Upon the official launch of Microsoft’s Xbox 360, which spent several years in the making, the hardware from Gates and company received plenty of consumer hype.  It was heralded by some as the big system watch in the upcoming next-generation console wars—a force with which to be reckoned.

However, the Playstation 3 has its fans that feel that they are experts in high-definition technology, enjoy planning more games than the “other guy” and want to get the most for their money. Sony fans wanted to convince themselves that it was wise to wait for the PS3 (Playstation 3).

360's launch lineup was impressive; there are 18 games and five first-person shooters. It can even be argued that the 360's overall average quality of titles is greater than that of any previous system. And yet not a single game is a Killer App? Where's the Halo? Where's the Mario? Where's the unbridled interest?

It’s a fact that PS2 launched with an unimpressive collection of games and PS 1 featured a similarly undistinguished lineup.  With the advent of PS3, however, Microsoft may have wished it more heavily accentuated one game its new console could always be known for.  PS3 has plenty to brag about with the Metal Gear potential, Warhawk, Tekken, I-8, Gran Turismo, Killzone and a dozen other high profile games that are already hits with PlayStation fans. 

Business Week magazine compiled a report that estimates the total cost of components in the “premium” bundle of the Xbox 360 system sold at $525 USD, sans manufacturing costs, meaning that Microsoft is losing money on every Xbox 360 system sold.  In the console game industry, the strategy of selling a console at a loss or near-less is common.  Console makers can usually expect to make up the loss through game licensing.

Microsoft was never able to reduce Xbox manufacturing costs below the break-even point.  Their home division, as a result, posted a loss through nearly every quarter of the console’s lifecycle.  Microsoft is predicting that with the Xbox 360, a greater market share and falling hardware costs will eventually make system sales profitable.

Meanwhile, Microsoft’s competitor, Sony confirmed a unified online service at the 2006 PlayStation Business Briefing meeting in Tokyo. The name of the service has been entitled "PlayStation Network Platform". Sony has confirmed that the service will be free and will have sufficient functionality for online gaming. The online service is being developed in cooperation by Sony Computer Entertainment and Sony Online Entertainment.

However, which the Microsoft Xbox already retails at just over $500, the Sony Playstation 3 is expected to retail for around $1000 upon launch. Added to this, Nintendo's Wii is expected to retail for around $200.

The disparity of pricing between game systems means that the home video games market is being stratified. No longer will it be a case of which system is best, as much as what price you are willing to pay for home entertainment from video games.