@kowenicki

I want to tread lightly about this given that it is a extremely sensitive subject for some members of this community. Who do not take kindly to bleak scenarios. They want to feel safe about the future prospects on the PS3. Though the reality in North America is that the console is no safer today then it was a year, or even two years ago. The system has run dangerously close to stalling for so long it is almost begging to go into a tailspin.

This is actually a paradox when it comes to price reduction models. Being that Sony rarely offers them across the board. Do it in North America, and they may stabilize the platform in that region. However it could lose them their penetration in Europe. Do it in Europe, and a hard winter in North America can doom the platform in that region.

It seems sometimes that Sony has spent this entire generation in a damned if you do, and a damned if you don't position.

I actually think that brand plays a strong part in Console sales. In my honest opinion, it garanteed US for X360 and it also garanteed that PS3 wasn't blown into oblivion in Others.
I really think that the reason X360 was so successful in US is that it was a viable option to the PS3 and it was American. Since most great franchises would be shared between both HD consoles, they could go all american without shedding a tear. Live helped tipping the balance in favour to the MS console and Halo3 and Gears helped closing the coffin. I reckon PS3 is pretty much dead in US. They can sustain their position with a price cut, but I don't see anything in the horizon that would make the PS3 become the cool console all of a sudden.

In the rest of the world the picture is quite different. Ps3 sold very fast until X360 price cut, almost overcoming MS console in less than 2 years. That is Brand power. PS3 had no games, worst Network(this is still a fact for some) and it was at least $100 more expansive. Since price cut, X360 managed to widen it's advantage and counter the momentum PS3 had till then.
But others still show their bias, with PS3 sometimes selling more software weekly than X360, despite x360 having 15% more userbase than Ps3. I think a price cut and a game like GT5 can secure this territory for Sony, since I believe the price cut card will work only till a point.

Overall, I reckon that unless MS pulls the plug prematuraly in favour of the new X, Ps3 will not overcome the sales difference, but will reach similar numbers WW. Japan will help, since it's PS3 territory all over and X360 is dead there, but since it's a smaller market now, it won't be decisive.

All in all this gen served MS rigth, since helped them estabilish a strong gamming brand, with at least two WW known farnchises. Sony needs to rethink it's strategy for next gen, but at least learned that they need strong IPs to have a chance to succeed, and they're producing them, for our (gamers) sake. I would bet that next MS console will sell in US at brand only, before showing its good stuff.