2007: A year in review, July

The spats and squabbling in June looked set to continue into July with news that the Universal Music Group, the world's biggest music corporation, had told Apple that it would not renew its annual contract to sell music through iTunes.

Universal, which is said to produce one in three of every album sold in America, opted not to pull its catalogue from iTunes, but determined only to sign up for a month-to-month rolling contract rather than agreeing to be locked into a longer deal.

Brinkmanship followed with both sides facing a huge loss - Apple a chunk of music and Universal, 15% of its revenue - but there were no comments from either side.

Meanwhile Microsoft held up its hands and said sorry over 30% failure rates in its Xbox 360s.

The company acknowledged that the problem had reached "unacceptable" levels and announced a 3-year warranty extension at a cost of around $1 billion.

Hardware failures were being signalled by the telltale red flashing, the "red ring of death" around the console's power button.

Microsoft said it would replace Xbox 360s for free in those cases, and will refund anyone who had had to pay out for repairs.

Meanwhile, despite vehement denials just weeks beforehand, Sony launched a slimmer and lighter PSP.

The main new feature of the streamlined device, the "PSP Slim & Lite" was a video-out port.

Sony stayed in the headlines announcing a deal with Sky offering PSP owners in the UK and Ireland the opportunity to watch video on demand and on the move.

The deal, which is expected to launch early next year, will allow millions of PSP owners to turn their device into a personalised library of programmes to enjoy whenever and wherever they choose.

Access to content will be available either on a subscription or pay-per-view basis.

Next up was the news of an 80GB PS3 to be launched in the US in August.

And at the same time, the company confirmed it was to slash the price of its 60GB model by $100.

But over in the UK, gamers were told that they would be offered no price reduction.

Outrage followed which was not placated by a free games and accessories deal.

The price will remain the same, Sony insisted, at that whopping £425 mark for the 60GB machine, but lucky UK gamers would get two games and two Sixaxis controllers included in their bundle which were claimed to be worth £115.

But UK gamers kept their fingers crossed as Sony had told our friends in the US the same thing - the price is right -just days before dropping it.