Next month the most eagerly awaited gadget of the year finally arrives in the shops — a mere 12 months late. Scheduled for release in Europe on March 23, and costing £425, the Sony PlayStation 3 (PS3) is touted as the most powerful console yet. And in a sneak preview InGear has been able to put one through its paces.

The stakes are high for Sony. The company remains tight-lipped about the development costs of the PS3, but analysts put the figure conservatively at £1 billion. That is a lot of money for a games console. However, in the UK alone there is plenty of opportunity for Sony to reap the fruits of its investment; our games market is the third largest in the world, with £1.36 billion worth of games sold here last year.

What makes the PS3 so exciting is that it isn’t a one-trick pony merely for playing games, but is an entertainment powerhouse that will store and play back your music or movies. You will be able to download directly onto a PS3 (or transfer music from CDs) and showcase digital photographs. Better still, the PS3 comes ready to play high-definition (HD) movies thanks to its Blu-ray disc player — one of the two new HD disc formats aiming to replace the DVD.

At the heart of this machine lurks Sony’s much-trumpeted new Cell processor, which helps it create those hotly anticipated next-generation graphics. However, the PS3 also boasts an impressive 60GB hard drive and is the only console with an HDMI socket, which offers top-notch video and audio through one digital cable.

So, despite the mighty price tag, the PS3 has huge potential, and is tipped to become the dominant console platform over the coming years. Retailers are scrambling to secure as many of the 220,000 machines allotted to the UK in March as they can. There were reports of gamers fighting when the console made its American debut. The success or failure of the PS3 won’t be determined by how many gamers queue overnight for the first batch, however, but by how many units Sony shifts in the first year.

So what is the PS3 like to handle?

The gleaming black box is surprisingly easy to set up.

Unlike the Xbox 360, its rival from Microsoft, there’s no huge power supply to hide, and once connected with HDMI cable it cleverly optimises itself for your television. Switch the PS3 on and you notice how silently it runs compared with an Xbox. Even when you begin to play games or watch movies, it proves far quieter than some DVD players.

The rest of the set-up process is straightforward other than the need to enter details for the built-in Wi-Fi, which is a bit of a faff. Once it’s up and running you can easily search the contents of the hard drive using software similar to that on Sony’s handheld PSP. Music, photos, movies and downloaded games are all neatly organised, and accessing them is intuitive and slick. Pick a folder of photos, for instance, and you enjoy an animated slideshow of its contents, each shot mapped onto a realistically curled 3-D print and gently tossed onto a moving background. Plug in an MP3 player — sadly not an Apple iPod — and you can browse or play tracks as if they were stored on the PS3. The same applies to memory cards plugged into slots at the front.

On a good screen, movie playback is jaw-droppingly impressive. High definition videos, whether played back from the PS3’s Blu-ray disc or stored on the hard disk, are rich in vibrant colours and full of crisp details.

Nevertheless, the PS3 will live or die by its gaming performance (see right). These are early days, but the 30-strong launch lineup includes big names such as The Elder Scrolls IV: Oblivion, Splinter Cell: Double Agent and Need for Speed: Carbon. True, these have all appeared on the Xbox 360 and PC, but the PS3 versions are allegedly enhanced. On current evidence there’s little difference in the experience of playing a PS3 and a 360, so the PS3 sorely needs more big exclusives in the way that the Xbox has Gears of War and the forthcoming Halo 3.

The PS3’s wireless controller worked superbly, but felt lightweight and dated compared with the Xbox 360’s or the innovative Nintendo Wii remote. The rumble effect has also disappeared, and the tilt-sensitivity feature is poorly used thus far, certainly compared with the Nintendo.

Furthermore, the PS3’s online options compare badly with Microsoft’s slick Xbox Live, which is far better integrated with the 360, although Xbox Live costs from £40 a year while Sony’s is free.

Apart from its well documented problem of making enough PS3s to begin selling them, Sony’s bigger headache is the cost of the components; it is expected to lose about $100 on each PS3.

