From this Economist article:
"...Microsoft's new software-development platform for games, called XNA, a set of software tools that can be used to write games for PCs, Xbox and the forthcoming Xbox 2"
Interesting move - by creating complementarity among different assets MS has massively (they hope) dropped the cost of producing games. This is a nice move for a couple of reasons. First, as the article points out, Sony's strategy is hardware focused. What the article misses is that the strategy is the obverse of this - focused around complementarity in hardware, massively raising the benefits of publishing games (they hope).
But two other crucial points to consider are that in the games industry, both technological leadership and the cost of producing games have had little to do with success. This sounds paradoxical, but if you know the industry, think about the N64, the PS2, and then the various Sega and NEC platforms and you'll get the picture. Success, both from the publisher and the console maker's point of view has become a Red Queen race for hits.
So maybe neither of these strategies fit the market dynamics. That said, I've gotta add that I find games an increasingly lame field to write about, since the innovators have been priced out of the market by the corporates - it's really only Sony (and a few smaller firms) who do anything interesting every now and then.