We reported earlier today about Sony Playstation Home that will launch some time in 2008. If Sony does everything right it will be huge for the Sony PS3. I actually think Microsoft cannot afford to not launch a similar 3D virtual world for the Xbox 360.

Microsoft's Xbox 360 is loosing more and more coolness points. It all started with not having HDMI on the first generation of Xbox 360 consoles. Because Microsoft chose not to integrate a high definition drive inside the Xbox they came out with an HD DVD drive, which is now worthless as HD DVD died last week.

So what is left besides Halo 3 and arcade games? A console that looks pretty old already compared to the Sony PS3. Sure you could argue that high definition movies can be delivered online and Blu-ray is not necessary for the Xbox 360. In my opinion downloading high definition video is still not feasible for many users due to bandwidth limits. Movie discs will stay with us for a very long time. You could also say that it is all about games and not about media when it comes to game consoles, just look at the Wii. That is correct in many ways, still if you can have all, state-of-the-art media and great games, it is the best of bread solution.
Playstation Home could just put Sony even further ahead, unless Microsoft keeps up and enhances their currently standard setting Xbox Network to offer 3D virtual world interface – it should not be that hard, it is like Halo 3 without weapons.

Last October there was already some rumor about Microsoft working on a 3D virtual world. Daniel Schiappa, general manager of strategy for Microsoft’s entertainment and devices division is supposedly leading the effort.

It will be interesting to watch what Microsoft will pull out of their hat this year to hold the Sony PS3 back from achieving a major success.