Prior to the launch of the PlayStation 3, if you were to ask a gamer what the system's biggest titles would be, the answer would be simple: Metal Gear Solid 4, Killzone 2, and Final Fantasy XIII. These were to be Sony's killer apps for this generation, the games that would firmly entrench the PS3 in the living rooms of the legions of gamers that had made the PS2 the bestselling console of all time.

Both Metal Gear and Final Fantasy franchises were strongly identified with Sony; they had helped the PS1 crush the Nintendo 64 and had played a crucial role in the PS2's early success. Killzone hadn't been as big of a hit, but its sequel generated immense hype thanks to its notorious E3 trailer from 2005. Sure, the price tag was at a hefty $600, but price be damned; this was a PlayStation, and the PlayStation brand doesn't fail.

However, Microsoft had other ideas, and at their 2006 E3 media briefing they revealed that Grand Theft Auto IV would launch simultaneously on both the Xbox 360 and the PS3. The announcement signaled to the industry that Microsoft was serious about eliminating Sony's stranglehold on exclusives. If they could take PlayStation exclusives and turn them multiplatform, they could weaken those franchises by making them secondary titles – that is, titles that don't factor into the consumer's decision to purchase a console due to their universal availability.

That could only mean good things for the 360. Gamers who were looking to play GTA no longer had to buy a PS3 and were free to go with the cheaper 360, stealing away many of Sony's would-be customers.

Microsoft had succeeded in taking away one of Sony's crucial franchises, and it wouldn't be the last time they did such. During E3 2008, Square Enix revealed that Final Fantasy XIII, long thought to be Sony's untouchable exclusive, would be launched on both the PS3 and the 360. Although it wasn't the kind of "megaton" announcement that it would have been ten years ago, it still had huge implications; namely, it meant that Final Fantasy has lost its strength as an IP. No longer can Final Fantasy be considered a killer app, for its lack of exclusivity has abolished its status as a system seller.

That's not to say that it has lost its strength relative to other IPs; Final Fantasy XIII will sell very well, but it will in no way be a system seller; rather, it will be a next-generation seller. Final Fantasy will no longer dictate which console gamers choose to purchase. So, which company benefits from the weakened IP?

Once again, it's Microsoft. As more and more last-gen gamers make the jump to a newer console, they're going to look at price and exclusives as the deciding factors for which one they choose, especially since GTA and now Final Fantasy are available regardless of what they purchase. With a stronger library of exclusives and the lower price point, the 360 is in better shape to win over the consumer.

This isn't just limited to marquee franchises; anytime someone wants to play a third-party game that's available for both consoles, it makes the most sense to go with the 360 version because of the price and primary games available. Why would you spend more for the PS3 when you can play the game on the 360 for less and also have access to great exclusives? This is Microsoft's true advantage in this generation; their superiority in the third-party arena makes it difficult for Sony to stay in contention.

So how does Sony compete? If they want to avoid a knockout blow, they're going to need two things: a cheaper console, and a meaningful exclusive. Games like LittleBigPlanet are innovative, but they aren't true system sellers. Metal Gear is a big franchise, but its sales have declined from what they were in the PS1 and PS2 era. Killzone has yet to show that it can move units. Sony has to make the PS3 a value to the consumer while offering a true killer app, otherwise they're destined to finish behind Microsoft.