The industry does need competition, of course. However, at the moment Microsoft aren't holding up their side. They've announced an exhorbitantly priced box that records our living rooms 24/7, reserves the right to take our games away at a moments notice, prevents lending or reselling legally purchased games and the only innovation they offer is for "television" and not "games" which is the main duty of a console.
Sony OTOH said they are prioritising games and allow consumers to do as they wish with their purchased games. There is no competition, Sony rocked E3 and MS have some serious thinking to do.
The PS3 was the lagger last gen because it came out too late and cost too much. Sony aren't repeating either of those mistakes and further, seem to have even endeavoured to provide a resonable launch line up. No there is no competition here, Sony have a superior, consumer-friendly product at a lower price. If I do buy next gen, it'll be PS4, unless the homebrew scene makes its home elsewhere or MS seriously rethink their console.
PS. I wonder how retailers will take all this. Like in the Beta/VHS days when retailers decided the war, will Game/Gamestop choose to stock more PS4 titles/hardware as they can be traded in and therefore represent more profit?
PPS. Also, screw EA

I almost went a whole post without saying that. Though they dropped Project $10, they still have a long ways to go before they even come close to being tolerable.
PPPS. Anyone spending £430 on a console is a moron. A (budget) gaming PC can be built for that, with two decades worth of games on-tap from the get go, not to mention emulators playing generations of console games, CD/DVD burning, proper web browser, full video format support for media playback and not to mention access to the hard drive for trading saves, using mods, cheats and what not.