360 one of Endgadget's "10 gadgets that defined the decade"

Over a YEAR later and Live was still behind Sony when it came to the amount of people playing Online with the PS2.
The latest figures from MS show only about half of ppl with an xbox/xbox360 use xbox live (gold and silver which is free)
 
Allow me to make a few clarifications,

The PSP had a service of some form along with a media manager before the release of the 360 and in a similar fashion as the iTunes (limited content though). Demos, videos, music and add ons were available for download. So that alone gave a hint that Sony was going to make something similar for the PS3..

Sony had its Connect Store which was mostly music until the video store was added at the end of 2006, almost 2 years after the PSP was released. Unlike Itunes that enabled video content 6 months before video enabled Ipods became available. Sony had a video enabled portable device almost a year before Apple but don't offer video content themselves until a year after Apple has done so.

Sony's model was nothing like Itunes. You bought music from Sony Connect which then had to downloaded to and encrypted by Sonic Stage and uploaded to the PSP. The PSP Media Manager (which you had to buy) just converted mis content to ensure playback on the PSP. Thats not an example of something similar to Itunes which is more tightly intergrated.

The fact that PSN didn't initially target the PSP for a streamlined and robust content service until Media Go (much more similar to itunes as its a media manager with PS Store intergration) shows up in 2009 shows how far behind Sony was with its online thinking. Sony's whole approach didn't initially put much emphasis on working to turn its online content delivery services into major revenue streams. Sony whole online approach seems initially predicated on adding value to its hardware by allowing it to take advantage on content bought or acquired online without much thought or investment into maximizing profit from such content.

The fact remains that Sony effort in content delivery was rather fragmented, unfocused and lack the ability to generate major revenue until recently and still lacks alot of the intergration exhibited by others. The 360 can be turned into a Zune device, which upgrades the marketplace giving the 360 direct access to more robust media feature set like a music store. Thats a lot of effort on MS's part for a portable device that has nowhere near the userbase and popularity of the PSP and released to the market two years after the PSP.

The fact that Sony announced PSN in 2006 does not mean that MS contributed to Sony's decision.

The release of a service similar to a competitor's service thats 4 years old while adding features that its competitors added months to years ago was somehow developed in isolation with no outside influences. Yeah right.

Sony has also been working on Home before for the PS2 which is another indication that Sony was planning for online applications and features. And thats probably what made MS create Avatars and the "newly" announced Game Room.

Home development started in 2005 and I highly doubt Sony was planning anything as complex and big as Home's current form on the PS2 due to the fact that HDD wasn't prevalent on the PS2.

The so called "unified" service of iPod is not necessarily that "seamless" since when I had my iPod I had to use the iTunes to convert/add music to it. The PSP worked in the same fashion as the iPod (connect with PC to add media), only I could add my content from almost every source that my PC had access to, plus I could have RSS feeds and download some content from the web browser. My PSP served me much better than the combination of iPod+iTunes except for the size and design of the product that made it less practical to carry and use everywhere.
(Similarly my 360 is less flexible than my PS3 because I can not simply copy media on it)

Itunes is way more seamless than the PSP's first initial services. Intunes is a store and a media manager. The PSP doesn't get something similar until Sony released Media Go, which was released spring of last year and didn't add full support for the PSP and PS Store intergration until last summer.

Your PSP has served you better because its a more capable device, but Sony could have easily made the PSP more attractive by exposing its diverse capabilities with a more intergrated, streamline and robust set of unified content delivery services and provided a greater level of revenue to make up for the lackluster PSP game sales.

Sony has been playing catch up when it comes to content delivery in the gaming market and more times have been market follower versus market leader in this arena. The console/portable market in terms of content delivery and expansion beyond just games is where its at now because MS and Apple has produce good success with their more vertically intergrated approach.
 
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For its new online plans, Sony claims it won't interfere with online PS2 titles, allowing developers to keep control and keep their intellectual property (a jab at Microsoft's heavy involvement with Live-enabled titles). "The content creator controls its own destiny," said Hirai. But Sony does plan to build an infrastructure around a standard protocol that developers can use and plug into their games, help developers with billing, and offer mini-transactions that mimic the iTunes model -- gamers will be able to purchase downloadable content, user-created content (GT4 experts could sell souped-up cars to newbies), episodic content, access to persistent worlds, and other entertainment content. No launch details or specifics were given for this new PS2 online model, but it is under development. To help with the storage of this content, Sony will also be releasing a larger-format memory card -- again, no details there either. Hirai sums it up: "We must evolve the experience of online gaming. Non-revenue-generating online gameplay is the norm, but not for long."

Link

I don't know about you but it sounds to me that what they wanted to do in 2004 is pretty much what we have now ala PSN. In fact they had the "User-created content" within the PSN without GT4 but with Little Big Planet instead.

That sound like a very decentralized service with the online gaming experience mostly in the hands of the developers. Exactly how did they evolve the experience of online gaming when everything they brought to the table looks very much something already offered by Live except Home, which I give Sony kudos for doing. Furthermore, there is no mention on anything non-gaming related in terms of content delivery and non revenue generating online gameplay is still very much the norm for Sony.

Outside of Home, Sony pretty much isn't evolving the online experience they just mimicking others who are. Sony whole approach has change become more vertically intergrated and centralized like MS service and less horizontally intergrated and fragmented which haven't proven to be that great of success. The perfect example being Media Go where you can go and buy games and music for your psp online. Instead of going to Sony Connect to buy music and then use other means to buy games and other content online and then having to purchase and make use of the media manager to make sure that content is uploaded in a playable format.

Nevertheless, online gameplay itself hasn't evolved much since the last generation. Its the content delivery thats drastically changed since the last generation and made consoles so much more than they were last gen.
 
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Well sony did push user generated content, the latest would be singstar viewer. An other example would be rockband, Surely online gaming is evolving.
 
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