One way to fend off the death spiral for a console is to develop a exclusive killer app. If you have a game that will be a blockbuster, you can go to one of the console makers and say, "We will only put this out for your system if we get a bribe."
That bribe is usually lowered or no kickbacks per disk. If the studio that made Halo was not owned by MS, they could go to MS and say "We figure we will sell 10 million copies of the 360 version of Halo 3 and seven million of the PS3 version. We will not do a PS3 version if you make it worth our while not to, say no fee per disk so we can pocket that $10 per unit and an ad budget worth $5 million".