Ok, here's my allmightly analyst
Xbox 2 coming out before Ps3 is a risk, but it may be worth taking. This generation Sony has proved that the past has nothing to do with the industry today... or does it.
Sony had:
1) Hard development
2) No 1st/2nd party support for the launch
3) The worst graphics/loading times
4) Competition who had don'e most things on the hardware side better.
Guess what? With all it's flaws it still came out on top. Here's Justin's explination of why:
The most obvious reason it is coming out on top is the introduction of DVD players within the system. Gekko, you may think it had no effect on US, but it had a HUGE effect. The DVD player alone justified the purchase of a Ps2 for parents, and the games justified it for kids. Dreamcast missed it's oppritunity with this feature, and that's why it failed to beat Ps2.
Even Xbox and GCN can't compete with the built in DVD player. with Xbox you have to spend $30 to get the remote to activate it, and with the cube you have to go out and spend $100 on a new full feature DVD player. Not enough people had DVD players in late 2000-early 2002 to call this feature a negitive. Now it's extremely popular, and Sony just dropped the price.
Then there's that little thing called trust for the company.

Psx's greatness rubbed off a lot on this console... almost too much, but people seem to trust sequals more than new games.
The thing about Next generation is... the DVD player will be a non-factor. It will be back where it was in the Psx N64 generation, all about the games.
Now that this fact is clear we go back to the question again: Should Microsoft release it's console first?
(Note: I'm concentrating on the US Market, because that's where Xbox 2 will be released first most likely.)
Sony and Sega in the past took the same risks (releasing before the last gen champion). Sega took the risk 3 times. The first time they tried (in direct competition) against SNES, and ended up winning over US. The second time they weren't so lucky. Sporting a $399 price tag and harder development, and no new innovative features to show for it they fell victim to Psx's $299 tag extremely easy development and mass appeal through the name "Sony"... the third time, they release DC early in one of the most obvious attempts to make some quick $$$ before the "real" generation began. Of course once again, they get squished by Sony because of a serious lack of developer support (hell they didn't even have a single EA game, not many consoles can say that) and a lack of fan support because of the let down of saturn the generation before.
Now the question stands, will Microsoft be a Sega or a Sony... Maybe a little of both. Has there ever been a console to come out last and take the US in sales? Nope, never. SNES couldn't do it, N64 didn't do it, and GCN won't do it. So that tells you the security in coming out last for a generation. Coming out first hasn't been to sweet either, as Saturn and Dreamcast sufferd a horrible failure.
Here are a mixed bag of reasons why Dreamcast and Sega Saturn failed and if or if not Xbox can solve this problem:
[b]1) The console creator didn't have enough money to push the console more than 2 years.[b] (
this is true for both DC and Saturn)
Can it be solved?
Yes:
*looks around* Where is Microsoft's profit for this generation? Nowhere. Microsoft isn't out there to make a profit very fast, they are out to spend as much money as it takes to get thier foot in the door of the industry. If a company like Microsoft made Dreamcast (assumin they developed as well as Sega) it would still be alive today,
AND in most of our homes. Good games are good games, nothing can change that. Microsoft would have been able to weather the late 2000 storm, get some quality titles out, and forced hardcore gamers to buy a DC at a $100 (or less) price tag. They will be able to do this with thier own console, no doubt.
2) Hard development prevented developers from supporting the console in full (
This is true for Saturn)
Can it be solved?
Yes:
Now-a-days, it isn't hard to make a development kit that is easy to develop on. It just takes that little extra effort. Are they willing to give this extra effort? Hell yeah, well, if they want a chance in hell at winning next generation.
3) Small userbase stopped many developers from supporting the console (
This is true for Dreamcast, and Saturn after one year mixed with the expensive development)
Can it be solved?
Most likely
You have to remember, this generation isn't over... if Xbox completly flops (which I can't see happening anymore) Developers won't be running with open arms. But then again, Developers weren't running to Xbox either. But money can pursuade a lot of developers to change thier minds.
4)The console started off stuck with a equal higher price than the immediate (same generation) competition (
True for Saturn)
Can it be solved?
Depends on the competition
If Microsoft releases thier console first, I'm sure they would make enough bones at thier starting price to lower it in time for Ps3's US launch. If they don't, they just didn't learn anything from the past. If Sony keeps ducking thier price, or acctually releases a price efficent system like Psx (doubtful, but possible), M$ may have to stick with the higher price.
5) Last but not least, the console had to be the weakest of the contending consoles in it's generation (
true for Saturn and Dreamcast)
Can it be solved?
You tell me
Ok, here's a scenario. MS is US based, right? So they release thier consoles in US first. While Sony is Japan based, meaning they kick off in Japan first. If The Japan Ps2 and the US Xbox are released the same day, it IS possible that M$ can get away with releasing a console earlier with better visuals. It sounds crazy, but it's true. All in all, they could possibly release an easier to develop for console, with better graphics, games, and a completed online gaming service before Sony even comes to North America!
Am I saying they will do this? No, but it is most definently a possibility.
Kinda sounds like Dremcast right? But it's not, for one it would have much better third party support. Also, the graphics would really be better, just not a bunch of Sega fanboys lying to themselves in the DC Era.
So all this I wrote leaves one question to be desired: Should they release thier console first?
In my opinion, if they do everything right, and release it first, and have M$ backing it for at least 5 years financially, we could be looking at probably the best console of all time. But remember, they have to do everything right... if they are going to make some mistakes, being the first out the gate isn't a smart move at all. Just take the delay and fix the mistakes.
I seriously could never imagine Sony ever falling victim to another console ever again if Sony keeps getting thier foot out the gate first. The generation champion is allowed to make mistakes while being the first out the gate... Sony could announce Ps3 for next year and make it horrible and chances are it will still have a domination run.
I honestly believe Dreamcast had the best chance of taking down Sony this generation, but we all saw how well that went. Dreamcast was near perfect, but it just wasn't. It had a couple of flaws that premitted Sony to slice thier throats.