In the realm of the gaming consoles, Microsoft and Sony are fierce competitors, but they have a lot of things in common: they both wish to be the next big thing in entertainment, the center of your living room.

From the beginning, both their consoles, PS3 and Xbox 360, were promoted not only as gaming devices, but as entertainment hubs as well.
And besides that, PS3 and Xbox 360 share another similar problem: they both have to compete against Nintendo Wii.

And apparently after all these years, both Microsoft and Sony are ready to understand that price is a key factor in luring gamers to their consoles.

At this year’s E3, both Microsoft and Sony announced new prices for their consoles. But while Microsoft decided to present the new $299 price tag of its Xbox 360 Pro console as a price tag, Sony took another road and introduced an upgraded version of its PS3 console, for the same price, $399.

However, despite the media frenzy that surrounded both these announcements, let me say that it’s not so big a deal. Microsoft will continue to sell its Xbox 360 with 20 GB hard drive until it runs out of stock, and then it will be replaced with the 60 GB version which will go for the same price, $349. As for Sony, the new 80 GB version will no longer be compatible with the PS2 games.

In fact, all it was about was bigger storage, because both companies have announced new deals regarding movies and digital content.
For Xbox 360, the movie business is nothing new. There are already movies available on Xbox Live Service, but the company has just extended its catalogue by signing a deal with Netflix. As for Sony, the movies which will be available via the PSN Network are just the start.
If this is the strategy through which Sony and Microsoft intend to compete with Nintendo then…Houston, we have a problem!

The success of Nintendo is not just price or casual gaming related. Nintendo has managed to reinvent the game. Millions of people are ready to play Wii Sports or Wii Fit because it’s fun and different. It’s all about gaming.

Instead, Microsoft and Sony chose to enter into movie downloads, a nascent, but already an overcrowded market where Apple and Amazon already have well-established businesses.

I think staying focused on gaming will be a better idea for both companies, especially since in the latest Top 10 of software sales in May, Nintendo had seven out of ten titles. GTA IV was the only Xbox 360/PS 3 that made into the top.

In a year when the battle of the gaming consoles has meant software and not hardware, announcing price cuts and movie deals is quite odd. But let’s hope that Microsoft and Sony know what they are doing. Or not?