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If you asked anyone in or near the games industry a year ago if Sony would be teetering on the brink of failure today, pretty well all the answers would be some variant of no. A person or two might say they foresee difficulties with their struggling consumer electronics division, but the answer would essentially be no. That is unless you asked the clever people at Microsoft behind the Xbox. What the Xbox people have figured out is nothing more than what Sony figured out more than a decade ago with the Playstation, and is what any company with aspirations of dominating the console wars must know.

What exactly is this 100 Billion dollar answer? Easy, all a company has to do is emulate the success' and address the almost imperceptible failures of the current king. Sony performed this trick against Nintendo with the Playstation and have ran with the knowledge since. Sony knew that consumers, despite how seemingly satisfied they were by the two dimensional cartoon like adventures offered by Nintendo and their developers that consumers desired whole new types of experiences. What Sony saw is that video games didn't need to be simple, video games could be as complex and involving and as entertaining and engrossing as films or novels. But how on earth do you make games into something akin to movies? Three dimensions, thats how.

Sony went on to do what it is great at, make the impossible possible. In much the same way that Sony took the large and fairly expensive cassette tape technology and re-engineered it into the portable and cheap Walkman, they took MIPS computing and vector graphics and fettled and packaged it until it could be made cheaply and easily in Playstation form. By doing so, Sony created a platform which could render compelling three dimensional graphics and had the instrument which could present these new experiences to millions of gamers. There was just one tiny little problem. Who on earth will make games for the darned thing? Surely not Sony.

In a move familiar to any Xbox watcher Sony figured out what developers wanted by buying them up. One of the first acquisition targets was UK based Psygnosis. Sony had developed a ridiculously complicated custom development workstation which didn't work well and was absurdly expensive. Psygnosis had already been working on Playstation games, but without using any sort of Sony ridiculator ten million: super developers edition. They made their own PC based development suite and went to work on their games with relative ease and low cost. When Sony bought them up and saw this, instead of squashing the system, as Nintendo would have done, they started handing out Psygnosis' development systems to any developer that would even consider thinking about Sony. When a development team is practically given a easy to use, powerful development system by the biggest consumer electronics firm in the world, it's hard not to try it. But being cheap and easy isn't enough, developers need to be reasonably confident that their software can be used, and that their cost of making the game is low enough to make a profit.

Sony's solution was beyond brilliant. Nintendo used cartridges, cartridges with chips, chips that cost money, lots of money. The bigger the game a Nintendo developer made the more it cost the developer to make the game. In order for a developer to make a game for Nintendo not only did they have to get a license from them, they also had to buy the cartridges from Nintendo, cartridges which cost more the bigger the game is. Effectively a tax on creativity and ambition. Sony's answer was they will physically produce the game for you, you design it, we print it, as big as you can make a game is how big it will be. Their catch? Developers pay more in license fees, much more, but it didn't matter because at the end of the day the license fee for Sony was less than the cartridge and license from Nintendo. Not only was it cheaper, there no longer was any pressure to make a game that is small enough to make a profit on. Sony didn't just make it easier to develop and publish games, they gave their developers freedom.

Before Sony could have a successful platform they had one more variable that they needed to control, their developers. How would Sony gain the confidence of developers to spend money developing for their platform? Atari would have love to known how, so would have Sega, and after the Playstation, Nintendo would have to relearn what they thought they knew how to do. Sony's answer was a benevolent stick and a really big carrot. The stick was in the form of second and first party developers, and the carrot was the promise of free and subsidized marketing. The developers Sony had control of were directed to make games that offered completely new gaming experiences, games that change the way you think of games. Games like Wipeout with it's cd quality techno soundtrack, Ridge Racer's amazing arcade quality graphics, Gran Turismo's realistic physics, and Final Fantasy Seven's cinematic gameplay. These games along with dozens of other first and second party games showcased to developers what a Playstation game could and more importantly should offer. Third party developers saw their successes and began to make games which offered the same sorts of experiences that Sony was pushing.

Games like Resident Evil, Metal Gear Solid, Crash Bandicoot, Tomb Raider and countless others began offering this new sort of game play experience to consumers. When a developer published their game and most importantly paid Sony's license fees, Sony advertised the developers games with Sony's message of exciting brand new game play experiences. Developers were pushed by artistic freedom, and were drawn in by free ads.

