Microsoft believes its Xbox 360 will have an advantage over the competition because it will be launched much earlier. They say that Sony is focusing a lot on the hardware part when the importance should be given to the software and services.
They would be launching their Xbox 360 before the end of the holiday season at the end of the year. This is the time where gaming consoles sell at their best with parents picking up consoles for their kids.
Nevertheless Sony and many other critics believe Sony's PlayStation 3 has a good chance to become the biggest next-generation console. More info at TechWhack