1. Sony may have sold their systems at an even bigger loss, but Microsoft knew the damaged they had caused the 360 when they rushed it out door to beat the PS3 by a year. I would say credibility hurt the 360 more than money.

2. RPG's would've been more significant if Japanese gamers could get their hands on a PS3 from the get-go. Sony made a huge mistake implementing Blu Ray because it decreased the spending opportunity of the Japanese customer. Some of the customers who were waiting for the PS3 to drop price bought the 360 for their JRPG's. I can tell you JRPG's are the sole reason the 360 will have a million console sold in Japan with huge defiance still from that region. JRPG's aren't dead...Sony just forgot that alot of their consumers are bargain buyers. The Wii was a hit in Japan not just because it was fun and family oriented (Which the Japanese love), but because it was launched at a great price.

3. Sony could've bought downloadable content, but they bullshitted themselves into making themselves feel like they were the honorable souls, when last gen they paid cash just like MS did. MS this gen copied the PS2's launch against the original Xbox. Do you want to know why Sony didn't make a system that last gens PS2 owners could easily convert to? Because they are greedy and only care about controlling or pushing favored formats into the mainstream. Microsoft could do this too, but they haven't because they don't need to. Digital downloads are the future to them. Sony wants to control everything like the hungry conglomerate that they are. Sony got what they deserved because they forgot about gaming and thought of pushing a dead DVD format that no one wanted through the door by sacrificing the sales of their system which the people were so eagerly awaiting. You're saying "they could've done this".....well could've, would've, should've.

Lol. MS didn't defeat Sony. Nintendo and Sony defeated Sony. MS have extended the gaming niche they started with Xbox, and have done so well. But if they had defeated Sony they would be sitting with the consoles sold Wii has (as in my book defeating is replacing the other company - which means becoming this gens PS2).

Sony decided to put BR in PS3, not MS, Sony decided to make a big jump in specs (perhaps with an eye on MS) not MS. All of these put far bigger dents in the PS3 than MS strategy.

Sony made big mistakes in judging the readiness for the market for a new format, misjudged the price point adoption and mis-judged the impact of high games costs on many developers.

MS really went for Sony, true, and mainly using a big wallet, but I really doubt the damage inflicted was more than a fraction of what Sony inflicted on itself.

Nintendo meanwhile played a blinder with Wii on specs, cost and innovation and swept easily into first place, becoming (for the moment anyway) this generations PS2, leaving MS fighting narrow margins to claw marketshare and keep PS3 from getting past them while failing in any way to dent Wii's progress.

And really, the 'denial of service' approach is as likely to lose them potential customers in Japan as it is to gain them, as the numbers clearly show a majority of local gamers aren't allowing MS to 'push' them to get a 360 to get their jRGPS.

As ever I wonder if you actually assimilated what I wrote rather just reading it - there's such a difference between the two.

1) I acknowledge MS hurt Sony but responding to the OP that they defeated Sony I argued against this. I believe firmly that Sony did more damage to themselves than MS by a large measure, and that Nintendo clearly did more damage. The best example I can give is go look at The Source's 100 week analysis and check out the chart showing marketshare change. MS shows a slow, steady build, Sony show's a huge drop matched almost exactly by a huge growth for Nintendo - i.e. Nintendo took Sony marketshare, not MS, and if anything MS efforts to hurt Sony aided Nintendo much more than MS. So I did acknowledge MS hurt Sony, it doesn't hurt me to say it, but it does seem to hurt you its not as much as you'd like to believe.

2) I clearly acknowledge MS success in growth in the face of tough competition, etc. But again I'm not going to suger the message that MS has so far expended huge amounts of money for a relatively small growth vs the success of the PS1/PS2 and that it has had to cut prices hugely and buy exclusives or exclusive DLC just to hold off a higher priced console with less games. That's also a fact you clearly don't want to acknowledge.

3) The simple fact is so far Nintendo is far and away this gen's big winner in every way, both financial and marketshare. MS is the middle guy, solid, but expending enormous energy for every modest gain. Sony is this gen's fall guy so far and the biggest news item in some ways - the market leader who fell from grace, the winner who's in last place, etc. I don't see how my pointing this out vs the OP's (incorrect in my view) asertion is anything but reasonable.

