attempts to maximize their specs, and their costs got out of hand.
2: From what I can tell they're run by a group of angry monkeys in suits. Even the most hardcore Sony fan has to admit that the Sony execs have basically dropped the ball this generation. Bad advertising, ill will with the gamer audience, and infighting sunk the PS3's shot at victory.
3: Crossed priorities: The reason the Wii is so successful is because it has an amazing focus in it's design. The only reason it exists is so you can put games in it, then swing around the wiimote and laugh, having stupid, honest fun. And the only reason that nintendo's selling it is because they love money, and they want all of your money in their pockets.

The PS3 exists because sony wants Blu Ray to succeed. But it also wants to subsidize the amazing power of the Cell processor. But it's also trying to push amazing HD graphics to make more people buy HD TVs, and Sony Brand HD TVs in particular. And it's also supposed to make money.

This leads to a weird set of circumstances for games. PS3 games have to have state of the art graphics, otherwise you're not showing off the cell and you're not pimping your HD TVs. But they have to be cheap so Sony can get their money. And they have to be huge, because sony has to show the power of Blu Ray. In order to make games that are relatively cheap, huge, and graphically powerful, sony gave up time. That's why Killzone 2 is getting released now when it was first previewed in, what, 2005? GT5 isn't going to be released until god knows when.

If the PS3 launched with GT5 (with kind of shitty graphics, but still a lot better than last gen), Killzone 2, and another big first party game, Sony might be in the lead right now. Instead they were lax in releasing games on time, and the legend that there aren't any good games on the PS3 got out.

(As an aside, this entire story happened before with the gamecube. Nintendo got stupid and released with no good games. They held off their important first parties (Mario and Zelda) for a couple years. By the time they actually started releasing the goods, they were in last and everybody had already memorized "Gamecube = no good games".)