Robbie Bach, former president of Microsoft's Entertainment & Devices Division, says Xbox 360's success is partly down to Sony's mismanagement of the transition from PS2 to PS3.
Speaking at the Northwest Entrepreneur Network (via GeekWire), Bach said it was vitally important for companies to capitalise on their rivals' mistakes.
"Some of the success of Xbox was due to the fact that Sony did some really not so smart things," he suggested. "They mismanaged their 70 percent market share. It's a long conversation.
"The transition to PlayStation 3 was really, really bad. And really hard. They mismanaged their partners, they mismanaged their cost structure. They made their next platform so complicated that developers couldn't develop for it."
Another factor in Xbox 360's success was Microsoft's ability to strike up strong partnerships with publishers like EA and Activision.
"When you're doing a startup, you need friends," Bach said. "It's just the way life works. It turned out we were able to convince retailers and publishers like Activision, Electronic Arts and others, that it was a good thing for Microsoft to be successful, because if we were not successful, the only game in town was Sony. Being dependent on somebody else was bad for them, and so they supported us disproportionately to what they should have, mathematically."
Bach also described the infamous Xbox 360 'Red Ring of Death' hardware failures, which cost Microsoft $1 billion in warranty extensions, as "the most painful thing in my life".