Wii and PS3 have literally exploded onto the streets of the US and the Xbox 360, despite being a very good new generation machine, now seems like yesterday's console. Wii is about to hit markets outside the US, followed by PS3 in in March.

While the effect on Xbox 360 sales can't be predicted with certainty, the chances are that well-exposed Xbox 360 will seem old hat compared to the newer consoles.

The obvious conclusion is that Microsoft, which already makes a loss on Xbox 360 hardware is going to have to drop prices and make an even bigger loss to stay in the game. Look for significant Xbox 360 price cuts and games bundling in the not too distant future. {moscomment}