Yep the Xbox 360 is more wanted:

$299 + 6x$50 (Live) + $200 (Blu Ray) + 2x$20 (Play n Charge for two) +40 (controller) + $80 (Wireless) = $960

vs

$399 + $45 (controller) = $444

So you see the PS3 is half the price of the Xbox 360 and yet the Xbox 360 totally pwns the PS3 in spite of the PS3 being almost half the cost!!! So you see how much people desire the awesome which is the Xbox 360? Sony really is desperate, they probably think that if the PS3 is close to 1/3rd the cost of the Xbox 360 ($299) it might outsell it.

Edit: To account for the longer lifespan of this generation.

Never? why is that?

But it they were the same price, MS still has the advantage of producing the cheaper machine. So MS will always lose less money if any at all.

"Who cares if the PS3 wins in those regions? The 360 still has a HUGE advantage in WW sales and that continues to grow every week"

I sense an xbot.

Anyways, the xbox 360 has a 30 million unit sales worldwide right? But is it really "worldwide"? The reason why the xbox 360 has more sales than the playstation 3 overall is because of american sales (8 million lead worldwide). In america , the xbox 360 has sold 17 million units whereas playstation 3 has sold 8.5 million units. The difference between those sales in america is 8 million. 

8 million lead worldwide. 8 million lead in america. Makes sense to me. Not really worldwide is it?

PS3 is way more desired, but not everyone can afford it, so people chose the cheaper option, that is good too, though.

A part of the world but it is NOT the whole world, as some people make it seem (npd comes to mind). America is probably the only region where the xbox 360 is second place. But every where else, it's last.

Unless I'm looking at it wrong, the 360 is also 2nd place in Europe. Your sentence would be correct if you swapped Japan for America and PS3 for 360.

I can think of no technical reason (there may be liscencing issues) why, after both companies have finished migrating most of their respective systems on chip, there should be a significant cost difference in the long run. Storage is an issue, but once the price of 16GB flash modules become cheap enough, I don't see why they couldn't put that on chip also as the 360 arcade does right now, albeit with way smaller amounts.

I suspect its due to how the PS3 is made.

They have to pay:

• Blu Ray playback license will likely always cost between $5-10 (My deviant word I never spell right)
• For the XD ram/memory controller royalties along with increased cost due to it being more specialised.
• For a compulsary HDD in all models, especially considering the number of 5GB installs. Microsoft could get away with much cheaper slow flash without a specialised controller and thats just for DLC and Arcade games.
• Nvidia RSX royalties. It was a significant enough expense for Nvidia to mention it in their financial report and its paid per PS3 made as Nvidia mentioned it in their financial report in reference to lower than expected PS3 sales. Also they may not be able to combine the RSX and Cell on the single die as Nvidia may not want another company snooping around on their chip. A leaked Xbox 360 roadmap indicates that a combined Xenos/Xenon is on the cards.
• For a more complicated PCB as they have dual 128 bit buses so they will likely need a larger board and or more layers long term than the Xbox 360.
• The Blu Ray player will likely always be at least a little more expensive that the DVD player in the Xbox 360.
• They don't own the Cell patents so they must also buy the chip rather than have it fabricated on contract.

Also they don't get those lucrative Xbox Live revenues.

Does this sound reasonable? I understand that you know 30* more than me!