Onimusha,
I totally agree with your position on Nintendo. I hope you didn't refer to me when you said some people want to make Sony look better by talking down Microsoft or vice versa. Sony's problem is entirely by its own making. I don't know if it was more Kutaragi's or Microsoft's influence, but it was Sony who decided to launch an over-engineered console at twice the launch price of its predecessor. Had the PS3 launched with half the power and features at $299 Sony would still be the market leader today.
The question who is worse off is really hard to decide, first since Sony is a hardware company and Microsoft is a software company, and second because Sony is beaten by the competition (Nintendo) now but has won competitions in video gaming and other markets many times before -- while Microsoft is still firmly holding onto one of the most profitable monopolies in history (Windows+Office+Server) but inspite of all its money has never ever won in an open market competition. I think despite Microsoft being in a better financial position Sony will show more business acumen and endurance.
Hardcore gaming is a bubble economy blown up by Microsoft's $7 $6 billion losses.
