Look at it objectively. The best selling SKU of the 360 is the elite which is just under 500 dollars, so that's obviously not out of many gamer's budgets. On top of that the PS3 has/will have the following advantages.
Most people are buying the Elite for use as a Media hub/center. While the PS3 does have some media-rich features (i.e. blu-ray) I really think the Xbox 360 has the edge.
* Xbox 360 has the ability to download lots of HD/SD digital content
* Xbox 360 can easily connect and stream content off Windows PC
* Xbox 360 will have a really good IPTV service soon. Microsoft has already entered the IPTV race.
Also, you're assuming that price is the main reason why the PS3 isn't selling. I really think it has much more to do with no attractive software. Right now the only good games out on the PS3 are avaliable on the Xbox 360, a cheaper console with better online. No good reason to get a PS3 right now.
- Vastly superior hardware (cell, blu ray, HDMI 1.3 etc)
- More reliable hardware
- More Advanced rumble AND limited motion control
- Free online with a superior interface and dedicated servers
I will address these point by point.
Point 1 - "Vastly superior hardware" doesn't mean anything if the games don't reflect this. Right now the Xbox 360 games are running faster and look better. The PS3 versions of Xbox 360 ports usually don't look as good and have serious issues with the graphics or framerate.
Point 2 - I have mixed feelings on this one. First of all, the PS3 has only been out in the wild for about 7 months at this point. It's not like people's PS3's don't brick at all. With the Xbox 360 you now have a three year warranty, which is stellar for a piece of hardware. If your PS3 bricks two years down the road, you're out of luck.
Also, the 65nm revision which is going to be implemented before the year ends will probably fix all of these issues. I'm pretty sure the Xbox 360 is going to be a very solid piece of hardware soon.
Point 3 - What do you mean, "more advanced rumble" ? Are you refering to the rumor that the PS3 is going to get touch sense? Really, I doubt we'll ever see that. Right now the PS3 does not have *ANY* rumble avaliable.
The motion sensing is a gimmick, obviously. That's why it's probably going to be dropped for rumble.
Point 4 - Free online, sure. However dedicated servers and better interface? Get real, Cow. XBL is the best online service avaliable. PSN is simply lacking many of the features that makes XBL so nice. Let's wait for Home to come out on PSN and see if it makes the online experience more cognitive.
In addition we are seeing the first examples of multiplatform software that is as good as, or better than its 360 equivelant (Rainbow Sic, Oblivion etc). The exclusive games this year may be pretty poor (lol @ heavenly sword, motorstorm and lair) but next year we are due to see some SPECTACULAR titles that match anything on the 360 (heavy rain, FF13, White Knight Story, GT5, LBP etc) and unlike many of the "exclusive" games on the 360, we will not be seeing PC versions of said titles. With amazing titles titles like Bioshock also rumoured to be coming to the PS3 as well as few BIG exclusives from the likes of Bioware and Epic i think it's safe to say that thet the console wars are FAR from over.
There are more Xbox 360 ports that are worse than better. The only game that is considered better is Oblivion. Everything else is considered far superior on the Xbox 360.
In order for the PS3 to beat out the 360, the upcoming games are going to have to do better than match. They will have to be hands down better. While games like FF13 and MGS 4 are really anticipated, so are games like Halo 3, Bioshock, and Mass Effect.
We will have to wait and see which games turn out to be stronger.
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