The PS3, scheduled to be introduced in Japan in mid-2006 and in the U.S. a few months later, is expected to be technically more advanced than the Xbox 360 in many ways. Notably, it will include a high-definition DVD player intended to capitalize on the growing market for HDTV sets, which, of course, Sony also makes. (The Xbox 360 supports HD games, but it lacks the ability to play next-generation, prerecorded HD movies.) Sony’s CEO, Sir Howard Stringer, said recently that Sony will sell the PS3 at a loss in order to populate the world with Sony’s favored high-definition DVD standard, known as Blu-ray. Sir Howard said the PS3 will sell for $300 to $400 and will come with a bundle of games, movies, and TV shows, many of which Sony also makes. The question is whether the titles will be bundled on Blu-ray DVD discs or on a built-in hard drive.

Because the first standalone Blu-ray DVD players are expected to cost $1,000 or so, Sony is essentially giving a free next-generation DVD player to every PS3 customer. That eases the pain (a little bit) for people faced with buying new, high-def versions of their favorite DVDs.
How else does the PS3 stack up against the Xbox 360? It’s based on a bodaciously powerful Cell processor developed by IBM and Toshiba, which appears to outmuscle the IBM PowerPC custom chip used in Microsoft’s Xbox 360. Sony has also tapped nVidia to supply the graphics engine in the PS3, and it’s going to be a whopper, with nearly double the rendering power of the top graphics card that nVidia now supplies to PC gaming enthusiasts. Again, on specs alone, the PS3 should have a graphics edge over the ATI-based Xbox 360.
So should you wait a year for the PS3 or buy the Xbox 360 today? Current Xbox owners are likely to upgrade to the 360, and current PS2 owners will probably stick with Sony. New gamers, however, have little reason to wait nearly a year for the PS3, and Microsoft is almost certain to gain some ground on Sony.
The one wild card: Sony could slash the price of the current PS2, perhaps to $100, making the $400 Xbox 360 seem less attractive.
Via – CNN Money