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For this year’s E3, there is really only one company that everyone will be watching: the defending console champ, enduring and expensive (in terms of finances and reputation) release of their machine. Their launch has been exceedingly smooth, ignoring the long delays for worldwide release, but with the Xbox 360’s year-long head start and the Wii astounding worldwide success, Sony has been put between the proverbial rock and hard place. With the most to prove and the most to lose, everyone’s eyes will be on Sony.

This is one reason why Sony is poised to take back a large chunk of the hardcore crowd, and get some positive publicity filtering down to the casuals. Their console is poised to receive its first wave of triple-A titles from first- and third-party developers (Heavenly Sword, Lair, Uncharted: Drake’s Fortune, Little Big Planet, Uncharted: Drake’s Fortune, Ratchet and Clank Future, Warhawk) and the details being released about the second wave (Metal Gear Solid 4, Final Fantasy XIII, Killzone 2) have been gripping gamers on both sides of the 360/PS3 divide.

This also, of course, means that without a spectacular E3 showing, Sony will likely never recover their lost ground against the other consoles.

Jack Tretton, Kaz Harai, and Phil Harrison had plenty to talk about during their briefing.

A new, slimmer PSP was announced for release in September. It’ll come in one of two bundles, both for $199. New colors, new features, and faster hardware are being pushed into this newest form of the PSP: the PSP will be able to access the hard drive of PS3 and PC hard drives anywhere in the world, and will also have the ability to display output to a TV screen (the Sony Bravia was the only one mentioned, but I doubt it will be limited to just that). Nearly 80 first-party UMD titles are currently in development for the handheld.

Home continues to be on track for Fall release. The ability to launch directly into any game (from Blu ray or hard drive) has been added. Mobile phones are now part of the PSN, offering XMB and Home access for those away from their PS3. The indoor public space, seen in the GDC 2007 trailer, has been replaced by several outdoor spaces.

The PSN has 2 million users after seven months, who downloaded a total of 20 million items from the Store. While still a fledgling service, Sony is starting to show how they plan to use their online service to release games. Four titles (Warhawk, SOCOM, Wipeout HD, and Pain) will be released simultaneously both in retail stores and on the PSN, while Little Big Planet is rumored to be released in a similar fashion.

Along with a new SKU comes the inevitable $100 price drop, reducing the 60gb model to $499 and spiking sales worldwide in reaction (To bad that the 60gb model will no longer be produced). Games are what count, however, and without them, hardware sales will dwindle.

So what games does the PS3 have coming? Call of Duty 4: Modern Warfare, Assassin’s Creed, Kane & Lynch: Dead Men, Resident Evil 5, Burnout Paradise, Madden NFL ’08, Harry Potter and the Order of the Phoenix, The Simpson’s Game, Guitar Hero II: Legends of Rock, Medal of Honor Airborne, and Rock Band were all showcased in a montage. Hideo Kojima himself came to show off Metal Gear Solid 4: Guns of the Patriots (yes, it’s exclusive, stop asking), and a video from Insomniac Games showed more of their newest Ratchet and Clank title. Producer Eric Fong showed more footage of Folklore, the upcoming RPG/Action title recently released in Japan. Heavenly Sword was shown alongside a special Home space, and Little Big Planet showed more content generation. Let’s not forget Naught Dog’s Uncharted: Drake’s Fortune. Killzone 2 certainly stole the show, showing in-game graphics that, according to many that were there, already look better than Gears of War and reaching the level of detail found in the pre-rendered trailer.

None of those titles are surprises or new info, but Sony didn’t leave us wanting. Sucker Punch, developers of the Sly Cooper series, unveiled Infamous, a super-hero/anti-hero game. NCSoft has begun development of a series of MMORPGs for the PS3, in addition to the recent announcement of three in development from Sony Online Entertainment. A smaller, yet ultimately fascinating puzzle title Echo Chrome was demoed, touting simplistic graphics (think Game-and-Watch but full motion) and advanced design, for both PSP and PS3. Even the hallowed Gran Turismo featured with some official news, though not unexpected: Gran Turismo Prelude will be available for download on the PSN, featuring online play and graphics improving upon the already-gorgeous Gran Turismo HD. What about Unreal Tournament 2k7? It has an official November release date, and at least for the holiday season, it will be PS3-exclusive (ignoring the inevitable PC release), and in even better news for PS3 owners, level mods will be playable on the console version.

