PS3 vs Xbox

PS3 sales in the US declined in November, according to figures released by the NPD Group: Sony sold 378,000 consoles last month compared with 466,000 in November last year. In contrast, sales of Microsoft's Xbox 360 went up to 836,000 from 770,000. Nintendo outsold both by a wide margin - just over 2m Wiis sold, up from 1.35m a year earlier. The figures must concern Sony, though there are variations in market share around the world. Nintendo seems to be winning everywhere, but the PS3 is way ahead of the 360 in Japan, and also easily outsells Microsoft in countries such as Spain, Portugal and Italy, according to Ed Barton, games analyst at UK-based Screen Digest.

Sony's big problem is price, especially in the present economic climate. In the USA, the PS3 costs $399, compared with $199 for the cheapest 360, the hard-drive-less Arcade. In the UK, the 360 Arcade is £129.99 and has gone for as little as £99.99 at retailers such as Zavvi, while a PS3 costs from £280. The PS3's unique selling point, the Blu-ray drive for high-definition (HD) films, looks less compelling now that cheaper standalone players have emerged, and customers are reluctant to shell out for suitably large HD screens that they need to enjoy the full benefit. Microsoft cut 360 prices aggressively in September, but Sony did not follow its lead, telling analysts that it is putting profitability ahead of market share.

The 360's lead in North America will be difficult to overcome, but Barton thinks 2009 will be much better for Sony worldwide: he argues that Microsoft's deep price cuts for the 360 will be hard to repeat, that Sony has strong PS3-exclusive games in preparation, and that the PS3's strength as an HD source will help it in the long term. He is predicting a 60% increase in the PS3's worldwide sales next year, to 16m, more than double his projected Xbox sales of just under 8m units. Few would be surprised if Sony dropped PS3 prices next year, and there is scope for a cheaper version of the console.

The PS3 will probably always be more expensive than the 360, but it is worth looking beyond the headline price. The 360 you really want is not the low-end Arcade edition, but the Premium, which has a hard drive. If you then add the cost of a wireless network adapter and a rechargeable battery for the controller - both of which are standard in the PS3 - the price difference reduces. Bottom line: the console wars are not over yet. What is certain, though, is that Sony has lost the dominance of the market. It is also remarkable that Microsoft has been forced to undercut the Wii (around £180), yet still sells fewer units despite superior graphic capabilities. Microsoft has always argued that software matters more than hardware; ironically, it is Nintendo that demonstrates the truth of that point.($199) is closer to that of Sony's 8-year-old relic than its current-gen upstart.