It's just too hard to develop games for the PS3 as opposed to the xbox. They are so far behind on online services, it is difficult to see Sony catch up with xbox live. Lower the price to 350 would help a lot, but that's a big hit for Sony to take, and it still might not be enough. As usual, it's the content available for both games and the online experience and Sony is way behind on both counts. The problem is Blu-ray. It makes the PS3 too expensive and nobody really wants it. Developers are not happy about developing for the PS# and two game companies I know are abandoning the PS3. Unless Sony moves quickly to cut the price and get a real online service, they will lose this war by xmas.
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