Sony told us exactly what it was offering consumers this holiday season (120 PS3 titles, a constantly-improving online package, a significant drop in price) and since release, it has been these three things that have been holding it back (aside from the PS2). E3 has been nothing but good news for the shiny black box, and with the proper maneuvering; Sony can ride it all the way through December.

dont feel like readin this since im about to go to the store but.. if this article is talking about consoles sold then im sorry to bust his bubble but the wii will dominate and ps3 and 360 will be fighting for 2nd..(if the wii is supply constrained then it might be closer)

While I have no doubt PS3 sales will improve this holiday, that article really only says that they had a pretty good E3. 

"This is one reason why Sony is poised to take back a large chunk of the hardcore crowd, and get some positive publicity filtering down to the casuals."

At that point I had to stop reading because such a foolish assumption strains creditability. From a historic perspective, $300 is a price early-adopters/core gamers pay for a videogame system and below $200 is where the casual market lives ... It doesn't matter how much "Positive Publicity" the PS3 gets it is a hard-sell to the core gamer and most casual gamers would laugh at the suggestion that they should buy a $500 gaming system.

What in the world? I don't see any way possible that Sony could win this holiday season in any conceivable way. I think there is a definite possibility that Sony could gain ground in '08, but there is no way that they can compete with what Ninty and MS are bringing to the table this holiday.

Of the AAA titles he mentioned, most of them have a ton of potential, but none of them have proven track records. The only one they have is GTAIV and that is multiplatform.

The article also goes onto say that Sony needed to have a fantastic E3 to gain any ground and the general consensus is that they had an OK one, but nowhere near fantastic, especially because they are only lowering the price to sell out stock.

I think the article does a decent job of showing why Sony will not be a complete failure this holiday, but without bringing up the strength of Nintendo or MS and comparing, the article is baseless. Really, Sony has conceded holiday '07 and will have to try for next year. All they can hope for this year is to sell enough to stay in the mix.

Is this intended for a worldwide win or an American win?

This holiday season I'm only sure of three things worldwide:

- Japan is Nintendo's bitch right now (Dragon Quest IX has yet to come for the DS!).  Considering the strength of PSP and Wii, I expect PS3 to come in 4th (for hardware-sales) over the holidays in Japan.  With low hardware sales, don't expect big software sales no matter how good the games are.

- Microsoft's marquee game is coming to the USA in September (Halo 3), followed by the most significant 3rd party sequel in October (GTA IV).  Sony has GTAIV, but with Metal Gear Solid 4 delayed not out until 2008 what will match Halo 3?  Killzone 2?  To beat Halo 3 at the PS3 price point I would say it has to be better than Halo 3 - alot better - even if it is, the hype of Halo 3 is unlikely to be matched by Killzone 2.

- Sony is no longer the defending champ either.  Last holiday season Sony was outsold by both Microsoft and Nintendo worldwide.

There is no doubt in my mind that PS3 will have a better holiday season than last year (by virtue of European sales, and general availability alone), but I suspect it will be comparable in terms of numbers to Gamecube/Xbox worldwide holiday sales in 2002 or 2003.

2008-2010 will be better for PS3 when the sales are no longer are blocked by the $600 stigma.

Killzone 2 is not coming till 08 so it won't be competing with Halo 3 which is better for that game and for Sony.

Edit: I don't expect the PS3 to outsell the Wii this holiday season, but I do see it beating the 360 worldwide for the holidays. 

I just don't see that happening, in fact unless Wii supply is really low I don't see it losing this holiday

Wasn't the PS2 the highest selling console last Xmas? maybe not, but I thought it was. Wii will definitely have the most consoles sold this season, but I think the PS3 will beat the 360. Time will tell.

 That's what I thought...