Games: 360 has the library. It has more games because it had a one year headstart. Also it is easier to develop for. The ps3 is catching up though. Developers are beginning to grasp what can be done and how to do it on the ps3. Look at the games that are coming out over the next few months and you will see that most blow 360's games out of the water. LittleBigPlanet alone is an example of a game that only the ps3 can handle. One of the reasons for this is ps3's games are on blu-ray discs which holds 50gb of information. I believe 360, which uses standard dvd's, tops out at 7gb if that much. 50gb can hold a lot which means special features in addition to game play.
Video: Both play dvd's but the ps3 also plays blu-ray. At the moment blu-ray is the best that you can get as far hi-def goes. It gives you full 1080p which is the highest def currently available. You need a 1080p tv to utilize it but the option is there. Now if you can find one there is an hi-def add-on that you can buy for the 360. Good thing about it is you can get one for less than $100. Bad thing is they stopped making movies in that format back in February or March so you will have a very limited library to choose from.
On-line: PS3 is free, 360 is $40 to $50 a year. Now 360 does have the better on-line experience but they have been doing it longer than ps3. Give the ps3 time though. Do a search for Playstation Home. You'll see what I mean by give the ps3 time.
Operating System: The ps3's OS can be changed without voiding out the warranty. I have Linux running on mine at the moment.
Web Browser: Don't know too much about 360's but the ps3 just received flash 9 so now video can be watched from sites like Hulu.com. I have been watching episodes of Heroes on nbc.com and they play perfectly.
Reliability: The ps3 has a failure rate of about 1-3%(give or take). The 360 is closer to 33% I believe. Not sure about the numbers. Do a search for "red ring of death" and you will see what I mean about the 360's failure rates.
Price: Right now you can get the 360 arcade system for $199. But it doesn't include a built-in hard drive. Personally I would prefer paying more for a hd. They do have the elite and the pro but you still won't be getting the blu-ray player, free on-line or true hi-def.
As far as I am concerned there is no question that the PS3 IS THE BETTER SYSTEM. Its more expensive but you get more in return. And no matter which 360 system you get you are still looking at adding another $50 a year over the initial price.
pros- full hd (need full hd tv to get this)
built in blu ray player.
very large hdd
internet capable
free online game playing (networking)
Cons- not any amazing games specifically for ps3
expensive
Xbox 360-
Pros- cheap
excellent games (halo, gears of war)
cons-xbox live-£40 a year
not as reliable as ps3 (red lights)
can play dvds but not hd dvds unless add on bought (hd dvds have lost the format war anyway)
not internet capable
Conclusion-
Ps3 way better-
PS3-$400
the reason why PS3 cost more is because it is better. Better graphics and it has a built in blue-ray dvd player...
games are good. and online is free and great.
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