t could do no wrong. Hundreds of millions of hardware units sold (enough so that you could find one in every three American households). A name that was near synonymous with "videogames"...similar to "Nintendo" during the late '80s. But last year, gamers turned on the PlayStation brand.

Everyone from the hardcore gamers to the mainstream press was dogging on the newest console in the PS family. What happened? How did an unstoppable juggernaut suddenly turn into an embattled victim? Is the PS3's reign over before it even began? We delve deep into the next-gen console war's unexpectedly bloody frontier to find out what went wrong...and where Sony intends to go from here.

Failure to Launch?
From a purely mathematical standpoint, the PS3 had a highly successful launch. Despite an asking price roughly twice that of the PS1 or PS2 when they debuted, Sony's next-gen behemoth quickly became the fastest- selling new console in Sony's history--over 2 million units made it to store shelves (in North America and Japan) within the first two months of release. And Sony's key launch title, well-received first-person shooter Resistance: Fall of Man, easily became the system's most popular game, selling through to nearly half of all PS3 buyers. Sounds like a rosy situation, right?

You'd be surprised...while the Xbox 360 and Wii enjoyed plenty of positive buzz throughout the 2006 holiday shopping season, the PS3 instantly became the industry's favorite whipping boy. Grumbling about the PS3's high price, lack of controller rumble, and spotty launch lineup became commonplace on Internet message boards, while the mainstream media focused on the greedy eBayers and random acts of violence that peppered PS3 queues. Sure, the hardware was selling, but nearly every news article regarding the PS3 seemed to have a negative slant (even here at EGM, our editors unanimously recommended the Wii over Sony's console). Seriously, when Time magazine calls your console "a bust," something is clearly amiss.

But is the PS3 really a dud? Or is everyone simply hoping to see a spunky upstart (be it either the Xbox 360 or Wii) pull a David-and-Goliath upset against the industry's reigning champion? No easy answer exists, as a multitude of factors contributed to the PS3's prickly situation. For one, the PS1 and PS2 didn't face competition nearly this tough, as the 360 and Wii each pose much larger threats than Sega's Saturn or Dreamcast ever did. Plus, the decision to make PS3 a Trojan horse for Sony's high-def Blu-ray disc technology could be backfiring--unless you convince consumers that this extra feature is something they truly want, they'll only view it as an added expense. And although the PlayStation Network offers an online solution far beyond what we saw on the PS2, the premium functionality of Xbox Live Gold still outclasses Sony's offering. Finally, an exodus of exclusives could be the most dangerous problem currently facing the PS3: although initially announced as PS3-only games, Virtua Fighter 5, Assassin's Creed, Armored Core 4, Fatal Inertia, and Blade Storm will all find their way to 360 by year's end. With Grand Theft Auto IV already spreading its love around to multiple consoles, will we see even more triple-A titles jumping ship? If Metal Gear Solid 4 or Final Fantasy XIII were to end up on 360, that would surely inflict some massive damage on Sony's new flagship....

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