Well thing is between the PS2 and PS3 generations Sony made a lot of bad public statements, doubled the initial asking price of their system, tried pitching it as an all in 1 media box, and got ballsy enough to tell people to STFU that they were being nice to people saying they priced it too cheap.
That pissed off a TON of both long standing Sony hardware owners (like myself) and fueled the fires of people who have been strongly allied in their buying power to one of the other guys. Honestly Sony basically asked for and well deserved the abuses they've have shoveled at them since pre-launch with their very arrogant, bizarre, and generally very bad behavior.
Now they've stepped up and are trying to act like the caring company by knocking down the price of the 60GB unit by $100, killed the smaller one in some part awhile ago, and then reinstated the $600 tag on a unit with just 20 more GB of HDD space still falling 40GB short and with a $20 higher tag of the direct competition (360.)
They're not really opening themselves up to gaining much love from the market on the whole. This drop per-say, of the 60GB unit has just opened the door to a few Sony huge fans who couldn't pony up the $600 as easily as the $500 so they'll see a boost in sales for the time being. Once those guys get their stuff, just like the Christmas shopping season boom, it will taper off and stagnate again as it's just too much damn money.
They seriously need a fair price and some solid unique titles to start doing some serious catch up. MS has some good showings for them, Wii has a few too in its short lifespan + that price is just hard to ignore at $250 and games being $30-50 vs $50/60 on the other two.
Again that's why I picked YES, they're 'doomed' for now, not as a company, not as a brandname, just in the sales wars between the three until they get their heads out of their asses.