here's why: 1.) sony is still pursuing over-ambitious ideas for the PS3, as they did with the "emotion engine" on the PS2, which used a proprietary CPU and VPU that shared the same RAM. This time, they are trying to implement distributed computing! We all know this will fall flat on its butt, yet they were echoing this statement even at E3 2004. This will either result in delays or a dumbed down version of the specs they wanted. 2.) The over-ambitious hardware design will be so hard to program for, all the first games will be flops. 3.) Microsoft has finally won over Japanese software developers with X-Box 1. Their hardware unit sales are now beating PS2, and their hardware is clearly superior and easier to program for. They will have strong clout with developers once they begin showing off the X-Box2 dev units. 4.) Microsoft is once again using a PC based architecture, although this time opting for dual cores, but still with a prototypical VPU by ATi, which will either be utilitizing the current R420 (X800) or upcoming R430 graphics core. This recognizable hardware configuration will allow for the maximum number of games to be developed in the shortest amount of time, including numerous PC crossovers such as KOTOR that the PS3 will not share. 5.) Microsoft has the edge in online experience. They are now the leader for online console gaming, and they have the edge in software programming and support over Sony. They have even garnered the exclusive online support of EA and Capcom. the first is tops with Americans, the second vital to Japanese. 6.) Sony will have scant few, if any, killer exclusive licenses such as Metal Gear, Grand Theft Auto, or Final Fantasy anymore. Square and Konami are already in talks with X-Box, and Take two interactive will most likely pick the hardware with the higher installed base, which leads to point 7: 7.) X-Box looks set to launch first. The only reason PS2 led the last generation was b/c they launched first by a mile. The quality of software has been mostly mediocre, with VERY few standouts: FFX, MGS 2, and GTA3 / VC, which as I said above, will likely be X-Box 2 exclusives. 8.) BTW, that E3 2004 showed the state of Sony's games division, which, much like the rest of their company, has stagnated, but even more so. There was not one "ooh aahh" title to be shown. Their sales figures were not high, their online support is near to non-existent even 4 years after release, and the one exclusive they were able to show is drawing resigned sighs from most critics: MGS3. Microsoft, on the other hand, had one of the most memorable conferences of recent memory, woith the most anticipated game of the year, Halo 2, and lots of other multiplayer titles and innovative online software. And let's face it, when ppl play console games today, theya re playing X-Box. It's sports games look better, and HALO is the competition game of choice other than Madden. The brand affinity is growing by leaps and bounds. Need I say more? Now, if X-Box 2 is late to market, which I doubt, and if Sony somehow manages to keep their exclusives, this will be a closer race, but not by much. their few exclusives this generation were MGS 3 and FFX, which have lost a lot of clout with American gamers after the mediocre quality of those titles. I'd also like to add that I don't even own an X-Box, I bought a first-run PS2 b/c I bought Sony's hype. with the exception of GTA, the majority of their games were underwhelming. On the other hand, when i get calls to play console with friends, it's X-Box ONLY, and I cna't argue with the depth of their multiplayer titles.