All of the different major companies in gaming have their strengths and weaknesses, and one strength that's definitely in Microsoft's corner is their ability to associate and negotiate it with outside companies: in the case of gaming, that means third party publishers. I think their strength in this area is virtually unparralleled.

There is no concrete proof to verify this, but there is so much anecdotal and partial evidence: the GTA IV situation, where they managed to not only secure a day-and-date simultaneous release, but also to secure exclusive content; the Guitar Hero and Madden ads, which prominently displayed the Xbox360 logo and managed to help secure the Xbox360 as THE Madden-system of choice for the generation; the system bundles with third party software such as Marvel: Ultimate Alliance, and even this recent public event in Japan:

 http://vgchartz.com/forum/thread.php?id=12233&start=0#end

Where Microsoft clearly teamed up with Namco to provide not only Viva Pinata mascots (which are first party) but Katamary mascots, as well (which are decidedly third party). The number of promotions and financial deals and marketing collaborations between Microsoft and third party publishers is unparalleled, and it has clearly had a beneficial effect on the system, which has seen extraordinary third party support. 

Any comments or criticism? Just as Nintendo has thrived off its strength in innovation, I think Microsoft's surge in popularity and support is a direct result of their extreme hard work in getting third parties aboard. 

Ironicly, this is almost exactly how the PS1 did so well in the first place. They secured Final Fantasy and Metal Gear Solid as exclusives and almost used them as mascots to the system both of which were given life from Nintendo. They also had other fantastic third party relations. I believe it was even Namco games that even brought attention to Playstation in the first place with games like Tekken and Ridge Racer. Strange to see Sony stray so far from their roots. Microsoft just took great notes on how the the Playstation became so popular and Sony strayed into becoming more like the original Xbox.

What do you think is Sony's strength, Bod?

I completely agree, Bod. To go along with that thought, notice how MS seems to be completely okay with letting their first and second party developers leave (Bungie and Bizarre) in favor of a publishing strategy (Gears of War, Mass Effect). It will be interesting to see if this strategy works for them or whether the loss of developers will bite them in the ass.

Either way, it shows just how confident MS is with their third party developer relationships. No way would they let Bungie and Bizarre go if they weren't confident in their ability to negotiate strong third party exclusives through advertising, publishing, and developer communication.

When is the last time you've heard a developer complain about MS or the 360? We hear it from Sony developers all the time but everyone seems to carry only praise about Microsoft's working relationship with developers. Microsoft must be doing something right.

That's a whole other thread (which I may make soon, but in general I think they have several, that have evolved over time. The two most prominent are:

1) Balance. They have good third party relations, good first party support, good innovation (yes, they have innovated, for those who'd like to argue otherwise).

2) Integration: from things like Singstar (using their Sony music labels to pluck songs for these games. It's the reason there aren't any serious Singstar imitators: it seems like a genre that would be so easy to copy, but no one has easy access to the vast music library that Sony does), to DVD (yes, for those who don't know, Sony owns some patents on DVD too) to Blu Ray, and even to the fact that an HD console will automatically drive sales of Sony HD televisions, everything about their infrastructure is intregrated. Every PS3 sale is a Blu Ray player sale, a DVD player sale, a potential TV sale, and a chance for Sony to exercise their vast movie/music library, all in one.

I can go in to more detail, Grandmaster, but that's a starting place. I'll start another thread with this soon, since this thread is about Microsoft :p

You are my hero, Bod!

Can't wait for that.

Another very important point about MS's third party relations is their online strategy; they were and still are the pioneers of game demos and advertisements on Xbox live, and it's quite clear that they are able to push third party software at virtually no cost to themselves, by simply putting up demos. And, I'd argue, this has in turn greatly helped the 360 become the strong software seller it has become. 

They've essentially offered their third party partners free advertisements (demos) and an entirely new stream of revenue (microtransactions). 

I have to honestly say that MS does an execellent job especially when it comes down to negotiating. A small example is that they've already persuaded huge developers houses like Capcom to bring games like RE5 & DMC4 onto the 360. That was one heck of a deal from MS's side.

And making the Gears of War deal with Epic is another example to add.

They worked hard to get there and it looks its really paying off. Hopefully Sony realizes they've underestimated Microsoft's competence.

Also, its pretty obvious now that Sony have secured the other major franchises that were not yet decided to go over the 360.

I expect a "counter-attack" from Sony starting/during the first half year of 2008.

Its nice to see Microsoft step up the competition.

I wouldn't underestimate the amount of cash, that M$ uses to improve it's 3rd party relations, it's even commonly known, that they pay the advertisement of (some of) 360 exclusives. Well, anyway it's still a strength, but they are still trying to break in to market. Six months ago, it looked like they didn't have a clue what they are doing, but at the moment it looks like they actually have decent strategy. It's a whole different matter that will the strategy work and to what extent.

Money talks and MS has a ton of it. There are other factors involved but I think that is the dominate one.