.]While Microsoft has been on fire for the past eight months, Sony's good fortunes appear to have run out. It is the only platform holder with three systems still actively being sold, two of which are no longer meaningfully contributing to the market. The third, the flagship PlayStation 3, is saddled with a $300 entry-level price that is killing its mass-market appeal.The venerable PlayStation 2 has finally ceased to be relevant to the industry's new retail sales, where it accounted for only 1.5% of all hardware unit sales in January and a mere 0.7% of software revenue. (If we're more generous and look only at consoles, then its software share rises to 0.8%.)While the NPD Group will likely continue to track the system's sales at retail for years, we expect that even analysts will cease to comment on it in the coming months.The PlayStation Portable, or PSP, has also fallen on hard times, although the circumstances are very different. According to comments made by Wedbush analyst Michael Pachter, the system's hardware sales were down about 24% from January 2010, pegging January 2011 sales at around 76,000 units.Pachter also noted that software sales for the platform were a mere $10 million in January. That's around 12% of console software revenue, or 1.7% of the overall video game software market.While our focus here is on the U.S. retail market, we should note that the PSP continues to do exceptionally well in Japan. Regardless, the U.S. PSP market appears to be on a terminal trajectory.We expect that it will end its run in the American market with lifetime sales of just over 20 million systems, a remarkable achievement for Sony's first true gaming handheld venture. For context, Sega's GameGear had but a fraction of the PSP's sales while neither Microsoft's original Xbox nor Nintendo's GameCube reached 20 million systems in the U.S.Which leaves Sony with one active platform, the PlayStation 3. And while the system is still coming down off the surge in sales created by the PS3 Slim launch and price cut, its software sales have continued to grow. Consider, for example, the curve below, analogous to the similar curves for the Xbox 360 and Wii produced in the NPD article The blue hardware curve shows that the official launch of the $300 Slim in September 2009 immediately drove the annualized rate of PS3 hardware sales to a peak a year later. During that 12 months, PS3 sales reached 4.91 million systems.However, hardware sales growth ended with the anniversary of the Slim price cut and have declined ever since. Sony can reverse this trend at any time, with a price cut. We would favor one as soon as April of this year, while Wedbush's Pachter has said he expects a cut in June.A price cut of $100 would be game-changing, and we would expect Microsoft to immediately respond with a cut of their own. However, we feel that a $50 cut (to $250 for the low-end PS3), is probably more realistic.While Microsoft has Kinect to thank for at least some of its current momentum, it is very difficult to argue that Sony has gained any such bump from its Move control system. The camera and wand combination launched very softly in September 2010, with a few Move-specific titles and Move-compatibility updates for others.Since that time, no Move-required title has made it into the top 10 software. The biggest Move-compatible title in the near term will probably be Sony's ownwhich we expect will chart when the February 2011 results are released.According to data provided by the NPD Group, the top-selling Move-required title in January 2011 was, a game in which the Move controls are used for fist fighting. Withsales of only 16,000 units for the month, we can conclude that all other Move-required titles had similarly low sales. That list includes titles like Sony's, and Ubisoft'sPut another way, Kinect'sprobably outsold the combined total for Move-required titles in January 2011. This doesn't address the titles with Move-compatibility patches likefrom 2K Sports, but it can't be easily established to what degree consumers are buying that title for its Move features.Of course, part of this speaks to the size of the Move hardware installed base. One straightforward measure we can take is the number of PS3 systems sold with Move bundled in the box. Judging from what Michael Pachter has said, we believe that those system bundles are in the neighborhood of 500,000 units since Move launched.Specifics of accessory data are closely held information, and we can merely speculate about how well the standalone Move systems have sold. Were we wildly optimistic about Move sales (which we aren't) we'd estimate that 1 million PlayStation 3 systems are Move-enabled as of the end of January 2011. The actual figure is probably well below that.While Move may not be living up to Sony's hopes, the PS3 software situation continues to improve. Even as hardware growth has fallen, PS3 owners have maintained the momentum in software, as shown in the annualized rate graph above. More than that, however, Sony has a strong slate of software for all of 2011.The first big PS3 release of the new year is, a proper sequel to the 2008 platformer and editing title,. After its memorable reveal at GDC 2007, the originallaunched in October 2008 with sales of only 215,000 units. By the end of November 2008, total sales had reached 356,000 units The NPD Group has revealed that sales of 353,000 copies ofduring January 2011, nearly matching the first game's two-month total. In just the period around launch, the sequel has reached roughly one quarter of the original game's 1.47 million units in sales. (That originalfigure includes the original 2008 release and the 2009 Game of the Year edition, but not the PSP version.)With a steady stream of exclusives in 2011, including, and, Sony is making a strong play for consumers this year. If it can reach a price that will renew interest in its hardware, we should see each of these titles do well in 2011.