Patsu I find your arguments interesting.
1- The MS money machine line - MS has a lot of money. Basically due to good management of analyst expectations, stock usage, and "innovative" ways of leveraging technology to support their "system" of integrated software services. Hasn't Sony been profitable for the two generations? What was the break even point for Sony in the last two generations (which means how many consoles = equaled the break even point) and how many consoles did they sell beyond that? You cant tell me that 100 million plus consoles has not equaled BILLIONs of dollars of profits for years. If that money has been used to support other lagging parts of the company then so be it, but no one believes that Sony should not have enough money to compete with MS in this space. Thats Sony's fault and Sony's problem.
2- Monopoly schmonopoly - MS is a virtual monopoly because they make things easy and attractive for those of us that arent geeks. People didnt choose MS windows because they had to originally; they chose them because they wanted to. Their OS worked and had attracted more developer interest on the right hardware at the right price than Apple, Unix, Amiga, and Atari did. Apple is a virtual monopoly in the MP3 space, YouTube in the user video distribution space, and Sony has had all the power of a monopoly in the console space.
Sony is a consumer electronics GIANT. You can go soup to nuts with only Sony gear in your household... you cant do that with MS. MS makes no TVs, no DVD players, amps, receivers... All of that competence and industrial entrechment and capacity, you worry about some software guys that cant get WebTV off the ground and have staggered in both the console and small CE phone and PDA business?
Sony destroyed Sega and has roundly whipped Nintendo into an also ran console maker such that they really receive most of their income from handhelds.. and overwhelmed MS into 4 Billion dollars of losses... Sony makes and breaks developers and invents new chips (Cell, Emotion Engine) and sponsored the creation of CD (dominant optical sound format), DVDs (dominant AV format), Bluray, HDMI and S/PDIF among others... which everyone basically uses for all their audio visual entertainment needs...
I mean really... Sony has the upper hand in all the elements of this arena and should be dominating it from UI, to hardware, to ergonomics, to aesthetics, to component quality, sourcing, manufacturing and distribution... to software. Sony also had a seven year head start (1994-2001) with almost ten years of absolute domination (1996-2006) in the videogame software development space... Why are there "mistakes" and why is there even any room for mistakes from them now?
3- MS's Xbox division was up against Sony as a whole last generation and lost BIG. This time MS decided not to make the same mistake twice. Sony put even more effort as a COMPANY into PS3 than any other product before and you want MS to just sit there and let a couple of the old Xbox gaming geeks, IE guys and marketers build a system? Anyone who doesnt believe that MS' approach this time isnt the ONLY way for ANY company to attack the console market as it is currently dominated by Sony, has a very friendly relationship with a local crack dealer.