Microsoft's billion-dollar venture in gaming is on the line with 'Halo 3'

Microsoft launched its Xbox 360 a year before Sony's PlayStation 3 and Nintendo's Wii, which gives independent game studios an extra year to understand the technology of the Xbox 360. In practical terms, this means that Microsoft has a big advantage this year: Xbox 360 will have the strongest lineup of games this holiday season - and games drive console sales.

Game industry analyst David Cole said Microsoft's one-year head start provides a window of opportunity that will not be repeated. "Right now is a time for Microsoft to take advantage," Cole said. "They need a big spike in hardware sales."

Against a backdrop of a resurgent PlayStation 3 and the unanticipated success of the Nintendo Wii, "Halo 3" may be a one-time opportunity for Microsoft to create buzz and sales for Xbox 360 and expand its user base to a point where the gaming division becomes profitable.

"It's not a make-or-break holiday for the Xbox 360," said Brian O'Rourke, a market analyst with In-Stat. "It is a make-or-break year for the 360 to become the No. 1 console."

The article includes additional comments from Cole, O'Rourke, IGN GamerMetrics analyst Nick Williams, and GameSpot senior editor Ricardo Torres.

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