MS should thank "The Depression" we've fallen in. Reeves said himself. MS was being beaten all around last year till the price cut in September. The Monster was showing signs of coming out with its ugly head, but wanst out yet. A month later (End of October I think, not sure) The global markets fwll, the moster got out full force and f*ckd the world's economy. Justly when Sony could have tried to pull the price cut thing we all know its necessary to have better sales. IF Sony had cut the price in the hollydays seson the advantage MS sports now could (and problably would, at least I think so) smaller, and this past two months of renewed "Sony's doomed" crap wouldnt be up. Imagine if Sony managed to cut the price $100,00 bucks back this hollyday season..Hey MS would do the same...yeah, and lose even more money than Sony when they're managing to make some (if that). Big If...but thanks to the meltdown, it was either selling lots and put in risk the SCE division, or protect it, by selling less (withou loosing lots of money at each console sold, wich in itself is weird...) Lets see if they can manage to cut the price in the beggining of its new fiscal years as the rumors are declaring.
I do agree Sony was stupid and arrogant, not noticing the lenghts MS would go to mantain the advantage it got by being a year old in the lead, paying for exclusives and taking exclusives of it, but now its too late anyway, at least for that, and its own studios are showing great games to hold off the blatant fanboyism (not really, but its keeping them at bay...somewhat...).
In this business its ok to buy games, IPs and such, all/everything have its price, but you end up paying in the end...examples...getting out early for MS meant RRoD and the new E74 (?) defects, the poor games at lauching (wich arent that much of a problem, in its beggining) and so on.
The only one that didnt f**** up was Nintendo...if you dont consider the core Nintendo gamers/fans who IMO got sha**** by the main point of the Wii being the casuals. They're welcome and all, but...well...the lack of games (either because of third parties putting their eggs on X360/PS3 basket in the beggining, or because its not that necessary to work hard when you sell millions of units every month because is cheap and, accordingly to many (which Iam not one of them), fun (well, enjoy it).
So, Sony is not out of the battle, its working hard to get up and in better shape in this global economic meltdown (and it means its better for US, gamers, competition is always good). MS is paying their way, trying to keep Sony as far behing as they can, and Nintendo is sitting at the top, swiming in money, caring for no one (IMO).