And Santa Monica studios are involved in it too.

Yep...Sony started off slower than Microsoft because they focused on making their own games and outpaced Microsoft because Microsoft's development only focused on a handful of three or four core titles with one new IP that they kept going. (Fable, Forza, Gears, Halo &Crackdown) in a two year window. Sony re-entered with old and quite a few new titles. It will take time but they will do it again. Until then Microsoft will once more buy up the third party real estate to get peoples attentions focused on them. We all know how its going to go because Microsoft gameplan is no different. Buying Gears just brought them back to status quo level as the competitive console seeing that Epic wasn't so hot about making another Gears before their new IP. Microsoft just bought themselves back into the same position they were in 2006. They re-enter with an unearthed rare title and pay capcom for another exclusive Dead Rising game. They got EA to make sure Titanfall stayed exclusive after months of fans speculating about the multiplat status of Titanfall. Its looking exactly like the 360 era. Sony is looking more different than the PS3 era, so they are a bit harder to gauge. Their developmental game this generation is looking different compared to even last gen. I dont know yet whether to say its good or bad, but they just dont have Microsofts initial hype level. Microsoft knows how to get a party started and keep it going for a little while, but if you're not self sufficient (hence why they had to buy gears off of Epic) and it looks like their black tusk game was going nowhere we wont even be seeing that FPS for a while or even at all this gen.

Yep. Ready At Dawn has been making first party games for Sony for god knows how long. They've been making Sony's titles on the PSP, but they asked Sony for  shot at making their own new project and Sony granted it to them, especially with their track record. Sony is taking a great risk allowing them to roam on the PS4 instead of the Vita because the Vita could use some Ready at Dawn right now. You can tell they are ready to prove to Sony that they can be a  full-on first party company. If they succeed Sony will buy them for sure. Sony Santamonica is there as well with them.  If SSM was making another IP while helping them oh god help Microsoft in the next two to three years.

No. If the title is owned by Sony its first party. Publishing doesn't guarantee ownership, like what you saw with Gears of War being second party for Microsoft (until they bought the IP) or Alan Wake. Microsoft owns Quantum Break, not Alan Wake. Dead Rising 3 is second party. Microsoft publishes the first game just to keep it away from Sony. The next game will be on the PS4 just like the second was on the PS3. As I said they pay their weaknesses away. If MS focused on internal development it they would've been in a worse off position than Sony at launch. They had to pay outside developers for their stuff and even get third party to make their first party like Killer Instinct.

Sony put out allot of good games and one fantastic game last year where Microsoft did little to nothing.

I disagree with the OP. Sony spent the entire PS2 and PS3 generations acquiring and developing a very impressive set of 1st party studios, something I really wish Nintendo would do.

I will leave this link here for you to read:

http://uk.ign.com/articles/2013/06/24/20-games-12-new-franchises-coming-to-playstation-4-in-year-one

Sony are not cheap, they would just rather invest in their own studios and create new IP than buy old franchises.

He will never admit that Sony put out of a bunch of great first party last gen and had great second and third party exclusives to boot. 

True, but thats about being self sufficient development. Microsoft still to this day doesn't seem to be comfortable with their internal development prowess so they buy up third party real estate to cover up those weaknesses. It works in their favor greatly if you can overlook that they didn't create it. They publish games to keep them away from Sony as well. They published Mass Effect to keep it exclusive and the game still went to Sony. They published Dead Rising to keep it away from Sony and the next game went to Sony. They paid to keep Ninja Gaiden 2 away from Sony and Ninja Gaiden Sigma 2 came to Sony. Its how they work, but the respect Sony commands allows them to have all of those titles and Sony didn't have to pay a red cent for Ninja Gaiden Sigma 2 either.

I thought this thread was going to be about the PS4's low price and high demand. Sony could be making so much more money if the console were a little more expensive.