The strategy involves Blu-ray and the PS2.
BLU-RAY:
The inclusion of Blu-ray is looking more and more brilliant. You see, the PS3 was a very difficult console for game development. So naturally, the early games didn't look good and were few in numbers relative to the 360's. Blu-ray, while making the console expensive, helps keep the PS3 afloat.
Now, games on the PS3 are looking better and bigger thanks to familiarity with the PS3 architecture and to the space in the Blu-ray disk. Microsoft's use of DVD9 and weaker processor will make the Xbox 360 looking more and more dated.
PS2:
Gamers are still buying the PS2 in the about the same numbers as the 360. These PS2 owners will take a few years to enjoy their games. After that the PS3 will come down in price to the range of 200-300 dollars. These PS2 owners will naturally adopt the PS3 as their next gen consoles because of familiarity with brand name, exclusive games, free on-line, blu-ray movies, the biggest, best looking games, etc.
PREDICTIONS:
1) Because of the PS3's Blu-ray, the PS2, and free online, Microsoft knows that it will lose this genration. It has resisted reducing the price of the 360, adopting Blu-ray, and making LIVE free. Frankly, because Microsoft wants to be profitable this gen, no matter what it does it will still lose. To me, without a doubt, the 360 has already lost this generation.
2) Games selling better on the PS3 is only a matter of time, 1 to 2 years at most.
3) The PS3 will win the Wii this generation because Sony will adopt a similar strategy of the PS2; Sony will continue to make and sell the PS3 long after the Wii stop selling.
4) Sony will win this generation and the generation after that if Sony can make the PS4 backwards compatible with the PS3 with little or no additional cost.
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