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I think the biggest thing Sony could have done was lower the initial price. They dreamed big with PS2 compatibility and they built the thing with tons of unnecessary metal and other things. If the first PS3 had been a Slim (I know the ps3 has smaller die size on there chips now) costing $300 they would have crushed Microsoft. Secondly I would have timed it better, if they had been ready before/closer to Microsoft and some how had a decent lineup of games it would have helped a lot. But we all know the PS3 was rushed and many versions of it were scrapped before the first PS3 even hit the streets and there wasn't time for devs to get more games then they did on the new hardware. That's my opinion.