I was just thinking... With MS working on a new chip set out to launch this year and Sony having announced a 45nm Cell awhile back with intent of launching this year, the next few months should be interesting.

A few points:

1. Obviously, the PS3 is outselling the 360. Not by a large amount, but enough to make MS sit up and take notice.

2. MS is aggressively attacking Europe with mixed results. Price drops helped a bit and it will be interesting to see how the 199 Arcade Halo/PGR bundle will affect Euro sales.

3. MS is sitting on one $50 price cut in 30 months in America. Obviously, sales are starting to suffer a little because of this.

4. Sony aggressively cut PS3 prices to great success in 2007. Now, after the recent earnings release, their statement that they're looking for profitability in the games division leads one to believe that a PS3 price cut is coming late this year at the earliest.

5. MS posted a modest $90m profit last quarter while Sony posted a slightly less modest $180m loss. Both seem to be geared on pure profitability from this point forward (with MS, it seems that they've been in this mode since Halo 3 launch).

So, how is the rest of this year going to play out? Personally, I see MS attacking NA later this year with a significant price cut to stop the bleeding. They can't let their biggest market fade away to Sony. Sony, on the other hand, is slightly reeling after another loss and I don't think we'll see a price cut until later in the year when 45nm PS3s are on shelves in abundance. I think they're realizing that they've fallen into the same trap MS did and are losing too much early in the generation to ever recoup the money back out of the PS3 and turn an overall profit on the console.

Overall, I don't think MS is as far out of this as people make them out to be. A $249 or 279 Pro would really shake up the North American market while I think MS can only hope to hang with Sony in Europe, keeping it close but overall, losing the market in the long run.

Dunno. These last quarter's earning statements turned out to be more interesting than I thought. I was shocked that MS managed to cut the Euro price and still turn a profit while Sony sat still and turned another loss. It unquestionably puts to bed that rumor the Sony was breaking even on the 40GB PS3. It's obvious that they still have a ways to go because both the PS2 and PSP are still offsetting PS3 losses (and at that, still not making it into the black for the games division).

In final, it will be interesting to see which company can get their new chipset out first and get the prices cuts and huge profit this holiday season.

Although I think that price is still a very big issue for both the PS3 and XBox 360, I think their biggest risk for the future is that they can become more and more of niche products. What I mean is it seems like almost all games which have a creative and unique premise are being announced for the Wii (probably) due to the lower risk of developing a Wii game, while most of the PS3/XBox 360 games announced seem to be in the same genres and content styles of games that have already been successful for those systems.

Absolutely. I didn't bring up the Wii because frankly, it's so far past either console that MS and Sony almost have to take a "we'll get 'em next generation" attitude toward their consoles.

I'm not sure Sony and Ms need to worry about becoming a niche product. I see only some really big games going exclusive in the future for PS3 or 360. Most games will go the multiplatform route as a game developed for PS360 should have a wider audience than a Wii developed game. As far as uniqe ideas...Wii will always have that cornered but it will always play catch-up in the standard day to day gaming (shooters, sports, non arcade racing games...anything that requires use of more than 4 buttons)

I am worried about great games like No More Heroes going the wii route in the future. That game could have only benefited had it gone to ps360 instead(visually better, better combo system cause of more buttons, fixing the horrible camera due to wii's 1 analog stick) No more heroes gameplay doesn't really benefit from the wii mote (A, A, A, Slice...repeat).

It's interesting how IBM is competing with itself in this - do they have any incentive to switch to a 45nm process before the cost comes down? If they were competing, they would put the chip on 45nm to encourage more sales of the console they were supplying, but since they do both they won't act in favour of Microsoft or Sony.

Too bad that could of never been implemented because they barely had the budget to make a Wii game.

Also i disgagree. I actually found that slice at the end along with the special moves extremely satisfying... as well as the control in which way you hold your "sword".

Same with the way that Naruto game uses the wiimote in it's controls. It goes a long way for me atleast as far as imersion goes.

@Kasz216

Yeah, I agree slice was cool, but it got boring after about an hour . Pushing A over and over was not... Had that game not had that cool sense of style and its unique-ness...I don't think most people would give it a second glance as DMC4 really is much more engaging gameplay wise even taking the "slice" in to consideration.

Well that's all fine and dandy Kasz but until they really get a lock-down on 1-1 controls for the Wii I'm never going to feel immersed :/ ESP when the Wiimote doesn't recognize a movement >
If it wasn't for the budget I'd totally agree with Disolotudes statement, but with the way 3rd party software sells on the PS360, I see zero incentive to make a title on the Wii. Sure it cost's less and you don't need to sell as many copies, but once your groundwork engine is in place, your just minimizing exposure, Assassins creed could have been much cheaper to produce on the Wii, but it's chance for re-peat purchasers on a sequel is MASSIVE thanks to the insane sales on both the PS3 and 360, and since they have the groundwork done, it's looking to be pure profit on the sequel.

So until 3rd party software on the Wii starts to move higher volumes than the PS360, I don't think we have anything to worry about.

I will say Rocket, I might have to go with Sony on this one :P They've pulled some INSANE strings so far in terms of cutting costs xD And that PR statement about expecting profitability on the PS3 in 2009 probably still takes in account a price drop.

over the long haul I still say it's about software. over the next year and a half we will see MGS4, Socom, LBP, Resistance2, Motostorm2, Killzone, GT5, FinalFantasy, and god of War 3. We also know we will see many of these franchises make more than one game this generation over the years beyond. Price points are always important, but we also know that if MS drops their Price Sony won't hold off to long to follow up. Where Sony is loosing money in my estimation is because of low software numbers to date, and these big hitters should remedy that. If I was MS (and to some degree Nintendo) my one worrry would be that Sony has sold what it has sold to date with the thin lineup of software it has at the moment. As it stands right now MS and nintendo have fired all their big gun franchises out, and obviously we see the results, heck the Wii is doing amazing. Sony has sold nearly 13 million consoles and still have all these franchises yet to be released. I think its to early to speculate at this point.

Sony definitely has the advantage when it comes to hardware cost reduction... They've been doing it a lot longer and a lot better than MS.

On the other hand, both companies have put similar target dates on their chipset revisions IIRC. Given Sony's reliance on IBM for this reduction (just like MS), it will be interesting to see which hits shelves first.

As for profitability, MS is there already. They have the advantage of being already in the black going into July when the bigger games for both consoles should start appearing on a regular basis (other than the occasional release like GTA or MGS like we're getting now).

It will also be interesting to see if MS takes that time to attack NA for the Madden release. Most people outside the US don't understand how important it is in the US market to be "the Madden console". As it stands now, the 360 is shaping up nicely to fill that role for the next several years. But if MS sits around too long, they could easily start losing that market back to Sony.