[Damon Payne]

Regarding pricing and price cuts:

-The Xbox360 is 6-10million sales worldwide, already profitable, and in a much better price-cut position than the PS3, yet we see a more expensive unit using mostly "nothing new" components. The PS3 just launched, I don't think any console has ever had price cuts less than a year after launch, and it is using components that are new. I seriously doubt we'll be seeing a PS3 price cut this year, the numbers don't add up. A more expensive Xbox360 that validates the PS3 design decisions in some ways relieves pressure to cut the PS3 cost.
Fanboys are the vocal minority, the rest of the console buying public will see the PS3 as not such a bad deal after all. It's unfortunate for the early adopters that they might want to upgrade their console now, but I'd see the reasons if Sony did likewise down the line.

Regarding Microsoft's "mistakes": I deal with MSFT technology (.NET developer) day-in, day-out but have always favored Sony consoles and PC games on Windows. MSFT has executed so many things so incredibly well and wisely on the Xbox360 that its myopic and false to claim they are making mistakes left and right.

Consider:
1) They compete with Sony, they can't let Sony "have" the livingroom, of course they are going to try to douse the PS3 with an HD-DVD add on.
2) Technical requirement for Xbox360 games: the user can choose the in-game music be replaced by soundtracks on the HD. You're telling me you wouldn't like that in MotorStorm, et all?
3) All 360 games must support Live in some small way, even if just online scores.
4) All games use a common interface to Live, cross-game chat is included, etc.
5) Development for Xbox360 leverages the same APIs as PC development: DirectX, modified win32 API, etc. Barrier to entry is much lower.
6) I have XNA game studio on this PC. Price: free. I can write to the XBox360 APIs and if I come up with something cool $99 buys the subscription service to publish my game.
7) Background downloading, up-scaling of legacy games to HD resolution.
etc, etc, etc.

I believe the PS3 is very powerful and Sony is catching up VERY quickly and innovating new and different things at the same time. I believe public perception is shifting to see the method in the Sony madness, Blu-Ray is winning, the PS3 games are rolling out, the PS3 doesn't look like such a bad deal anymore.
Not recognizing what the competition is doing right makes one sound like an irrational fanboy. Consumers win when the pressure is on.