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TheStreet Open House

No Quit in Xbox Rivals

Microsoft's (MSFT) move to roll out the new Xbox 360 game console Tuesday, ahead of the competition, has drawn the company loads of press, and potentially sizable sales.

But don't look for the company's rivals to concede defeat.

Sony (SNE), for instance, has dominated the last two console cycles, and many analysts think the company's PlayStation 3, due out next year, will be more than a match for the Xbox 360.

And although few expect Nintendo's Revolution to be the champ this time around, the company has a proven track record in the game industry, and many analysts expect it to once again carve out a substantial niche when it launches next year.

( TheStreet.com also looked this week at the perception of Microsoft's ballyhooed rollout ; how far the company will make it into consumers' living rooms ; and what the new games and new game machines mean for investors.)

"This is still Sony's market to lose," says Michael Goodman, who covers the video game industry as a senior analyst for the Yankee Group. "When the dust settles in three years or so, Sony will be back up on top. But it will be a close race."

How the race turns out will affect the three companies in salient ways. For Microsoft, its also-ran status in the current console cycle has been yielding losses that have weighed on its bottom line over the past five years.

In contrast, the PlayStation division has been one of the few bright spots for Sony in recent years, as it has lost ground in digital music players and other consumer electronics markets.

Nintendo, however, risks becoming a perpetual third player in a market that has seldom had room for even two.

With its launch of the Xbox 360, Microsoft is attempting to build on -- and learn from the mistakes of -- the original Xbox. In addition to being first to market, Microsoft is touting the device's high-definition graphics and sophisticated online game system.

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