Nintendo found big success in recent years by releasing hardware that revolved around new kinds of interfaces instead of pushing technical boundaries. Microsoft's Xbox 360 is on the upswing partly thanks to the new Kinect and a gradual addition of new features to its console over the years.
But Sony Computer Entertainment CEO Jack Tretton told Fortune in a new interview that a game console must launch with the best technology available at the time in order to stay relevant for a long period. And that's been PlayStation's philosophy.
"If you're really going to sustain technology for a decade, you have to be cutting edge when you launch a platform," he said.
"Here we are four years into the PlayStation 3, and it's just hitting its stride," he said, echoing another recent interview. "We'll enjoy a long downhill roll behind it because the technology that was so cutting edge in 2006 is extremely relevant today and is conspicuously absent in our competition."
The PS3 launched in 2006, sporting a complex Cell processor, an advanced RSX GPU co-developed by Sony and Nvidia, a standard hard drive, Blu-ray playback, Bluetooth connectivity, built-in wi-fi and HDMI support.
The build costs were high -- estimates found that Sony was selling at a loss of over $300 for the 20GB launch model, which sold for $499. The 60GB model sold for $600 at a reported loss of around $240 at launch.
Since then, Sony has used its expertise in electronics manufacturing to gradually cut costs, and only last year did reports emerge that the company is no longer taking a hit on every console sold. To Tretton, that investment is paying off in the long run.
"[Microsoft and Nintendo] are starting to run out of steam now in terms of continuing to be relevant in 2011 and beyond," Tretton said. "I mean, you've gotta be kidding me. Why would I buy a gaming system without a hard drive in it? How does this thing scale? Motion gaming is cute, but if I can only wave my arms six inches, how does this really feel like I'm doing true accurate motion gaming?"
Sony appears to be once again following its cutting-edge tech philosophy with the PSP successor, the codenamed Next Generation Portable. The NGP will have high-end features, including 3G and wi-fi support, a five-inch multi-touch OLED display, a multi-touch pad on the back, dual analog sticks, flash card support for software, motion sensors, built-in GPS and a four-core CPU, among other features.
At least one analyst expects the NGP to cost "at least" $299 in the U.S. When it launches later this year, it will go head-to-head against Nintendo's $250 3DS. Tretton previously said that price doesn't "make or kill a platform" -- the challenge is providing value for consumers.
Tretton also called Nintendo's market-leading handheld consoles a "great babysitting tool," adding that "no self-respecting 20-something is going to be sitting on an airplane with one of those. He's too old for that."