Highlights from Sony's show 

Two days before their E3 conference, Sony had announced a $100 price drop for the 60 GB PS3. The console had been suffering less-than-stellar sales compared to it's competitors since launch... mainly because of the lack of exclusive titles and a higher than usual price tag. 

With the price issue (somewhat) out of the way, the only hurdle that remained for Sony was to grab exclusive titles for the platform, that is what their E3 conference was mostly about.

The star of the show was Killzone, the game had stirred up a lot of controversy mainly because of the pre-rendered trailer that Sony had claimed to be real-time. The footage shown at the E3 conference, while not coming even close to the original CG shown way back, was quite impressive and was arguably on par with other graphics milestone games like Gears of War.

Along with the new 80 GB model for the PS3, a new slimmer and lighter version of the PSP was announced, with new capabilities including video-out. Sony stated that the platform would have 140 new games coming out for it this year.  The "Ice Silver" model will retail for $199.

 Numerous exclusivity announcements, including Haze and Unreal tournament 3 being timed exclusives for the PS3 (However, UT3 will be on the PC at the same time, leaving the 360 version in the shadows... which is what Sony probably wanted anyway).  Popular PC MMORPG publisher NCSoft announced a deal with Sony to be developing exclusive MMORPG titles for the PS3 as well. Lastly, Sony also re-iterated that Metal Gear Solid 4 would be exclusive to the PS3 (despite numerous rumours stating otherwise).

Demos of 'Home' were shown, functionalities would extend to users' mobile phones and 3D avatars.

Numerous trailers were shown, including a new MGS4 trailer (no gameplay, however) and the aforementioned debut in-game video of Killzone 2.

Konami's Hideo Kojima came to present Metal Gear Solid 4, which he said would complete the story of Solid Snake. He also said it would be his last time making a game in the hallowed franchise. The game will be seeing a worldwide release in "Early 2008".

The conference ended with the Killzone footage along with video proof of a person playing the game in real-time.