Actually, you really defeat your own arguments by injecting snide remarks or other similar things like replacing "S"s with with dollar signs. Regardless of whether it's $ony and M$. It shows you're not thinking objectively and thus people are less likely to take you seriously.
10 Absolutely completely new exclusives for E3? You'e kidding yourself. 10 exclusives regardless of previous series is still doubtful. Not even the 360 has that lineup.
And the same arguement about the system coming out later is still applicable, but not completely. The 360 has had a year's lead on the PS3, as such you can't reasonably expect the PS3 to have the same number of games as the 360. Considering the time it takes to develop a modern game, it's almost impossible especially considering no one knew the market for PS3 games. It'd be a better deal to make PS2 games still at that point.
However, what really matters is when it comes time for someone to make a purchase, the 360 has a larger library, although more limited (explained below). That and Sony should have realized this would be a problem, releasing a year later. They should have done more things to promote the system such as a lower price point from the start, really pushing or buying up more the 1st party developers, developing a lot more casual games quickly like Super Stardust, making sure the PS3 dev kits were top notch and shipping promptly, and trying to copy the 360's live and marketplace a bit more.
Instead, through a series of bad management decisions they expected to get sales based on the playstation name alone, and that failed. And now the head of Sony isn't Japanese anymore, Kutaragi is gone, and finally changes are happening that'll bring things back in line.
Sony does have an opportunity to trump MS, and that's through game diversity at the end of the year. Although that opportunity is fading as MS is fixing this already by throwing money at Japanese developers, and pushing games that look and feel like they would have been on a Sony system last gen. Right now the 360 rules the shooter world. First and third person, if it's got guns and an on screen crosshair, the 360 tops the genre. But they don't have much else in terms of exclusives. Later though we'll be seeing things like Blue Dragon, Lost Odyssey as exclusives.
If Sony puts out a more diverse and still high quality set of eclusives, they could attract a wider market. Killzone 2 to get the shooter crowd, FF13 (if they can retain the exclusive) for RPGs, Heavenly Sword and God of War 3 for the fighting games, Gran Turismo for racing, etc... Looks like they're tapping into the same talent MS used too, since they've now got Epic, the guys who printed money for MS through Gears of War working on a PS3 exclusive.
Then on top of that if they followed through with the XMB, sony online, and Home enhancements, things could look up, especially with the price drop.
Once again, this'll be a very interesting E3