Generally, 'cleverness wins over strength' - What if both fail? Presently, Microsoft is facing the similar dilemma. The software giant seems heading to its demise as reports from all around the world are providing very unfriendly evidences. Vgchartz.com gives a glance of the US sales figure for the last week ending on July 14th. The figures show that the PS3 has outsold Xbox360 in the US. Continuous plunging sales has dragged the console down to the sixth place (35,084 units sold) below PS3 (41,005 units sold).

Below-mentioned is the sales chart for last week:
DS - 97,404
Wii - 76,394
PSP - 50,890
PS2 - 43,406
PS3 - 41,005
X360 - 35,084
GBA - 14,451
GC - 1,864
Xbox - 11
The next-gen war has certainly deepened - it is difficult to define the winner. However, results started coming in the favor of PS3 since last month, when a couple of online retailers like Amazon and eBay reported that the sales of PS3 is on the rise whereas other two have sold below average.
Why Xbox360 is losing ground?
The Xbox360 has crossed the 10 million landmark months ago and currently the number of consoles sold worldwide is 11.6 million. Why isn't Xbox360 selling at the pace it was selling earlier? Is it a saturation point?
Someone has quoted it very true that 'the PS3 is a marathon racer while others are sprinters' who will faint after some time.
I think Microsoft is receiving repayment for Xbox360 infringement. Reasons mentioned below might be the reasons for dying Xbox360 sales:
'Red rings of death' infringement
Although, Microsoft knew it from very beginning, still kept shipping/selling the flawed consoles to the rival-free market in order to generate high revenue. But, the trick didn't work for long and soon after vending few thousand units, the developer started receiving flaw reports in the console from all around the world. Last of all, Microsoft admitted that all the consoles sold till date are faulty.
The flaw is 'three red rings of death', and with extending warranty to three years, Microsoft has avowed to repair all 11.5 million sold consoles free.
Increasing Blu-ray demand
The surging PS3 sale signifies an increasing demand for Blu-ray. However, the console costs highest of all, still it is selling well - especially in past four/five weeks.
PS3 price-drop and new 80GB versions
At this year's E3, Sony confirmed a $100 price cut for 60GB PS3 and 80GB version for Americans. This has also speeded the PS3 sales. The PS3 sales saw a sharp rise (2800% up) at Amazon only few hours after PS3 price-cut confirmation.
The fresh blow that has rendered Microsoft handicapped is a sudden departure of Peter Moore. It has added salt to Microsoft's festering wound. However, he has been replaced by Don Mattrick, but few analysts predict that Moore's departure is a huge loss for Microsoft.
The matter has gone deep into the wires. Although, Microsoft has extended the warranty to three years and promised to get all the flawed consoles fixed, but 'dew never fills a well'.