There is another problem which Microsoft faces at the moment - one which the company has shown even less sign of understanding, or addressing. It is the problem of hardware reliability and customer service, an area in which the Xbox 360 has a track record that is nothing short of utterly appalling - and an area which Microsoft absolutely must address, or risk handing the goodwill of the market back to its rivals.
This problem hasn't gone away; in fact, from a consumer point of view, Microsoft appears to have done precisely nothing to address it. While the attention of the media may have turned to scrutiny of Sony's failings, the vast numbers of Xbox 360 owners who have been let down first by Microsoft's shoddy manufacturing, and subsequently by the company's arrogant and unfair policies with regard to customer service, have increased. Their voices are contributing to a groundswell of unrest and negative buzz which will hurt Microsoft very badly indeed if it is not addressed.
To hardcore gamers, consoles are "special case" items; they are early adopters, generally have a large disposable income, and are willing to accept all manner of problems and flaws in order to enjoy the games they want to play. However, they are a small - if vocal - market. To everyone else, to the vast ocean of consumers to whom Microsoft must now appeal, if the PlayStation brand is to be unseated, a console is just another piece of consumer electronics, and it is subject to the same standards you would expect from your DVD player, your digital camera or your toaster.
You wouldn't buy a specific DVD player, no matter how nice the feature-set, if a friend had told you that he bought one last year and had to return it to the manufacturer three times.
Right now, those horror stories are proliferating; the word of mouth about Xbox 360 is that the games are great, but the hardware is a nightmare. If Microsoft is serious about reaching an audience with Xbox 360 which is bigger than the 20 million units achieved by Xbox, then that simply isn't good enough. It's time for Redmond to stop burying its head in the sand over this problem, and start coming up with solutions - before its unhappy customers become one of Sony's best assets.
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