While Sony really seemed to have raised their game lately, M$ seem to be doing everything they can to drive their platform into the ground, i'll not deny that while i own both systems i do most of my gaming on the 360, and that i feel the online service offered by Xbox is better than that offered by playstation, whether it's superior enough to be worth paying for is debatable, probably not, but as all my friends own xboxs and only one owns a PS3 i don't really have much choice in the matter. What concerns me is that M$ could so easily give the xbox a version of internet explorer so why haven't they? If they are in profit with each xbox they sell why raise the price in the UK? Why have they made no move to counter the fantastic gains made by Sony in the last few months?
If it weren't for project Natal and the rumored deal with AMD about a new Xbox i'd be starting to think M$ are about to end their involvement in the console business and just write it all off as a costly mistake.

Have M$ lost their minds? In the face of increased competition from Sony the response is to raise prices! I'm beginning to think they want to lose the console war.

I really can't see this happening, M$ don't do anything without it being a revenue based move and Blu-ray is a loser for them at every turn, why give the user the choice to buy blu-rays when you want to charge them a premium for downloading movies instead? Also the cost of the drive itself will just underline the already superior value of the PS3.

As most art assets for a game are created high resolution and scaled down to meet the needs of current hardware, combined with the vast array of existing post processing effects that can be applied cheaply with better hardware, i think the jump in the cost of games will not be as steep as it was for this generation, provided the hardware sticks to a similar architecture and there are no great changes in the development tools. 2012 seems a good year for a new console to me, longer than previous generations but not so long that console gaming starts to look outdated.

Yep, iPlayer would be much better, how about 4OD as well, at least not every other console this generation has that, once again M$ screws it's customers with another cash wringing so called service. I'm not just 360 bashing, it's still the console with the best games, but i sometimes think M$ really don't have a clue what they're doing.