2009 seems to be the year the Wii will start getting some major 3rd party exclusives, with Sega leading the charge.

If these titles sell well and make a big profit, more and more publishers may choose to develop for the Wii.  After all, development cost is significantly lower on the Wii and if a game sells same amount on the Wii as on the 360 for example, it will surely make a greater profit on the wii. Soon this won't be a hard task considering Wii will have 2x the user base by the end of the year.

When Xbox hits a 149/199 (Arcade/pro units) price point it will be at mass market price with all features it has to offer. Anyone that wants a 360 should be able to afford and buy one. At that point I don't think 360 needs to worry about losing market share to ps3 and has to concentrate on making sure 3rd party development is still focusing on the 360 as games should drive sales at that point...

And what better way to re-assure the developers their games will profit by letting them know that ps360 multiplatform developed title is still going to make a greater return on their investment then a Wii exclusive. I believe porting the game over to PS3 (or 360) may add 10% to the total cost of development, which should still be financially beneficial if PS3 version sells 60-80% of what the 360 game sold. I am not talking about Activision, EA developed games...these guys have the budget to hire 3 studios and make a game for every platform...but I have the smaller studios in mind. Seems to me that with all the losses industry is putting up recently, these 2 systems(PS3 and 360) both need the other to sell as much as possible as they depend on each other for future software.

So my question is, do you think eventually MS may benefit from a PS3 price cut and PS3 selling more units?

I think the question you mean to ask is "Would the 360 be less harmed were customers to spend money on the PS3 instead of the Wii?"

Asking if you benefit by your potential customers spending their money on a competitor's products instead of potentially on your products seems silly.

I think it's in Microsoft's interest that Wii and PS3 support fall dramatically, and then said companies offer themselves up for Microsoft to swallow.

I think his idea is not entirely uninteresting... however, PS3 and Xbox360 are in direct concurrency with each other (more direct than Wii and PS360), and therefore it's very likely that if one console sells more, the other one will sell less... so the "total sales" of the HD consoles probably won't rise significantly...

I remember reading this as well.

While technically I agree that it doesn't really make sense on paper... I don't think its a silly way of thinking. I mean, PS3 will not get much exclusive development from 3rd parties unless sony pays for it. MS also won't get much unless they can pull away from Sony by 10-15 million consoles. So multiplat development seems like the only way to make sure smaller companies develop for the respected systems and not go bankrupt.

MS's presence in Japan is still pathetic and that wont change this gen...but if PS3 gets it together in that region and starts selling as much as the Wii, it may have a beneficial impact on future titles developed for Japan. etc...

I think the best thing Microsoft can do is to continue to bang home that this generation is here to stay and any investment in developing for the console will not be wasted by a replacement coming just round the corner.

From a developer standpoint, I think I might agree with the OP, attention shifted away from HD consoles will ultimately affect both the 360 and the PS3 and sharing games between the two certainly beats losing games entirely to the Wii.

I'm not sure if MS has that much to be worried about. If the PS3 fell off the face of the planet, the PC platform would still help support HD development. The similarity between the 360 and a PC make it a no-brainer for any game which could suit a console.

True... even if a game like FEAR 2 for example sells less than million copies on PS3 and 360 combined (not likely), the PC platform should make that game very profitable.