I don't see how stating Sony harmed themselves more than anyone else is praising Sony. I don't see how pointing out Nintendo is the clear winner is failing to acknowledge MS gains.  I don't see how pointing out MS has made very good gains but its costing them a lot of effort every inch of the way is being unfair to MS.

But then I'm not biased to any one company - and you obviously are.

Oh, and where did the left field 'Warranty/RROD' rant come from? I, rather graciously I thought, never even mentioned RROD or anything to do with reliability. I just mentioned that I think MS approach to Japan and buying favours is missjudged in the bigger picture. I could be wrong but it's my point of view. I don't see how RROD remotely relates to that topic.

Because a lot of diehard Sony fans just can't take seeing their favorite corporation (what a weird concept, I know!) do anything but outsell the combined competition by about 3 to 1. So they vacillate between rage, usually directed at Microsoft, and despair, feeling that it's inevitable that Microsoft will supplant Sony as the-console-manufacturer-who-is-not-Nintendo. The rest of us know that Sony isn't even on the brink, but these folks are so emotionally attached that they don't think, they feel. To them I say:

Cheer up, emu kid!

it's not over yet.

And I'd add, sorry if anybody else did, that:

4. MS didn't manage to kill Sony, anyhow. Sony is 3rd, but it's staying afloat quite easily, considering the crisis and the smaller cash compared to MS, and it's showing it can still be big in Japan, although not as big as before. So if the main MS goal was to simply STOP Sony's advance, particularly towards the living room computing market, it fully succeeded, nobody can deny it, but if the goal was to crush Sony and steal Japan, it utterly failed.

5. Of the huge research and economic effort put by MS into this, it wasn't MS itself to gather the fruits, but Nintendo. And next gen, if it wants, Nintendo could easily do what MS feared from Sony, but this time with much more ease thanks to lower costs of the components needed and knowing in advance what MS could do to counter it. MS knows it and it' scared, it's evident from how much it tries to blandish and flatter Nintendo in public statements.

EDIT: Sorry to remind MS fanboyz that Nintendo gathered the wins MS tried to sow: it was harsh, but necessary to prevent them from drowning in their wet dreams.

Sony really should cut their price though if they do want to stand any chance of a possible come-back. If it doesn't drop to 300 bucks by the time GT5 or GOWIII come out (whichever comes first) it'll suffer alot. If they had dropped the price last year right before christmas with the release of LBP and R2 bundles it might have followed the same massive curve the Ps2 had at the same time after it's launch.

You missed most points.

1) my point was that expressing in terms of "company X did well so it deserves its sales, even though this lesser issue exists" is unfit to an economic analysis. "Deserving" is a moral term, by which we think that somebody gained merit to a reward through his/her actions. In moral terms, we even go to the length of saying that someone might have a reward that he does not "deserve", or that he did not have a reward he might "deserve".

But in capitalistic economy you always get the sales that you deserve, because sales are the only measure of how good you did. That includes innovation, research, marketing, charity foundations,corruption and pointing guns at the head of clients. Moral has nothing to do with it, and we should try to not think about economy in the way we judge the actions of people.

2) Microsoft' OS and enterprise offering _is_ being threatened by alternative offers and the software as service /web applications trend. This has nothing to do with Sony... it has to do with Linux and Google. Still it means that they want to adapt to the new trends.

3) Microsoft and any technician who opened a faulty 360 _always knew_ the cause of the RROD. It's not like a long-standing misterious fault  nobody was able to find. It was about the cramped design causing the board to warp and the bad soldering to come loose. It was just more economically viable to extend then guarantee to three years for RROD and replace a lot of units than to redesign completely the hardware to fix it for good.

One has even to wonder if the 33% fault rate of the very first batch was not known _before_ the launch and the whole thing was just a calculated risk. Rushing to the market alot before Sony to gain mindshare against having to deal with faluty hardware six to twelve months later.

Lower heat-producing components were introduced in each iteration, but I still don't see links to statistics showing the fault rate for jasper.