In a large interview with Eurogamer, former Xbox 360 head Peter Moore revealed details of the Microsoft and Sony confrontation in the era of the seventh generation of consoles. According to him, Microsoft feared that Sony was about to monopolize the home entertainment market.
Microsoft, and in particular Bill [Gates]... were afraid that Sony would take over the living room. It seems a little silly now, but back then Sony was firmly entrenched in the home entertainment market: TVs, Blu-ray, music players. And Bill and Microsoft's top managers feared that their company would be locked in the office and on desktops as a software manufacturer.
To seize the initiative, Microsoft launched the Xbox 360 in November 2005 — a year earlier than the PS3 (November 2006). The goal: to be the first to reach 10 million users, creating a «flywheel effect» — when friends buy a console to play together. In addition, the Xbox 360 launched cheaper: about $400 versus $600 for the PS3, which was a serious blow to Sony in the price war.