I think the success of the PS3 will be in performance. I mean I REALLY was not impressed with the 360's so called "improvements" over the last generation, it seemed like they just upgraded the video card from x-box and made it's casing prettier.
I think if the PS3 is really revolutionary, technology and graphics wise, it will do fine. But if it's on par with the 360, as in sucking

, it'll flop. It's a new generation of gaming, we want new, revolutionary, stuff (stupid, STUPID, Nintendo! you had the name!). We don't want more of the old just slightly improved.
From what I've seen, and alright I'm not religiously following the systems, the PS3 and the Wii will be the big competitors.