Atari founder predicts PS3 failure

He also expressed fondness for Microsoft's online strategy, saying, "Xbox Live is interesting because it potentially becomes the platform for the living room."

But the tuned changed to a less positive note when it came to PlayStation 3.

"I think Sony shot themselves in the foot… there is a high probability [they] will fail. The price point is probably unsustainable. For years and years Sony has been a very difficult company to deal with from a developer standpoint. They could get away with their arrogance and capriciousness because they had an installed base," Bushnell said.