In the cut-throat games world only the fittest survive. As the three old enemies square up to each other on the high street, Edward Power looks at what they offer and who is likely to win

It promises to be one of the fiercest battles fought this Christmas - three bitter adversaries vying for dominance of a €27 billion global industry that has come to rival the movie business in its scale and attrition rate.

With 41 million units shifted worldwide, Sony's Playstation 2 (PS2) console is the uncontested champion, an ageing bruiser arguably lacking some of the technical wow-and-flutter of its competitors but commanding fierce - almost fanatical - brand loyalty and a selection of games of unparalleled breadth and inventiveness.

The feisty challenger is Microsoft's Xbox, a lugubrious hunk of black plastic which, for all its undeniable processing power and an estimated €500 million marketing budget, has struggled to challenge Sony's pre-eminence, shipping just 3.7 million units since launching in March.

Languishing at the back of the pack is the Nintendo Gamecube, an ambitious challenger hobbled by indifferent promotion and potentially terminal image woes.

This is a mortal struggle - the history of video gaming is littered with the corpses of failed consoles and ruined developers. It is probable that the console wars will claim at least one fresh victim over the next 18 months. Manufacturers ship units as loss leaders, relying on healthy follow-through game sales for profits. Sluggish new year revenues could prove disastrous, especially for the two seeking to topple Sony from its pedestal.

Combat will be particularly brutal on the Irish high street. We rank among the world's most fervent video-gamers, claiming one of the highest level of console ownership outside of Japan and purchasing more video games per capita than any other state in Europe.

To date there has been little doubt where our loyalties lie. The Republic is a nation in thrall to the PS2, and its boundary-breaking predecessor, the PS1. Sony has sold 650,000 consoles in Ireland - one for every five people - and, having lopped €30 off the price of a PS2 last quarter - hopes to shift at least 100,000 this year. But with Xbox receiving ecstatic word-of- mouth approval from hardcore gamers and retailing for €20 less than the PS2, it is becoming evident that Sony's hegemony is under threat here for the first time since PS1 debuted in the mid- 1990s.

Despite their superficial similarities, the three consoles betray the widely diverse ethos of their manufacturers. Having achieved pre-eminence on the back of an extraordinarily slick marketing campaign (art-house darling David Lynch oversaw its early commercials), the PS2 has honed an edgy, streetwise image equally enticing to hip twentysomethings, attention-deficient 10year-olds and middle-aged anoraks.

Xbox is a brasher, more callow proposition. Developed by the Seattle computer colossus at a cost of several billions (Microsoft refuses to give a precise figure), the console's somewhat unwieldy appearance masks a progressive machine with the number-crunching heft and graphic capabilities of a mid-range PC.

After receiving a critical hammering when it launched, Xbox has staged a fightback (thanks largely to the consistently high quality of its roster of titles) and looks set to carve out an enduring fan base over the longer term.

In contrast, Nintendo, the sole survivor of the first generation of consoles, which emerged in the early 1980s, continues to tread water and is thought unlikely to pose a significant challenge to its competitors this Christmas.

Although it was founded in the late 19th century as a producer of playing cards, the Japanese company remains fatally linked to its most celebrated creation, Super Mario Brothers, and has struggled to find favour among mature gamers, whose patronage proved essential to the success of Sony in particular.

It doesn't help that, unlike the Xbox and PS2, the Gamecube cannot play DVDs.

Side by side with this conflict, a second, equally intense, tussle is taking place. Games developers are scuffling for a slice of the burgeoning global video game market. Many of the top challengers take to the field armed with lucrative - and costly - tie-in products. This year's roster of heavy-hitters includes offerings based on the James Bond, Lord of the Rings and Harry Potter films.

The stakes are every bit as high as those facing console developers - current PS2 chart-topper The Getaway cost an estimated €5 million to market and develop, prompting some commentators to speculate whether it will ever recoup its overheads.

The recent defection of top British developer Rare to Microsoft notwithstanding, there is little doubt that gaming houses continue to favour Sony. It is easy to fathom why - PS2 titles account for the 10 best-selling games in Ireland, with only two Xbox offerings denting the top 25.

With less than a fortnight left until Christmas, it seems clear that the PS2 will remain Ireland's console of first choice; retailers in Dublin report the Sony machine outselling Xbox five to one. However, most are bullish about Xbox's 2003 prospects and suggest it may eventually undermine Sony's dominance.

"The Xbox is doing better than we anticipated. It is selling nowhere near as well as the Playstation but it has definitely established a presence," said the owner of one Dublin video game retailer who declined to be identified.

"People believe in Microsoft. They feel it is dedicated to the long-term development of the Xbox and that there is no danger of the supply of new games drying up."

While revenues are not likely to eclipse last year, when a last- minute infusion of pre-euro "mattress money" fuelled a late consumer frenzy, demand remains extraordinarily brisk, one industry commentator said.

"Playstation 2 has the edge because it has the widest audience - from teenagers to people in their 40s. The Xbox seems to appeal to hardcore gamers - those who might already own a Playstation and want to check out its rival. The Gamecube is mainly being bought by parents. It is seen as a toy and in the long run that could prove to be its downfall."