No doubt Sony had more IPs, but they also milked to death as many as they can. As soon as a IP does well, they'll churn them out just as bad as MS. As soon as a franchise doesn't do well, they'll can it.
360 had better games as a whole to me. All the XBLA and Indies games were icing on the cake as there must have been an advantage of 1,000+ games. Don't get me wrong, most of those Indie games aren't great, but XBLIG had something like 1,000+ games alone.
No doubt Sony had good IPs, but MS were good too (just fewer). What 360 had was noticeably better third party games and online. Not only were most 360 games better, but certain kinds of games (often Bethesda and Bioware) were much worse on PS3. We're not talking about a few FPS slower here or there. But noticeably worse visuals, frame rate and a key game like Skyrim was lousy. Among the best games of 2011, but unplayable for some people who got the corrupted saved games issue due to PS3 ram. It got so bad, DF's analysis showed the game occasionally dropping to ZERO frames per second as the game would lock up when walking around.