People keep bitching how expensive the PS3 is, and I get that. But they often compare unfairly a $300 XBox and the $600 PS3.
The $300 XBox lacks a hard drive, and many of the features that come with the $500 PS3. Really, the only fair comparison is the $400 XBox and the $500 PS3.
For the $100 price difference you get a Blu-Ray drive, 1080p support, free online gaming, homebrew and Linux support, and more processing power.
To some, that is worthwhile. To others, it is not. However, as much as I love my XBox, and intend to go buy a 360 when I'm less broke, I have to believe that once all the major PS3 titles become reality, people will buy the console.
Both MS and Sony should do well. I'm sure Nintendo will turn a hefty profit in this generation, but over the length of the console, the lack of DVD playback and hi-def support will crush the console. The reality is that people crave the very best graphics. Titles with inferior graphics do not sell. After playing Oblivion, people are saying that Morrowind is flat-out unplayable for having horrid graphics. When the 360 and PS3 really hit their stride, the Wii will show its limitations.
Again, Nintendo is making profit on the hardware, makes profit with all the first-party titles, and will make 100% profit on the virtual console selling me old games I already paid for. But ever since the NES, Nintendo has steadily lost market share with each generation. Either people will immediately be sold on the Wii-mote, or third-party support will dry up. And with Sony's half-assed approximation of the Wii-mote in a cheaper form, third party developers can make many of the same type of games on the PS3 as they could on the Wii.
Developers develop for established platforms. They want to know that they have a large potential customer base. They know Sony has flat-out dominated two generations. Third-party support will be there. And the 360 is selling will enough, and Microsoft is catering to developers.
The 360 will maintain dominance in the market for another year. This Christmas the PS3 will have a fairly small launch. But by the NEXT Christmas rolls around, I wouldn't be shocked to see the PS3 pull into first place.
The Wii is a wild card, but my N64 and Gamecube both gather dust. I regret purchasing both, and I'm going to have to be really sold before I buy a Wii.