M$ is going to shoot themselves in the foot if they let Sony bask in the adoration for too much longer. They've already delayed too long. Not giving any response to the bad PR rumors mucking about is only hurting their position more. It's all silence and secracy, both of which are going to end up hurting the console sales.
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Hell, the PS3 launched a year later than the Xbox 360 and it still catched up.