Amidst all these essays is the lack of realization that there doesn't have to be a "gamecube" of this generation. There's enough breaking of tradition this gen - just look at the implied language so many have made that the 360 is this gen's leader, when it's not even close. But it is! The Wii sells tons of software, but only certain titles. What multiplatform software does it sell even remotely close to the 360/PS3 outside of Guitar Hero? Madden? 360 leads there.
So the traditional patterns we've come to expect aren't the case: the market leader is not the software leader in proportion of titles sold.
That said, Sony will make themselves a distant third if they don't drop the price of the console soon. They can't afford to, we're told. Maybe that's true, and maybe that's not. Sony is, however, caught in a bind because they can't afford to keep it $400, and they can't afford to drop the price.
Do they want to take a loss up front and make up the profits in software and Blu-Ray sales? Or do they want to keep the machine profitable and continue conservatively? I'm no expert to say what they should do, especially considering the current financial climate (and it's not getting any better anytime soon). But they're going to continue to lag in sales if they don't drop the price. I think we can all say that for a fact.