The PS3 has to come down in price, and right away. The games look pretty, but if no one buys the console, it's not going to make it very long. They need to make the developers happy first, and no one wants to spend 20 million dollars to develop a game if there isn't a large enough console base to make it profitable. They didn't have one software title in the top 20 in march, which is amazing considering its a new console and there are only a few games out.
My prediction: You'll see a much lower cost PS3 (~$350) come out well before the holidays. It's the only way it's going to survive.