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Videogames are part of the media industry, and the thing is, both Sony and Nintendo both know what it takes to succeed as next-gen media companies. Both are pursuing very savvy media strategies -- Sony an integrated strategy (a game-player as media device), and Nintendo a targeted strategy (a pure game machine). Both are succeeding. BluRay is taking off, Sony's hardware is selling, the PS3 is matching the 360 even before the great games arrive, etc. etc. etc.

Microsoft's biggest enemy is itself - it's not a media company, has a miserable track record in markets where it can't use its OS monopoly to club its competitors to death, and saddled the 360 - a fine gaming platform - with numerous management mistakes.