Uphill Struggle

Herein lies the rub, in two key ways. Firstly, Sony's superior hardware (and I say that purely in the sense of its reliability and build quality - arguments over its actual power are really not of interest to the majority of consumers) seems to make the PS3 into a much more expensive system to build than its rival. You can buy an Xbox 360 now for less than a Wii, while the PS3's price point remains stratospheric, a factor which is hurting the company more and more as the recession bites and its rivals drop prices.

Secondly, Microsoft's superior software and services influence both buying decisions and attach rates. The focus on online is still one that's less important than its advocates would claim, but this generation is the transition - it's the last generation of hardware in which any significant percentage of consoles will not be online, and already the figures are at a tipping point. Xbox Live, as a result, drives sales in a way which Sony's badly presented and altogether weaker service does not, because existing Xbox owners convince their friends to join them on the online service.

Moreover, Xbox Live drives sales of games and content in a way which Sony's system does not. The large Xbox Live community and the use of systems like Gamerpoints make owners of both systems (an appreciable number of innovators, early adopters and early majority consumers alike) more likely to pick up the 360 versions of multi-platform games, a view generally supported by the attach rates of both machines. In addition, Xbox Live (especially NXE) drives information and buying opportunities to consumers through an attractive, graphical interface. Sony's equivalent? A slightly pathetic RSS feed which scrolls in the corner of the screen.

Most of these disparities between the systems have existed from day one, but in the wake of 2008, they have become even more pronounced. The launch of NXE, while not exactly the massive event which Microsoft proclaimed it to be, does put even more open water between the Xbox 360's software and services and their equivalents on PS3. Meanwhile, more and more consoles are getting connected to broadband networks, and there's a valid argument which says that critical mass of connected gamers will snowball into domination for one system or the other - you could call it the World of Warcraft argument, perhaps, since that's almost exactly what has happened in the MMO space.

One other issue, however, is worthy of consideration - and this, arguably, is the most surprising failure on Sony's part of the past 12 months. For all that Sony has made mistakes in the past, it has always been extremely strong on the marketing front. However, in the latter part of 2008, it was Microsoft's marketing messages which dominated the airwaves.

In the UK, at least, the Xbox and its games seemed to be advertised in almost every ad break on prime-time television - with a canny and well-considered series of ads pushing home the message that the console has a wide variety of entertainment for all the family, and that it's cheaper than its rivals. It didn't help Microsoft to close the gap with Nintendo, admittedly, but it handily outsold the PS3 in the UK in 2008 - a significant victory given the region's strong affinity for the PlayStation brand. Where was Sony's marketing, during all of this? It was there, certainly, but it was surprisingly low-profile compared to Microsoft's push. Perhaps Microsoft plans to spend Sony out of the territory - and no matter how cynical you are about the power of marketing, the fact remains that with enough time and money, they probably can.

This race, however, isn't over yet. Perhaps more importantly, this race may not be the one that matters, since the Wii has effectively nixed the chances of either PS3 or 360 ever emulating the success of the PS2. The rest of this generation remains for Sony to get its act together, to learn how to be an effective, integrated software and services company as well as a hardware company that can produce systems which hit a market-friendly price point, rather than being excellent but unaffordable.

For 2009, nobody is predicting - no matter how cautiously - that it might be Sony's year, but that doesn't mean that the company can't or shouldn't be lifting its game with the PS3. After getting so much wrong in this generation, Sony needs to overhaul how it thinks about the market, how it approaches the market - and perhaps even who's in charge of its whole approach to the gaming space. Unless it can do that and start to pull the PS3 operation around, it'll be too late by the time new hardware appears and the whole merry-go-round starts again in a few years' time.