There are fundamental reasons why PS3 will succeed.. None of them have been mentioned so far.
PS3 is the best system, wether its the more popular or the best selling is irrelevant. When the 3DO came out, it was the best system on the market. Also, the games make a difference, I doubt PS3 will be the gamers choice if they like FPS games.
Japan - Japanese consumers have not indulged in the 360 experience. This means apart from Wii, there is absolutely no competition. Apart from Capcom/Tecmo there is no Japanese support for new product. I would imagine Capcom are just using 360 as a means to tap into western markets and port over a whole bunch of games to PS3 later on.
BR - It will take time, but the standard of BR will exceed that of HD-DVD and its built in. Not to mention 3 inhouse studios owned by Sony (Tristar, Columbia and MGM) who's movies will only be on BR. Oh and Disney too. Also, it should be noted that when PS3 launches, 3-5 million BR enabled players will be in homes at an alarming rate. I doubt HD-DVD will have ANY WHERE NEAR THAT for the forseeable future.
Backwards compatibility - Its almost 100% guaranteed.
Price - HD-DVD $500 vs PS3 $600.
Negatives re BR
Sony hasn't launched a player yet. Only Samsung has. Although I find this strange it does not surprise me that Samsung failed to spark enthusiasm in the format. Wait for Sony's machine and then decide.
As for HD-DVD gaming -
I can't see in the forseeable future that anyone bar Square could fill a DVD9.. And even if they could you could just use 2 of them. Obviously Sony will get Konami to fill a whole BR disc to make it sound necessary to have all that storage, but we know thats BS.
360 and PS3 are both great machines obviously. Its just sad to me that consoles have gotten into "can I fit it in the budget plan" like a motorbike or a sports car.
I sway towards PS3 because of Japanese support/first party titles. I would not buy one at launch because thats stupid imo. I will be getting a Wii based on the fact that it represents good value at an acceptable cost.