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Microsoft (NASDAQ:MSFT) announces a huge $1 Billion charge to take care of obvious xBox issues. A reported 35% failure rate was causing some credibility problems. Sony (NYSE:SNE)should have been able to deliver if not the knock out punch than a damn good knock the wind out of your lungs jab to the solar plexus.

Instead senior Sony executives first say no price cut. One week later they announce a price cut and also announce a new bigger and better version PSP. The communications problem has focused attention on the price cut reversal and away from the relative merits of what could be a relatively exciting new product.

From a marketing point of view Microsoft is in the drivers seat. They have acknowledged the problem and now everyone wants to see how they handle it.

Sony recently dodged a bullet from the Church of England because of a violent game set in Manchester Cathedral. If the church had sued for intellectual property infringement because of unauthorized use of one of their iconic properties they may have had more success in shutting down Sony.

Microsoft acts like a major religion so they probably will not have comparable problems. That is why Microsoft will do much better than Sony. Their product sins were worse but they are better at contrition and acts of penance. Sony will carry the burden of arrogance.

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