The current rivalry between the Xbox 360 and the coming PlayStation 3 is just the latest battle in the exciting leadership war that began in 2001, when Microsoft introduced the original Xbox into the console market. The PlayStation was the reigning champion of the console market. It had dominated since the mid-90s. The original PlayStation sold some hundred million units, a staggering figure at the time.

By the end of the 1990s Microsoft was worried about what is in our perspective the prospect of the PlayStation encroaching in the console market. Hence Xbox, was and still is a bid to win back territory for Microsoft in many of our gaming views. While Xbox might have been the new kid on the block, it had the might of all Bill Gates empire behind it. Before the Xbox, Microsoft had already ported Windows CE to the Sega Dreamcast, giving them experience in the console market.

More importantly, they had some of the best programming teams on the planet. One of their original plan, if not their main plan for this long-time distribution for the Xbox, focused heavily on integrating it with other Microsoft products, for example by including DirectX technology. The battle is about much more than just the console market. Sony and Microsoft are looking forward to a time of increasing integration of different electronic devices within the home. Consoles are increasingly becoming conduits for Internet access, for playing music, and even for personal computing.

Sony could be using the PlayStation 3 to push the Blu-ray disc format. In the past, it has come up with the PSX, intended as a multi-purpose device, able to record and play videos as well as being a gaming console. Microsoft, for its part, is putting a lot of weight on the Xbox Live online service, which we can expect to see expanding massively over the coming years. The continuing delays in shipping Windows Vista – the next incarnation of Microsoft PC operating system – has dampened the impact of linking it with the Xbox. Once Vista is released, we could expect to see a stronger focus on linking the Xbox 360 to a PC running Vista.

In short, everything is becoming interconnected, and the exciting console leadership war is at the very center of this battle. Whoever can dominate this market will have the say over how the digital homes of the future are laid out – and will be able to profit massively as a result. The stakes are high in the rivalry between PlayStation and Xbox. It is just an exciting rivalry to keep watching over the years to come, for sure.