Sony's answer to the 100 billion dollar question was for intents and purposes correct. Sony won the console war, they knew they would win, it was entirely obvious to them that they would. The Playstation 2 was not revolutionary or different from the Playstation in any meaningful sense. It was a new form of the old answer, it wasn't as easy to develop for as the Playstation, but it offered the continuation of Sony's vision. Nintendo Countered with a watered down version of Sony's vision with the Gamecube, Sega's Dreamcast offered a different but less appealing vision that was vulnerable to Sony's inertia. Enter Microsoft.

Whatever their reasons for entering the console market actually are, they are utterly determined to dominate it. Microsoft knew a few things about the console market, first Microsoft has lots of money, second they could make more money with the people they have by dominating this market than by expanding currently held markets. The clever folks behind the Xbox didn't know how to dominate the market when they were planning the machine. They knew the answers to the 100 billion dollar question in previous generations, but weren't sure what it was for this and the coming generations of consoles. So what did they do? With the Xbox they came up with the wrong answer, they knew it was the wrong answer, they didn't care it was the wrong answer, because this wrong answer would help them find the right answer. Their wrong answer was throwing every “right” answer they could think of at the Xbox, Online play, great first party titles, innovative controllers, low licensing fees, easy development systems, free advertising money, hard drives, networking, dvd playback and so on. By gradually changing the answer through the consoles life and obsessing over consumers reactions to the Xbox experience they were able to steal a significant share of the market, more than many in the industry ever expected them to be capable of.

This experiment gave them the insight needed to answer the 100 billion dollar question for this current “next generation” with the same confidence and accuracy Sony had when they debuted the Playstation over 10 years earlier. With the Xbox Microsoft gained the insight needed in order to understand what worked for Sony and where they needed to go in order to take Sony's spot in the console wars. Microsoft learned with the Xbox that consumers still fundamentally wanted the experiences available from Sony, they learned consumers wanted to interact with consoles in intuitively simple ways, they learned that gamers didn't really want on-line support for games unless it was fun and obscenely easy to play with friends and strangers. They learned it makes more sense for them to outsource hardware to IBM and ATI than licensing existing hardware, or developing their own.

At the very same time Microsoft was figuring out everything, Sony's answer was vanishing in thin air, yet nobody at Sony seemed to notice. The Playstation 3 is the newest form of the answer to destroy Nintendo, but they are dead. Sony believes they need to out engineer their competition, even if it means outsmarting themselves and all of their developers, so that they can offer the most powerful version of the Playstation experience. They believe that developers will continue to support Sony despite of development difficulty because they are Sony, and they have exclusive birthright to the Playstation experience. To this very moment Sony believes that on-line play is a gimmick that consumers don't crave. They believe in every part of their answer against Nintendo, they arrogantly believe it to be the case because it has worked nearly flawlessly for a decade. Their very success has blinded them.

Microsoft holds no such delusions, at least not with the Xbox 360. Microsoft knows they not only must deliver Sony's answer but they must fix what Sony has failed to even see. By copying the success' of the King and fixing it's failures, no matter how imperceptible they are to the king, Nintendo, Sony, and now Microsoft have held the answer to the 100 billion dollar question. Nintendo failed to see Sony when they came, and Sony seems ready to repeat Nintendo's failure with Microsoft. Nintendo has opted out by creating a new answer to the question with the Wii, and are developing an entirely new market of cheap, accessible, and fun video game experiences. It has taken them over a decade to realize their answer against Atari could not be adapted in the world of Playstation. In finally re-answering the question Nintendo is again free to do whatever they want.

Sony and Microsoft are alone in their war and Microsoft has the answer. Microsoft provides the Playstation experiences craved by gamers, and offer whole new experiences of on-line play that consumers are beginning to realize with Xbox Live. The Playstation 3 offers a terrible version of the Xbox 360 answer, and proof that the Playstation answer to the 100 billion dollar question is done and dead. Both Microsoft and Nintendo know why the nearly impossible to produce Playstation 3 units are lining shelves nationwide. The people at Sony are blind to the truth, going as far as stating that there are shortages of systems. If Sony has any desire to win the console wars they must abandon faith in their answer and be prepared to adapt to Microsoft. That or come up with a whole new answer to the question. The extent of their failure depends on their ability to do this, and it's all a matter of Sony's choice.