Why Sony might be in trouble
$600 price point. And the Wii factor.
The Playstation 2 didn't have the best specs, nor was it easy to develop for. It was, however, popular from the start. More importantly, popular in Japan which has the greatest gaming culture. The influence of Japan is far-reaching which is why Microsoft has spent so much money trying to infiltrate that market.
Sony and Kuratagi are convinced that people will buy the PS3 irregardless of anything. They could be right but they certainly have stacked the odds against themselves. This situation is similar the N64 - had Nintendo only included a CD-ROM drive, they would have won that generation. The price point differential is considerable even without factoring in the cost of an HD-TV. The PS3 is not merely a gaming machine as Sony has reiterated, but what about people who aren't interested in HD?
Big gamble - pushing Blu-ray acceptance through the PS3. HD requires a sizable investment and probably won't become mainstream for a least a couple of years. Microsoft was smart not to require HD-DVD. If blu-ray doesn't catch on, Sony is in a huge bind. Compared to the PS3, the 360 looks like a bargain, with similar graphics horsepower.
Secrecy - By not revealing all its cards, Nintendo builds more interest in the machine. Final specifications of the CPU/GPU have yet to be released for a machine launching this year. Nintendo has consistently played down the graphical capabilities of the Wii, common belief is that the games are "a bit better than Gamecube" (aka crap). If they suddenly announce that they are using a 1.1 gHZ processor with an R520 GPU, this will exceed all expectations. Contrast this to 360/PS3 developers releasing CG "previews" and passing them off as gameplay. When the actual screens are shown, gamers feel like they've been cheated.
Negatives: four Gamecube ports builtin. Good for existing owners but IMO a waste of real estate. Why not include gamecube -> USB adaptors. Having more USB ports built-in would be more versatile. Not a huge fan of legacy components in general, *cough* dualshock.
What's old is new again - Like the ipod to "insert ugly mp3 player", Nintendo is now the alternative to the beefy MS/SONY machines. Losing the past couple console wars relegated it to "niche" status. They are definitely playing up that aspect, but now are poised to return to mainstream gaming consciousness.
Wii is the dark horse, and now has the best opportunity to exploit the mistakes of Sony.