And yet it is done, and profitably so. Sony's PlayStation 3 is expensive precisely because it uses new chips and optical drives whose manufacturing processes have yet to be refined. Moore's law has made the old silicon parts in a PS2 dirt-cheap; meanwhile, videogame studios continue to churn out games for it, making it an entertainment bargain.

Windows XP, meanwhile, has been relentlessly tested by consumers, businesses, and hackers; it is now reasonably bug-proof, reasonably easy to use, and ubiquitous. Windows Vista, by contrast, is slow, unpredictable, and uncertainly secure. (Microsoft claims Vista is safer, but any security expert will tell you that security holes only reveal themselves over time.) Microsoft perhaps recognizes this, since it's continuing to sell Windows XP in some poorer countries.

So far, Sony and Microsoft are focusing their selling of the old in developing markets. But why not sell the old stuff everywhere, instead of forcing the likes of Dell to jump through hoops to offer it to willing customers? That's exactly what Nintendo has done with the Wii. Essentially a repackaged GameCube with a motion-sensitive controller, the Wii has eviscerated Sony's overexpensive PlayStation 3. It's a classic triumph of the old.

The chief lesson Silicon Valley has taken from Moore's law is that new technology will always be better. Hence the relentless pursuit of the new. But Moore equally tells us that old technology will always be cheaper. Someone's going to figure out how to sell the old stuff at a profit. Why not have it be you?

It seems like a lot of money to us cheapskates on the Web, especially for something that amounts to a lot of promotional content and advertising for other PlayStation titles, but remember that gamers already forked over $400 to $600 for the console and around $40 to $70 for each game. And did we mention Veronica Belmont? In high definition? Hawt.

When Microsoft announced its Xbox Live Marketplace for the Xbox 360, which offers television and movie downloads, last November, it was only a matter of time until Sony felt compelled to offer a similar service for its PlayStation3. As a movie studio owner, Sony even had, arguably, an advantage. Its inability to beat Microsoft to market was baffling.

The PlayStation 3 has always been marketed as a computer for your living room — the digital hub for family entertainment. This announcement is simply Sony fulfilling on its marketing promise. What's more, the timing sets Sony up for the holidays. Sales of the PlayStation 3 have lagged compared to Microsoft's Xbox 360 and Nintendo's Wii. Sony recently dropped the price of its 60GB console by $100 to spur sales and clear out inventories. And it's also finding that its early dominance in Blu-ray, the high-definition movie-disc format built into the PS3, losing ground to HD-DVD.

This announcement, more than anything, makes PS3 look something like the wunderkind device Sony originally promised. Something that plays Blu-ray movies, games, and can download TV shows. Suddenly an overpriced console looks like the deal of a century. By tying digital downloads to the PS3, Sony hopes to generate some much-needed console sales, and in the process getting its hi-def movie player into more homes. But confusion over its strategy — and the complications of a failing, now-shuttered music-download service — slowed things down. Sony may claim to be moving faster now. But it can't hide the fact that it's far, far behind Microsoft and Apple in this race.

I am happy to graduate from Sony Computer Entertainment Inc. after introducing four platforms to the PlayStation family. It has been an exciting experience to change the world of computer entertainment by marrying cutting edge technologies with creative minds from all over the world. I'm looking forward to building on this vision in my next endeavors.

SCEI Corporate Release [SCEI, thanks R. Hunter!]

GDC07 PS3 Home [Kotaku]

Sony's taken the best of various community aspects and blended it into a theme called Game 3.0. Not an official trademark or anything, it's just their idea that video game equivalent of Web 2.0 and its user-created content would be Game 3.0 (goes along the three in PS3).

So how does it work?

Well, you have private and public areas. Imagine the Sims and the ability to customize your home, your body, your clothes, and your face. The 3D avatar and 3D environment actually looks pretty great, considering it's actually PS3-level graphics and not just something quickly thrown up (like Second Life). You can customize your personal apartment however you wish and invite buddies (other avatars) over to chat, play arcade games, launch multiplayer games, or just hang out.

There are loads of public spaces as well. These can be generic arcade halls where you can play pool and bowl, or game company sponsored areas where you can play demos of their latest games and chat with friends at the same time. There could even third-party non-game areas like movie theaters and clothing stores where you can watch trailers, movies, or try on the latest overpriced shirt from A&F.

Speaking of commercialization, there's going to be ads. Yes, there are 3d Banner ads and HD Video ads embedded inside "appropriate" areas in the public spaces. Fortunately for you, you can bring up a virtual PSP interface from anywhere and warp back home to the (presumably) ad-free space. But in your space, you can load your own pictures from your PS3 hard drive onto a picture frame or your own MP3s onto a jukebox.

This is definitely something we can see people sinking a lot of time into as far as socializing. It doesn't seem to have an economy in it like Second Life, as far as we saw, so all your money will be sent to Sony when you purchase arcade games, furniture, and more clothing for your avatar.

How about for the hardcore gamer? There's the "Hall of Fame", an actual hall with display cases that show the "achievements" (Sony's not calling it that) that you've unlocked by playing games. Not only can you browse what you have, you can go to a gigantic hall (imagine the Star Wars Imperial Senate) and view trophies for games you don't have. Or you can see what your buddies have and compare.

It doesn't have as much depth as Xbox 360's achievements, which has possibly 50+ achievements for each game, but it does give you a neat way to walk around a room and admire just how much time you've sank into playing video games.

Although PlayStation Home probably won't be a big enough feature to actually sell the console by itself, it may just be one of many features that Sony's adding to make it quite tempting to even non-gamers, a segment the Wii seems intent on dominating. – Jason Chen