After years of arguing whose video game machine has the best bells and whistles, Sony Corp. and Microsoft Corp. agree the battle boils down to which has the best games.
Sony is scheduled to hold a media briefing on Wednesday morning expected to focus on new games for its PS3 game machine.
Tonight, we let the games talk, Peter Moore, Microsoft's vice president of interactive entertainment, said Tuesday night, at the end of an event tied to the E3 video game show, the industry's most important event, which officially kicks off on Wednesday.
About a year and a half after Microsoft introduced its 360 machine, developers are only starting to regularly roll out franchise titles that can make a game system a must-have. Some games are exclusive to one machine, while others are cross platform.
Sony cut the price tag for its PS3 by 17 percent on Monday, which leaves the two machines comparably priced -- and Microsoft has said it will not drop its own price.
The PS3's new price tag of $500 is just $20 more than the most expensive Xbox, the elite model with a 120-gigabyte hard drive.
When Sony announced a year ago the $600 price for the PS3, gamers howled.
The cost and lack of must-have games has kept many consumers away from the PS3 despite Sony's insistence that the price was reasonable, considering the machine has supercomputer processor, a 60-gigabyte hard drive, and a Blu-ray high-definition DVD player.
With one of the fastest price cuts in video game history, Sony admitted its bet on the high-definition DVD and extra features has not paid off.
Still, killer games could make it a formidable antagonist for Microsoft.
If all we had was a price move, then we should have held that until our E3 press conference, Jack Tretton, head of Sony Computer Entertainment America, told Reuters last week. But really, we've gotten that out front, and while we think it's substantial, we think the real news is the games.
Although it was the dominant player in the previous generation console battle, Sony trailed Microsoft coming to market and in sales this round.
Microsoft said it had shipped 11.6 million consoles worldwide by the end of June, missing its target of 12 million.
In the United States, Microsoft has sold about 5.6 million consoles, compared with 2.8 million for Nintendo Co. Ltd.'s (7974.OS: Quote, Profile, Research) Wii, and 1.4 million for the PS3, according to data from NPD, a market data firm.
Microsoft's highly anticipated games -- Halo 3, Grand Theft Auto IV from Take-Two Interactive Software Inc. and Madden 08 football from Electronic Arts Inc. -- are all due out this year for the Xbox 360.
Games cost as much as $20 million to develop, and many publishers wait for machine sales to ramp up in order to insure they have a critical mass of buyers.
All the positioning over price may be moot until the consoles fall to $200 or so. That's the magic point at which past console sales have exploded beyond the hard-core gamers into the mass market.
Where these boxes get interesting is, 80 percent of all consoles sold are $199 or cheaper. Consumers aren't going get interested until they get to $199, Wedbush Morgan analyst Michael Pachter told Reuters last week.
(Additional reporting by Kiyoshi Takenaka and Kemp Powers, editing by Jeffrey Benkoe)