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Sony Unveils PlayStation 3 Console

The company does its best to upstage Microsoft's offering.

Updated from May 16

Sony

(SNE) - Get Report

did its best to upstage

Microsoft

(MSFT) - Get Report

on Monday, unveiling its PlayStation 3 video-game console.

The successor to the popular PlayStation 2, the new machine will go on sale next spring. That will put it right on the heels of Microsoft's Xbox 360, which is expected to be on store shelves this fall. Microsoft introduced the 360, its new game console, in an infomercial on MTV last week.

As Microsoft did with the 360, Sony touted the high-definition capabilities of the PlayStation 3 and its networking features. The device will support the 1080p HD TV standard -- the highest current resolution of HD televisions -- and will have built-in Bluetooth, WiFi and Gigabit Ethernet networking.

Sony officials spent much of the more than two-hour press conference touting the technical abilities of the upcoming device. At its heart will be the Cell processor, co-developed with

IBM

(IBM) - Get Report

and

Toshiba

. According to Sony officials, the Cell processor in the PlayStation 3 will be considerably more powerful than the IBM PowerPC processor that will be at the core of the Xbox 360.

But perhaps more important than the devices technical specifications, Sony touted the wide range of software publishers and developers working on games for the PlayStation 3. Among those who appeared on stage with Sony officials was

Electronic Arts

(ERTS)

CEO Larry Probst, who noted that his company had six games available at the launch of PlayStation 2, a significant number at the time. EA plans to make a similar "big bet" on the PlayStation 3, Probst said.

EA demonstrated a new version of its

Fight Night

franchise that it is creating for the PlayStation 3. The game featured boxers with nearly lifelike skin -- their pores were visible in close-ups -- and realistic reactions when they punched or got hit.

"We think the PlayStation 3 is going to change the face of entertainment," Probst said.

Sony also showed off PlayStation 3 versions of

TheStreet Recommends

Square Enix's

upcoming

Final Fantasy XII

, its own popular

Gran Turismo

franchise, and game demos from the likes of

Take-Two Interactive's

(TTWO) - Get Report

Rockstar Games division,

Ubisoft

,

Capcom

and

Namco

.

According to the presentation, some developers just received development kits for the Play Station 3 two months ago.

Of course, like Microsoft, Sony left some things unsaid. The company didn't say how much it will charge for the PlayStation 3, when exactly it will ship the device or whether it will launch the PlayStation 3 in different regions of the world at the same time.

While the company showed off some PlayStation 3 boxes -- they look like a more rounded version of the original PlayStation 2 -- it didn't have any working demonstration models for its audience to test.

However, Sony did disclose -- as Microsoft had not -- that its new unit would be backwards-compatible with games made for the PlayStation 2 and PlayStation 1. (Late Monday, Microsoft told a press gathering that the 360 also would be compatible with games for earlier Xbox versions).

Sony is trying to stave off a challenge from a resurgent Microsoft. In terms of units sold, the software giant's Xbox was a distant second to the PlayStation 2 in the current console cycle, and the company lost billions trying to establish itself in the business.

But Microsoft has seen market share gains in recent months, and, thanks to the huge success of its

Halo 2

game, it finally posted a profit in its games division two quarters ago.

The company is hoping to build on that success with Xbox 360. Microsoft, like Sony, is positioning the device as more than just a game machine, with the ability to connect to Windows-based PCs and to play multimedia files over a network.