@BrianK

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I find it interesting from the standpoint that prior to the recent PS3 price cut the 360 was the only console to gain in sales compared to last year.

Basically you're giving half the answer yourself indirectly. The PS3 didn't see an official price cut since 2007 and the XBox 360 did.

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Also of interest is that the 360 has a higher games sold per console then the others.

The XBox 360 had a 1 year headstart in the states and even more in Europe. PS3 owners buy more games per month of ownership than 360 owners.

The PS3 attach rate is currently about 7.9 per console, at the end of 2008 the 360 had an attach rate of 8.1. IMO nothing to overhype, considering the headstart (people owning their console for more months on average, thus increasing the amount of games bought per console).

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So even with the well established knowledge within the market of problems the market hasn't been hit hard.

Hit hard with regard to reputation, but probably it sparked additional sales. Remember that for years 360 fans have been shouting everywhere the issues had been resolved with every new 360 model released. So new buyers in the past may have been misinformed, but once you invest a lot into the platform it's more likely you stick with it and swallow what you are being served.