If Sony Show PS3 Slim and MS show that Camera at E3 Is it MS Fail?

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Comparing the camera that is likely that MS is going to be using to the Eye Toy is like comparing the old Nokia ATT phones from 99 that ran off of CDMA with a Windows Mobile 7 phone(or an iPhone)... it's just not comparible... they both make calls, but that's about where the comparisons end.