Of course MS has the Upper Hand, since it launched first and hence can play the reaction game, while Sony has to catch up, but there was a trend of sales that was changed with the price cut. The fact is : there's a limit to x360 price cuts. Sony is probably is trying very hard to cut PS3 costs, for several reasons(profitability, possibility of price cuts), so although I don't believe in a PS3 costing the same as a low profile x360 SKU, I guess is a matter of time until the difference is irrelevant.
Mind you, I'm not saying PS3 is going to have a price cut this year(everything points to it, but it's still rumours). In this case I predict 13mln X360 this fiscal year and 9mln PS3. What I'm saying is that MS position is not so strong as it seems. The X360 is still perceived as the low end machine in the majority of the world(US and UK are exceptions), while the PS3 is seen as the top machine, but expensive.
Up until now, MS strategy has been marketing towards the fact that is very similar to the PS3, but cheaper. It worked. That's why they fougth so hard to get 3rd party support. But they need to start changing that. They need now to produce new experiences only possible in the x360. NATAL is the answer. But they also need games to go along.
Denying the fact that is possible to PS3 to change the tide of sales is doing exactly what Ps3 fanboys did in August 08, before the price cut, when we said it was temporary and soon PS3 would come back in top.
BTW. I live in Brasil, I wouldn't get Alan Wake in X360 not even if I had one. Games here are very expensive and I favour PC when possible.