That's quite a claim.  Usually I agree with your predictions, but this one seems very unlikely.

Let's do a little math...

Assuming that Sony actually managed to pull off a $299 slim model for Christmas season 2009, and assuming that would lift the PS3 sales by 45% for the season, and assuming they actually managed to have the units on the shelf by Sep 1:

1. PS3 total sales for September through December 2008: 4.3m

2. 4.3m x 1.45 = 6.2m

3. 360 total sales for September through December 2008: 6.5m

Let's build a few scenarios with the same assumption that the PS3 sees a 45% bump Sep-Dec year-on-year compared to 2008:

1. 360 sales for Sep-Dec 2009 = Sep-Dec 2008: the 360 outsells the PS3 by 300k units and widens the gap from 8.5 to 9m units total.

2. 360 sales for Sep-Dec 2009 = 80% Sep-Dec 2008: the PS3 outsells the 360 by 1m units and reduces the gap from 8.5m to 7.5m units total.

3. 360 sales for Sep-Dec 2009 = 1/2 Sep-Dec 2008: the PS3 outsells the 360 by 3m units and reduces the gap from 8.5m to 5.5m units total.

4. 360 sales for Sep-Dec 2009 = 1/4 Sep-Dec 2008: the PS3 outsells the 360 by 4.6m units and reduces the gap from 8.5m to 4m units total.

How likely are those 4 scenarios?

Scenario 1 is possible, but unlikely unless MS provides another price cut, perhaps $50 per unit.

Scenario 2 is--in my opinion--the most likely assuming MS does nothing but normal holiday advertizing.

Scenario 3 is not very likely... the 360 selling half as much in 2009 year-on-year compared to the same period in 2008 would be a shocker.

Scenario 4 is... well... rediculous unless MS decides it wants to exit the business or we go from recession into worldwide economic collapse, in which case all consoles will experience an immediate and longlasting reduction in unit sales somewhere between 90-100%.

In conclusion, I don't see the game being over for 360 this generation regardless what Sony does.

Yes. 100%

The price-cut/Slim is coming, there's no doubt about that. Price cuts for mass market items have exponential effects on sales -- we're talking a near doubling of PS3 sales. This is the first holiday season where the PS3 library is outshining the 360 -- Microsoft's lack of first-party studios will come back to bite them very, very hard. It's not the MS is going out of business, but they'll remain a follower in the industry, not a leader.

I know I'm making a BIG leap here but what if Sony added PS2 backward compatiblity with the PS3 slim and a price cut? That would be a major home run for Sony. Seeing as they filed patent for the technique. That would justify why Sony is anticipating heavy orders with their component orders.

Yeah, I know I'm connecting a lot of random rumors/news here. Oh well, wishful thinking.

I believe option 2 as well. 20% down YoY if X360 drops $50 and goes against a $299 Slim this Holiday.

Now 'game over' is a very drastic use of words, but I believe it because I instantly look into the future to to see what implications this would have for around 2012 and the end of this gen.

PS3 $299 winning this X-mas by 1 million may not sound much, but it would start a trend where the PS3 could sell 13 mill and the X360 just 10 million in 2010, another 13 mill PS3 against 9 million X360s in 2011 - and voilá, the gap is erased!

I didn't imply the PS3 slim/pricecut would not be arriving in my post... I questioned the assertion that if it did, the potential 45% increase in sales would spell game-over for the 360.  You're using a mish-mash of assertions... that the Slim/pricecut would increase sales by 100% (double), and that it would have an exponential effect on sales (sales to the 2nd, 3rd, 4th, etc. power).  Yes, double the price is the same as saying exponential, as long as it's only an exponent of 2... saying sales increases would be exponential is misleading since that's the very lowest end of the exponent range (unless you're talking about to the 1st power, which wouldn't have any effect).

Let's redo the math assuming you're correct (double the sales):

1. PS3 total sales for September through December 2008: 4.3m

2. 4.3m x 2 = 8.6m

3. 360 total sales for September through December 2008: 6.5m

Here are the re-done scenarios:

1. 360 sales for Sep-Dec 2009 = Sep-Dec 2008: the PS3 outsells the 360 by 2.1m units and reduces the gap from 8.5m to 6.4m units total.

2. 360 sales for Sep-Dec 2009 = 80% Sep-Dec 2008: the PS3 outsells the 360 by 3.3m units and reduces the gap from 8.5m to 5.2m units total.

3. 360 sales for Sep-Dec 2009 = 1/2 Sep-Dec 2008: the PS3 outsells the 360 by 5.4m units and reduces the gap from 8.5m to 3.1m units total.

4. 360 sales for Sep-Dec 2009 = 1/4 Sep-Dec 2008: the PS3 outsells the 360 by 6.9m units and reduces the gap from 8.5m to 1.6m units total.

Scenario 3 and 4 are unlikely... so I still can't see how doubling PS3 sales through the end of the year or even longer is going to be a game ending scenario for MS unless MS just sits still from here on out.

I could see that happening as well.  The difference is, I don't see 360 and PS3 in a dead heat in 2011 as game over for MS.  I don't understand why Sony wins in a tie and MS loses, particularly considering Sony had a massive advantage last gen and is struggling to get tie with MS this gen.  If nothing else, I would think anything less than re-achieving domination this gen would be a loss for Sony, as it's a slide from being King-of-the-Hill to a struggle for 2nd place.

You are right, but most people on the internet on forums like this see this battle in black and white (me too, mostly).

Who sells most consoles before next gen starts is the winner between PS3 and X360. Everyone on VGC is referring to battle for 'second' and 'third' place.

And just imagine in your head for a second that it's early January 2010 and the PS3 has just won the Holidays by 1 million units over the X360, going into 2010 with huge momentum. The majority consensus on this site would declare second place for PS3 and third for X360 in this gen, there would even be no argument.

Does the Author of this topic work for Sony? Because he seems to have the "Sony disease" of immediately discounting Nintendo. The Wii will destroy the Ps3 everywhere this holiday season in all territories. To completely discount one of your rivals/ not your console of choice just because you know it will destroy you means you actually win absolutely nothing.

LOL!  Well, that is fairly black and white.  As for me, I think MS has already "won" in this generation as they've done much better, marketshare-wise, than they did last generation and have captured a number of very high-profile games that were Sony exclusive last generation.  Wii has won as far as being in the number 1 spot.  PS3 is a dismal failure compared to the PS2 if you consider the relative market share, but it wins in a number of ways as well, particularly as a media server.