Microsoft is not innovating. They've taken a lot of games from Sony and a lot of ideas from Nintendo. As the recent arstechnica article linked to at the bottom of this page mentions, people at E3 were laughing at Microsoft during their presentation because of how obvious a rip off their new avatar system is. Microsoft was the first to bring online to consoles, but it offers only a subset of the functionality of computers, is technically inferior (few or no dedicated servers), and costs a monthly fee which automatically precludes a large set of people from ever using it, and its a nusance for others.

Microsoft is innovating in the field of Online, and what it offers. It has been the litmus test for proper online capabilities since Sega gave up their online aspirations with the death of the dreamcast. Sony and Nintendo have been playing catchup to Microsoft's system. Sony is developing trophies to counteract Microsoft's popular Gamercard/Achievement system, and Nintendo is trying to cash in on Live's digital download service that has been around for quite some time. Microsoft has made their mark in their online delivery system. With the Netflix deal looming in the near future, they are progressing even farther into the field of being in a league of their own - 150 games with many being unique, a great marketshare, and momentum in the DD field.

Are avatars a rip off? Yes. But Mii's are a ripoff (or should I say, furthering) of the Gamercard system that Microsoft developed. You can compare it to PC's all you want, which is better, but if we're talking the merits of online console capability, there isn't any comparison, and Microsoft continues to push their system. Heck, Nintendo is JUST beginning to use speakers for online games with WiiSpeak, while MS intergrated headsets years ago.

The most glaring facet of Microsoft's inability to innovate is their game strategy. Microsoft brough online first person shooters from PCs to consoles. As far as online gaming is concerned, Halo 2/3 are slightly watered down versions of first person shooter action on computers -- these games are fine games, don't get me wrong, but there is absolutely nothing new here. It's just a carbon copy of online PC FPS games adapted for consoles.

And what new is Sony giving us? Microsoft isn't fielding the first party studios like Sony or Nintendo is. And I agree fully that this is hurting innovation. However, Turn 10, Bizzarre, Bungie, Lionhead and Rare are putting out have been pretty good - not as large as the cataloge of Sony, but equal or exceeding in quality. Neither has anything near Nintendo though. Your In the Movies and Lips seem to be very good innovative additions to their casual branch. And say what you will, Microsoft is the soul innovator in terms of Digital Distribution. No service has anywhere near the length or breadth of Xbox Live Arcade's unique IPs. This month alone, Xbox 360 Live gamers have received Braid, Geometry Wars, Bionic Commando, Galga Legions and Castle Crashers. What exactly did PSN or WiiWare get this month?

Microsoft has managed to get most of Sony's great exclusives, but they've failed to develop anything interesting first party. They bought Rare, who has managed only one very good release for the system so far: Viva Pinata. This leaves Microsoft's strategy look a lot more like slash-and-run than bring innovation to the console market.

Don't forget Kameo :)

And if you look at this generation, Microsoft has been doing a stellar job at destroying the Shooterbox definition the Xbox was known for. Microsoft's 360 has the most robust cataloge of RPGs, Sports, FPS, and RTS games of any console. This if a far cry from what they did just 4 years ago. You can argue their lack of first party titles, but you cannot deny they've done a spectacular job of not only stealing Sony exclusives, but ensuring that every 3rd party game comes out on their system - something that neither Nintendo or Sony bother with.

In 2008, sales have taken a turn for the worse when compared to the PS3. Microsoft has had their biggest release of the year with GTA 4. Sales are a little up year over year, but not nearly as much as the PS3. And not nearly as much as the Wii either. In Europe, the 360 is floundering despite its already bargan basement price tag. The same goes for Japan.

How have X360's sales taken a turn for the worse? They are up 57% from last year in the same period of time. Lets look at actual numbers, which is something you didn't do:

I will admit they are indeed in last place in terms of 08 cume, but it's not like this 3rd place has been due to them floundering versus last year. Their sales increase is higher than the Wii's for the same period of time, and the PS3 was beginning to tank at this point last year. Oh, and this proves the X360 has had a better increase than the Wii. What else are you not bothering to look at before you began this disseration about the X360's woes?

There is little question that the Xbox 360 in 2008 is in a weaker position relative to the PS3 than the Xbox 360 at the same time in 2007 was. In this market, innovation is everything. Nintendo has done a lot with the Wii since launch, and now that Sony is really getting established they have a variety of good innovations on the way. And yet we see little in the way of innovation from Microsoft. It looks like they're going to give up their world wide installed base lead over the PS3 up without a fight, and if things continue to deteriorate for Microsoft they may even lose their US installed base.

Not really. Having a 57% YOY increase this year proves that if Microsoft gives a rats behind about the sales race, they can do what's needed. The X360 still hasn't had a real price drop in their biggest market yet. Sony has very little blockbusters over the next year (save FFXIII in Japan if it launches in 12 months) that can aquadately beat the X360's lineup. Is the PS3 in a better position this year? Yes. Is the Wii? Yes. Is the X360? Yes. They've all done well. But Sony's improvement isn't because it's doing something amazing. It's because they tanked last year beyond all measure, and have made a few smart improvements to help their situation. And we've seen last week, even in Japan, that no area is sacred from the MS 3rd party machine. Having to stave off your competitor that last gen, sold 500,000 hardware units to your 22,000,000+ has to be bad for Sony, and there's no way you can spin that. The X360 still has a 5,500,000 unit lead, and that's a very hard thing to argue.

And it's not like the Playstation 3 has the brand recognition of the 3DO. This is the Playstation brand name we're talking about. 130 million units sold last gen, remember? Brand name isn't the be-all end-all, but it does play a part of having a hardcore fanbase that is willing to blindly purchase a system despite atrocious decisions by the manufacturer. Sega Saturn, N64, and the Gamecube all similar failures in design, yet sold better than they should of thanks to being backed by Sega, and Nintendo. Had the Xbox 360 had the same design of the PS3, but the MS name (and vice versa), the 360 would have easily been the worst failure in gaming history.