In politics, it’s considered critical to success.

In the console battle between Microsoft’s Xbox 360 and Sony’s PlayStation 3, it might become every bit as important.
When Microsoft decided to confirm the worst-kept secret in the industry, the impending release of the Xbox 360 Elite, the dynamics of this battle changed completely… but not in the way you might think.

Not so very long ago, Microsoft’s machine made a statement to consumers; most of which don’t own a HDTV: Their system can handle high-definition if you have it, but you don’t need to pay for it right now to take advantage of the Xbox 360’s features. The questionable decision regarding releasing the hard drive-less Core system notwithstanding, the idea was that Microsoft was trying to deliver an economical system with all of the things you needed and none of the things you didn’t.

In contrast, Sony’s PlayStation 3 was perceived as an overblown, overly expensive piece of hardware; foisting 1080p and Blu-ray capabilities upon an consumer base that was neither willing or able to fully support it at that point, and the PS3 suffered as a result.

Flash forward to today: Blu-ray has won the high-def DVD battle. (I’m like Fox News on Election Night; I don’t need to wait for all the precincts to report!) With a lead over HD-DVD that’s growing literally by the day due to exclusive content (think Sony Pictures’ Casino Royale or Spider-Man 3’s going to turn up on HD-DVD anytime soon?) and the market penetration provided by the PS3’s “Trojan horse” strategy, Blu-ray has gone from a curiosity to something most people will have in their homes within three years. HDTV sales continue to skyrocket, and even Microsoft used a software update to enable 1080p output from the Xbox 360.

Microsoft’s between a rock and hard place; they now appear behind the curve technologically, with the notable exception of the excellent Xbox Live and all that it entails. But with the announcement of the Elite, including a large hard drive and HDMI output, Microsoft has unintentionally yet wholly validated Sony’s strategy; changing the perception of the PS3 from what it was to what it is now - a comparably-priced console with next-gen DVD capabilities, more flexibility with accessories and the ability for developers to ensure that they can use a hard drive in every game.

Overnight, the PS3 looks like a distinctly superior system in every way but one - Xbox Live - and Sony had to do… nothing.

The price difference between the only two consoles from Microsoft and Sony that matter now - never mind the marketers - the Xbox 360 Elite ($480) and the PlayStation 3 60GB ($600) is only $120. For that money, you’ll get a Blu-ray player in your PS3 that’s worth triple that by itself on the market today. Stand-alone Blu-ray player prices will drop, of course, but one must also consider that a year of Xbox Live service, Microsoft’s significant advantage over Sony, is $50, moving the immediate price between the consoles even closer.

Now, with the prices comparable, brand recognition comes into play, and that ball falls squarely into Sony’s court. Microsoft’s sole remaining weapons are Xbox Live and a slew of exclusive titles; formidable weapons to be sure, but as they’ve re-invented themselves on the fly, they’ve fumbled a bigger one.

The hardest thing that Microsoft had to overcome - and was doing so - is now the one thing that they’ve just surrendered.
By making a better Xbox 360, they’ve made a better PlayStation 3, too.

To many consumers, perception is everything, and that’s why framing the discussion is so important. In politics, one usually has to do that through speeches and advertisements. In this case, shockingly, all Sony had to do was wait.