Getting their ass handed to them on a platter
So here I sit watching time delayed E3 footage of the Sony PS3 launch up at Brien's. I feel sorry for him and every other Microsoft employee watching this. As much as I really liked the original XBOX I really think that the Playstation3 is going to mop the floor with the XBOX 360. It has nearly 8 times the processing power, significantly better graphics, and a physics engine that blows anything I've seen in the past out of the water.
The most impressive part of the demo was the real time physics engine combined with realtime shaders, ray-tracing, and artificial intelligence combined into a single fluid package. The graphics look more real to life than anything I could have possibly imagined in the next few years hardware wise. It's nearly equivalent to pre-rendered content made for movies of a year or two ago.
So yeah - Microsoft's XBOX 360 launch was underwhelming, and when combined with such a stunning showing by Sony I really think that Microsoft is going to lose this one. It's sad to see given that the original XOBX had so much promise and capability as a platform and the next generation platforms are so disappointing.