Well, Sony has been in trouble for quite some time... however they're putting everything they have into making the PS3 and BluRay work, and I think it will pay off for them in the end.
The real winner in the console war will probably be the Nin-Wii, which is the least powerful, and only non-HiDef supporting console. But Nintendo is still the only console maker who manages to make the system profitable from day one, and usually has the most amount of actually fun games. Even more impressive is that the Nin-Wii will have two killer app titles at launch, both the new Zelda and the new Metroid. With a new Smash Brothers and a new Mario Brothers game coming out within 6 months.
You know, if Sony had the brains behind Nintendo working for them, MS and Nintendo wouldn't have a chance
Punch Cards -> Paper Tape -> Tape Drive -> 8" Floppy Diskette -> 5 1/4" Floppy Diskette -> 3 1/2" "Flippy" Diskette -> CD-R -> DVD±R -> BD-R
The Progression of Computer Media