Re: 'But surely if that's the case, won't Sony be the one to lower prices first?'
"The really significant move will be which company is going to be first to announce the next generation console? This generation has been around for a comparatively long time now, but as yet, there's nothing solid about replacements."
My understanding was that the release of Move and Kinect is expected extend the current generation by a couple of years atleast. Not to mention the slim 360 came out less than a year ago.
I think I read somewhere that MS expect to support the 360 to 2015, although I'm not sure if that would be along side the replacement for a while, or if that is when they expected to bring in the replacement.
Either way, I'm personally not ready to move on yet, I still think alot more can be squeezed out of the current generation, and there are still alot of games for the 360 that I want to play.
I think both the 360 and PS3 stand up well today, despite their age.
As for the Wii, I don't think it is finished yet. I think Nintendo can still do some cool stuff with it, and I still play on mine fairly often and enjoy it, but I think it will need a replacement sooner than the others.