Sony vs. Microsoft

If there's ever been any question as to what Microsoft does and does not monopolize, the video game industry would certainly fall under the "Does Not Monopolize" category. In fact, Microsoft is challenging the Sony Playstation's dominance of the gaming market, especially now that Sony announced that their super speedy computer chip - dubbed The Cell - will power the next Playstation console in 2005 or 2006.

The Cell, which combines four processors that will allow the third Playstation's graphics to look as if it were "done in a Hollywood studio," has Microsoft scrambling to respond with a new gaming system of its own.

And considering that gamers tend to be price-sensitive, The Cell will sell for less than $100, as opposed to the $150-$200 selling price of a lot of computer processors. This is even worse news for Microsoft!

But an Insight 64 chip analyst says PC processor designers shouldn't be too worried, considering how specialized The Cell chip will be. On top of that, the market for video game chips is only 1/10 the size of the market for PC chips.

So here are my questions: Will the demand for Playstation systems increase, allowing Sony to dominate the market even more so than Microsoft is claiming they already do? Or will the demand for The Cell chips be nearly non-existant, considering how small the size of the video game chip market is compared the market of PC chips. What will Microsoft's new system have to be like in order to rival Sony's, or will Sony's system even be a threat to Microsoft?