Sony scores with new PS3

The electronics giant puts a supercomputer filled with fun and games into your living room.

By Peter Lewis, Fortune senior editor

(Fortune Magazine) -- Sony's New PlayStation 3 lives up to the hype.

Despite the delays, the shortages, the unprecedented high price - $599 for the premium 60-gigabyte model, assuming you can find one - and the small number of available high-definition games that take advantage of its powerful new Cell processor, the PS3 sets new standards not just for video game play but also for multimedia entertainment in the digital era.

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Nintendo's cheap thrill
It doesn't have a supercomputer engine, it can't play movies and its low-definition graphics will never win an award for cinematic realism. But the Nintendo Wii, the third-generation game console from the No. 3 player in the video game hardware business, is charming nonetheless.
Realizing that it could never match Sony's or Microsoft's consoles in technical or marketing muscle, Nintendo decided to make its oddly named Wii the game machine of choice for families and casual gamers. At $250, it costs less than half as much as the PS3.
That isn't to say that the Wii is not innovative. It comes with a motion-sensing controller that will have young couch potatoes up on their feet, swinging at virtual baseballs or slashing at trolls and cartoonlike monsters. (It will take a while for games to appear that exploit this feature.)
Nintendo's strength has always been fun G- or PG-rated software. The Wii is definitely a Wiinner.

It also reaffirms that Sony (Charts) is still at the top of its game when it comes to designing advanced technology in stylish packages. Sleek and gleaming black, it blends in with the most sophisticated of living-room home-theater systems, which sets it apart from the alien designs of its two main competitors, the Microsoft (Charts) Xbox 360 and the new Nintendo (Charts) Wii.

In the ongoing DVD format war, it also gives a huge boost to Sony's push to make the Blu-ray Disc the dominant standard for high-definition DVD players and movie titles (over rival HD-DVD), since the PS3 becomes, for now, the least expensive Blu-ray player on the market.

That said, the big questions - which third-generation video game console is best and which one will most delight you or your kids this holiday season - are still open to debate.

The Xbox 360 has a full year's headstart on the PS3 and Wii, which means it has more third-generation games available for it, and Microsoft has recently added new bells and whistles like an optional HD-DVD player and full-length movie and TV downloads in high-definition.

The Wii can't match the PS3 or the Xbox 360 in terms of realistic graphics or movie playback, but it is significantly cheaper ($250), has its own set of innovative technologies and will appeal to families whose idea of fun does not necessarily entail eviscerating alien monsters.

In terms of technical firepower, the PS3 and the Xbox 360 appear to be in a dead heat. The Xbox 360 excels at online game play and has millions of Xbox Live customers already. Sony's PS3 online game network had not yet been switched on at the time of this writing.

Technical propellerheads argue over which system, Sony's or Microsoft's, is the most advanced. In my view, Sony's Cell processor and its integrated Blu-ray DVD drive are superior to the Xbox 360's PowerPC chip and optional HD-DVD drive.

It will take software developers a long time to harness the full power of the Cell chip and the greater capacity of the Blu-ray Disc, so Sony's technical advantage over the Xbox 360 won't be apparent immediately.

Sony had claimed that the PS3 was backward-compatible with all games - some 16,000 in total - written for the previous PlayStation and PS2 game consoles. It turns out that not all older games will play properly on the new system, but most will.

Sony has endured what Elizabeth II once called an annus horribilis, a year of misery, what with exploding batteries, imploding profits and all the PS3-related delays, supply problems and griping over high prices. But Sony's engineers and designers have reason to be proud: The PS3 is well worth the money and well worth waiting for.

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