Microsoft / Xbox 360

Gears of War

With a full year head-start (although a tight launch), the 360 has been in plentiful supply for most of 2006. It currently sells for $299 for the gimped sans-hard drive version and $399 for the proper 20gb HD version.

MS has a huge hit on their hands with Epic's Gears of War, which is the first game to knock Halo 2 from the top of the Xbox Live Most Played list (no small feat). That fact that Halo 2 (an orginal Xbox title) was until this week the most played game on Xbox Live speaks to a lack of a killer app for the 360, for all the time it has been out. Gears of War (GoW) is an impressive, truly next-gen gaming experience, to be sure. I loved the campaign, and the multiplayer is tons of fun. Call of Duty 2 and Ghost Recon: Advanced Warfighter (also excellent) were the only other titles to really come close to GoW's success till now. I would have hoped that there would have been more must-have titles on shelves by now, but there are some hugely anticipated titles coming down there wire. Among them are Capcom's surprisingly slick Lost Planet, Bioware's Mass Effect, Rockstar's GTA4 and of course MS's own Halo 3 which will likely land November 2007.

Recent breakdowns of the latest component prices, put MS actually making money on each console sold, which bucks the current trend in video game economics.

Xbox Live continues to be refined and expanded, with the recently announced HD movie rental downloads, and other video content for sale. Xbox Live Arcade has had several hits on their hands, and MS has been experimenting and tweaking the pricing for small game purchases and microtransactions over the year. They have a very solid platform in place, and have rolled out six major revisions to the network in its 4 year lifespan. It will be hard for the other consoles to just catch up with what MS has put together here.

Sony / PS3

Resistance: Fall of Man

The PS3 is out, though in extremely limited numbers. Fetching upwards of $2,500 per console on eBay, it's probably going to be March or so before you will be able to walk into a store and drop $599 on the full 60gb PS3 ($499 for the 20GB version).

Sony will sell tons of these no doubt, and the number one position is theirs to lose. The challenge for them is that since the last generation (Xbox/PS2/Gamecube), the game software market has changed. Sony used to have exclusive platform-selling franchises that fueled their brand loyalty (think Grand Theft Auto, Metal Gear, etc). But by the end of the last cycle, game developers were making version of their games for all the consoles, and started to move away from the exclusivity deals of the past. MS announced that Grand Theft Auto 4 is going to land on the 360 next fall, (likely on the PS3 as well at the same time) with exclusive episodic content via Xbox Live. Ubisoft's much anticipated Assasin's Creed will be hitting both the PS3 and the 360. Personally, the only titles I'd be pining for is whatever comes next from the minds behind Shadow of the Colossus and Ico. Those were some of the best titles on the platform (with Katamari Damacy a close second).

Their online network does not charge you to play online, which a nice contrast to Xbox Live, but the proof will be in the pudding as to whether the network will be free of cheats and exploits.

Sony is reportedly losing up to $250 per console sold at launch, due to the high cost of the new BluRay high-def DVD player and the Cell processor. This is no small point. Sony has had a devastating year with an expensive laptop battery recall, and the delay of the PS3 launch is going to hurt them a lot, as they wont feel the full benefit of the holiday season with so few consoles in the pipeline. If BluRay flops, or any other nasty surprises hit Sony, it could get very, very ugly.

As for the reaction to Sony's launch titles, Resistance: Fall of Man has been getting good reviews, but people cant help but saying that it doesn't look quite as nice as Gears of War. Of course, the games coming out this time next year will surely improve in quality, but right now, there is no "must have" system seller that will make people NEED a PS3.

Regarding the BluRay (or HD-DVD for that matter), I think Sony and the other electronics manufacturers are in for an unpleasant surprise when it comes to their next gen DVD formats. As more ways become available to download HD content (satellite, cable, internet) and with HD DVR's out there already, the prospect of shelling out for an expensive new player, and new discs to buy becomes far less attractive. Sure it's nice that the PS3 comes with a BluRay player, but does that translate into Sony dominating a new format for the next 10 years? Hardly, and I think when you consider that regular DVD's look pretty damn nice on most HD sets under 50", I 'll be t that people are in no rush to upgrade their DVD libraries.

Ninendo / Wii

Legend of Zelda: Twilight Princess

Nintendo is definitely in a better place this time around with their innovative $249 Wii console. It truly offers an alternative path forward in what the gaming experience can be like. I can't wait to get my hands one and try out the feel of the controller. I'm sure plenty of coolness will come out on the Wii during it's lifespan, though I don't seeing it as being at the forefront of the battle. It will certainly eat into some of Sony's share, as you can pick up a Wii, and a 360 for less than the cost of a full PS3. Parents aren't gonna be plopping down $600 so easily, and kids will have a better chance of getting a Wii for Christmas, as they will be in good supply right from launch. Also worth noting is how Nintendo's DS TROUNCED Sony's PSP in the handheld market and outsells it by 3 to 1 according to NPD's September sales stats. Nintendo also probably has the best chance at growing their potential market past the regular gamers, and out into the rest of the general public.

In Conclusion

All in all, it's going to be a fascinating year watching these juggernauts duke it out. The best part of all this of course, is that the gaming consumer wins. Things to watch over the next year:

-How does the Sony online network hold up to cheats / hacks?
MS has spent a ton of time working on this, and I am doubtful Sony will be able to build as robust a network as MS has done. If the network can't deliver, game over. Online gaming is a MUST HAVE component that is useless when spoiled by cheaters.

- Will MS's HD video marketplace on Xbox Live take off? What will the pricing be?
If they hit a fair price (unlikely) they may have a killer feature that trumps the BluRay / HD-DVD.

- Will MS's XNA homebrew gaming kit yield any interesting indie games that take off?
If MS is able to tap into a pool of new innovative ideas from a new indie gaming community for deployment (and cash) on Xbox Live, they could really shift the direction of things to come...

- Will Nintendo's Wii controller be truly embraced by the major developers?
I fear that the major developers are going to just release ports on the Wii, with one or two things unique to the controller, as we're seeing in some of the announced titles so far. I hope people make games JUST for the Wii, that really make the controller worth it.

I 'll give an update in a few months to see where things stand.