Microsoft has hit back at Sony's Kaz Hirai claiming the PS3 is the "official" industry leader, but branding the company "out of touch".

Director of product management at Microsoft, Aaron Greenberg also described Sony as "an old hardware company that's comfortable with its market position".

"This generation won't be won over just hardware specs, but who can out-innovate when it comes to online and software", Greenberg added.

"This is the kind of stuff that's in our DNA, and frankly moves the console war onto our home court".

Greenberg referred to recent numbers that suggested the Xbox 360's install base was 7 million more than PS3 in the US, and added that he can't imagine "any scenario where PS3 can catch up with us".

"In fact, even if you doubled the current PS3 sales and the Xbox 360 remained flat, they couldn't close the gap until 2014", Greenberg said, obviously having done his homework.

A PS3 price drop would certainly help Sony's console, and go someway to improving its sale figures. Whether we'll see one this year though, remains to be seen.