Pre E3 announcements
Both Sony and Microsoft have made announcements prior to E3, both intended to deal with the perceived faults of each system.
Microsoft have extended the warranty on the Xbox360 from 1 year to 3 years. This is to counter the reported failure rate of 33% on Xbox360 purchased, including the new Elite model (by comparison, both the Wii and PS3 failure rates are less than 1%). This will no doubt help with consumer confidence a little, however, it would have been better if they had addressed the issue directly and actively done something about the poor hardware reliance.
Sony have announced a price cut for the PS3 in the US, down from $599 to $499, which should hopefully help to shift units in the US, where the machine has been trailing drastically compared to the Xbox360 and Wii (Europe and Asia are a different story). Bizarrely, they have also announced a 80Gig model, including Motorstorm for $599.
So with those announcements out of the way, the gloves come off and the real fight for consumer interest commences at E3 in a couple of days.