America and the world as a whole isn't ready for a new format yet. There was a survey somewhere that only 10% of the US has an hd-ready set and of that 10% only 10% actually make use of the hd capability.
That's certainly Nintendo's argument. A correct one, imo. I definitely don't have an HD set because I don't watch nearly enough TV to justify one.
On to your 1st party argument, though. One of the things you are forgetting is that, while Sony has almost no 1st party support, they have nearly all of the third party support. Nearly every game gets released on the PS2 that isn't a Nintendo 1st party title.
That's why the PS2 sells. It has more games by a very large margin and anyone that will only buy 1 system is going to have a PS2 for that purpose.
First off ps2? do you mean ps3? Cause ps2 isn't even an issue I'm just using it as an example to predict this round. If someone that wants a ps2 hasn't bought one yet, they probably never will.
And just for the record I think I went over this. What made the ps2 so popular was a shortage of dvd players in japan. It resulted in a whole cause and effect thing that resulted in high inital sales for the ps2 (as a media player only), developers thinking that the system was popular for gaming, when at the time it wasn't, these developers getting conned into exclusive contracts, which resulted in a larger library for the ps2 by the time it reached the US.
Mind you there is a lot of truth in what you say, but let's not make the mistake of thinking that will happen this time. This time the 360 is out first and it's selling well, and thus a lot of third party developers are either going to skip the whole exclusivity cause and develop for both systems, or get wrangled into m$'s own exclusive deals before sony gets a chance.
It's far too early to talk software yet. (notice I said yet)
getting to your responses though....
Well there are even more issues than that about hd. In my area, for example, there are only 6 hd channels available on cable, and those channels aren't the broadcast networks, they are hbo, showtime, ect..... Now if this were 1990 that'd be great but these days people don't actually watch hbo live if they have digitla cable, they watch it on demand. On demand uses streaming video, with is only slightly higher than ntsc, and by no means hd quality in terms of sound or picture. On top of that, on those channels, only a small percentage of the programs are hd.
So even if you want to get a hd tv, in most areas hd programming makes up less than 1% of a day of television.
Yes the ps2 does have all the third party games... as does the xbox, as does the gamecube.
That's why they are third party, they are non-exclusive. Each system has around 5-10% exclusive third party titles and of that 5-10% usually all but the top 1% are crap. So like I was saying before, it usually comes down to around 5 or 6 major titles on each system (the exception being nintendo as a TON of their titles are nintendo exclusive).
Now if you are like me and find these 5 or 6 titles on BOTH systems to be crap. And in case you guys are wondering I'll just post my opinons on the major titles right here:

God of War=Lame ripoff of POP: SOT
Metal Gear=Very average action title saved by a rather good (yet insaine) story.
Final Fantasy whatever=lame rpg crappage
GTA Series=the most overrated pos ever to set foot on the ps2, xbox or pc
Halo=Very good fps.... on the pc... you can't play fps's on a gamepad.
Halo2=very average fps
Grand Turismo Series=over-complicated sim that would have been better suited for the pc (and ironically it was originally designed for the pc, but I wont bore you with the details).
Project Gotham Series=A mildly successful attempt by m$ to cash in on the drifting scene. The arcade style of racing is much more appropriate to a console but it is just missing something.
(end rant)
Anyway, if you find most of the first party titles to be crap and the bulk of gamers (who are casual gamers) either do, or don't really love any of them enough to effect their decisions, then it comes down to what the system will do (and I don't mean lame media player features) how much it'll cost, and what kind of graphics it'll have.
the wii "does" the most, the 360 has the best graphics (for the price) and right now, the ps3 has nothing going for it but the high price and I suppose some die-hard fans who can overlook the price.
So I concluding for the third time, the ps3 price is rather high and I think it is really going to hurt sales, like borderline dreamcast sales. And the dreamcast was an amazing system because of amazing titles, the ps3 hasn't proven itself to be that yet.