In 2008 the PS3 has outsold the Xbox 360 by nearly 1.3 million units. But this fight should not have gone this far. Microsoft made all the right moves except these 2:

Have the HDDVD drive built into the 360.

Pay Square SE for Exclusive rights to Final Fantasy 13.

While you can argue many things I believe that if Microsoft would have almost completely crushed Sony beyond repair with these 2 manuvers.

Why they didn't is beyond me.

Because if they included an HD DVD drive with the 360, it would have cost a bomb and failed completely.

A guy from Microsoft said they could have paid for FFXIII exclusive rights, but didn't want to. I don't know why.

To incorporate HDDVD into the xbox 360 microsoft would of had to push back the release date and lose the advantage of being the only console on the market. It would also have raised the price of the console and resulted in loss of appeal. There is also no way that microsoft could have paid for final fantasy 13 microsoft exclusivity seeing as that final fantasy is over a 20 billion dollar franchise on PS consoles. If it was possibe, they would already have done it; but they seem to be more interested in Star Ocean instead.

To tell ya the truth I don't think there is much they could have done. The main thing against them has been the lack of a worldly appeal of their brandname which is brought on partly by the original Xbox's lack of appeal to them and a negative perception of MS. I mean I really don't know how MS could have gotten rid of that, let alone now after RROD's and other failures are destroying the Xbox brand in America.

I guess the only thing MS could have done to help their position was really create a reliable and diverse console and made universal appeal a big part of their strategy, something similar to Nintendo. I think that's the only way.

The HD-DVD would have definatly helped.

I don't think MS would offer enough for square to down scale their game.

HD DVD would have prevented them from ever becomming profitable, jacked up the retail price, and pushed back the release date. Not the smartest move that Sony did. FF XIII would have helped them alot in Japan for sure. Halo 3 was bigger for them every where else. If they launched at $199, They could have killed Sony for sure.

Including HD-DVD in the XBox 360 would have raised the price of the system to $600 (or more) when the system launched and Microsoft couldn't sell more than 5 to (maybe) 10 Million systems with a system that launched at such an insane price ... Beyond that, Final Fantasy will face the same fate of Grand Theft Auto 4, Metal Gear Solid 4, Devil May Cry 4, and Halo 3 in that it will have solid sales but no real impact on hardware sales.

Had Microsoft actually followed Sony's standard strategy and released a moderately powerful system at an affordable price ($300) they would have seen similar but better sales initially, and when the PS3 was announced at $500/$600 they would have crushed Sony.

Wrong, on both accounts.

#1. If Microsoft chose to incorporate the failed HD-DVD drive into the 360, I really wonder what championing a failed drive would do. Without mass production of the drives by various 3rd parties, Microsoft & Co. would of had to bear the entire brunt of proper HD-DVD R&D and production. This could lead to higher costs for the 360 beyond what Microsoft already pays. Not only this, production of the said disks could also be a bit costlier due to the lack of producton outside of Microsoft's factories (could you imagine how difficult producing millions of HD-DVD disks in 1 or 2 factories for every 360 game would be?) I agree on the whole "oh, the 360 could of used a bigger storage medium than DVD-9", but HD-DVD, as well as BR-DVD was rather new when MS produced, and sold the 360. With the fail rates of the early 360s, one can only question how awful the HD-DVD drives would of been (and how expensive, too).

#2. Although FFXIII could invigorate sales in Japan for the 360, it's doubtful that it would of propelled hardware sales into some sort of new arena that Microsoft Japan could of capitalized on. Blue Dragon, Lost Odyssey, Ace Combat 6, Enchanted Arms, Eternal Sonata, Lost Planet, Ridge Racer 6, Dead or Alive 4 all were major games that X360 fans (even such as myself) touted would help the 360. Many of them, especially BD and DOA4 helped hardware sales, but never really kept a strong trend, save Blue Dragon. Even with the Playstation 3, we're seeing that major name-brand IPs are doing nothing for the PS3 in Japan. Metal Gear 4 hardware boosts, as astronomical as they were, collapsed and are back to near-normal levels. VF5, Gundam Mousou, HSG5, and others were the same way - despite selling 300,000-500,000 copies each, what did they accomplish?

No one title helped either system. Looking at Japan, the trends have been better when you have multiple, string-together titles, rather than piecemeal titles once in awhile. FFXIII could of provided the 360 a 200,000/wk boost in hardware, but guess what? It would of been for 1 week, and then it'd be back down to 5k/wk in a matter of a month or two. 1 specific game (sans Wii Sports) really can't make or break a system in 1 given territory - Halo 3, nor MGS, nor GTA have provided viable, real boosts in a given territory to show that 1 game would ever be worth it (although H3 was darn close).

Now, what MS should of done:

1) Announce a global, $100 price drop on all X360 SKUs in December 2007 to counteract PS3 pricedrop. Lets face it, the PS3 pricedrop helped, a lot. It's made the PS3 somewhat relevant in the US, and trend to relative strength in PAL territories. The MS price drop, as we've seen in Europe, has had very similar effects. What would of happened, however, if big games like Halo 3, Assassins Creed and Call of Duty 4 were new titles in those territories, rather than February releases? It wouldn't of killed the PS3, but it would of negated any advantage the PS3 would of had.

2) Launch new 1st party software initiatives. Not buying out studio X, but actually building them, from the ground up. Microsoft has the worst 1st party development of the big 3 companies - the Big N is leaps and bounds ahead of them, and Sony's is pretty decent as well. Microsoft has Rare, and Lionhead (as well as Turn 10, and a few others), and they've paid over $1b for all of them. But I think if Microsoft went out, and assembled a few new teams - like Feel Plus, and staffed development studios with around 1,000 developers/artists/ect, they could rival Sony in a matter of months. Software is where MS could make their killing, as we've seen with Halo. But aside from Forza, MS hasn't had a true 1st party game do gangbusters as of yet.

Microsoft could've done a lot of things.

* paying developers to NOT bring their games to PC, just xbox.... we are talking about Gears of War, Mass Effect....

* NO RROD - PR nightmare

* Free online service

All of them would help,