As a result Sony is playing catchup in the next-generation console market and is saddled with a hefty price. Meanwhile Nintendo’s Wii has been doing well — outselling the PS3 four to one in America — since its release in December 2006. Microsoft has shifted 10m Xbox 360s and has, crucially, snapped up key game developers to supply exclusives.

Most seriously for Sony, the Xbox 360 is £150 cheaper than a PS3, with a further cut widely expected, while the Wii is a mere £179.

Sony insists that the PS3 will have a 10-year lifespan and prove to be good value for money. There is some truth in this. Sony has kept the PS2 alive for seven years while Microsoft dumped the original Xbox after just four.

The PS3 is a deeply powerful games console and home-entertainment hub, but the cheap-as-chips Wii and the widely respected Xbox 360 deliver far more gaming bang for your bucks. The PS3, however, could be a shrewd long-term investment because of its greater gaming potential and Blu-ray drive. The promise depends largely on whether Blu-ray takes off, and the calibre of exclusive games.

MOTORSTORM – £50

This off-road racer is a PS3 exclusive and the jewel of the launch lineup. Unlike any previous driving title it sees players bike-racing against buggies, or in a 4x4 trying to catch up with and then batter the far nippier bikes. It is thrilling, with an astounding variety of gameplay and packed full of mud-splattered carnage.

FIGHT NIGHT ROUND 3 – £50

The PS3 version of this stunning boxing game boasts only slightly improved lighting and sweat effects compared with the Xbox 360 edition, and features a new first-person mode. This isn’t actually that much fun compared with the classic mode, but it does show that some effort has been made to update rather than merely rehash this game.

RESISTANCE: FALL OF MAN – £50

Here’s another PS3 exclusive that takes place in a grim alternate reality in which horrifying creatures have taken over the world. Resistance is a decent, high-intensity first-person shooter with innovative alien weapons and a cool 1950s sci-fi setting. However, it’s not really a system-selling game.

Cyberathletes play hardball for millions

David Phelan tries his console hand against the professionals

I’m being pummelled by a blonde bombshell named Valkyrie while her scantily clad friends stand by, laughing. And my terror and confusion are obvious as I’m chased, panting, through the darkened passageways of a casino vault. For 20 minutes Valkyrie metes out all manner of humiliating punishment on me, and when it’s over I’m just glad to be still standing.

The violence I’ve experienced was on a computer screen, but it still hurts. Valkyrie — whose real name is Amy Brady — is part of a growing number of top professional “cyberatheletes” who travel the world playing in high-stakes computer game tournaments for prize pots of tens and even hundreds of thousands of dollars. And she certainly had my number as we played Rainbow Six: Vegas on the Xbox 360.

Although still a minority pastime in Britain, gaming is multi-million-dollar business in the US and the Far East, where there are numerous professional leagues and hundreds of events each year. The top players receive lucrative sponsorship deals from hardware manufacturers.

I’m in Las Vegas at the World Series of Video Games to see it first hand. In a giant tent filled with scores of computer monitors, eager competitors play each other at a host of kinetic, high-action games; huge plasma screens show what’s happening. Brady is part of an all-female gaming team called the Frag Dolls who are taking on all-comers, crushing a steady stream of male players under their stiletto heels — virtually speaking.

Wannabe professional gamers can choose either to play in a team (known as a clan) or as a so-called “free player”: this is where the greatest amount of money and prestige is. The Frag Dolls formed three years ago, having been exposed to computer games by their boyfriends. They were the first all-female team to win a tournament on the pro circuit but it has taken some time to earn the respect of fellow male gamers. “Guys would say ‘get back in the kitchen’ or ‘go and make me my coffee’,” says Brady. “Winning, especially against some of those chauvinists, is a pleasure and a validation.”

After my thrashing I glance up to see half a dozen geeky men glaring at me with bitter envy as I sit in their fantasy scenario: tightly surrounded by drop-dead gorgeous girls — who play games.