A massive 188-page report from Wedbush Morgan Securities analysts Michael Pachter and Edward Woo details why they think the Xbox 360 will retain its first-mover advantage -- for two years, anyway -- and how Sony is more interested in the HD format wars than the console battle.
WMS says that the primary driver of next generation hardware sales will no longer be the amount or quality of videogame titles per console, but rather consumers' willingness to adopt new high definition DVD formats.
If this theory proves true, the next console cycle wouldn't be the first time video playback capabilities played a factor in console sales. The PS2 served many as a cheap DVD player in the console's early days, although the launch of DVD happened 3 1/2 years before the PS2 launch. The PS3 and its high-def format are launching closer together (after what Pachter implies was a well-planned console "delay"), indicating that Sony is targeting movie fanatics with its Blu-ray enabled console that just happens to play really nice-looking videogames.
News source: NEXT Generation