@sagexsdx, I agree that it is sort of a "chicken and the egg" thing as you described (nice description by the way), but I think that getting the price of the PS3 down to the equivalent of the Xbox 360's price would be better for sales than a slim version at this time. Also, Sony does have some good 1st and 2nd party developers that can bolster the software porfolio along with exclusives and the upcoming revised home service.
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I agree that it is sort of a "chicken and the egg" thing as you described (nice description by the way), but I think that getting the price of the PS3 down to the equivalent of the Xbox 360's price would be better for sales than a slim version at this time. Also, Sony does have some good 1st and 2nd party developers that can bolster the software porfolio along with exclusives and the upcoming revised home service.