E3's biggest loser? It's Sony. They've been lagging behind for years overall, but to lose at hardware, their strongest suit? What a pity.
Look at all three companies that define the industry. Microsoft is a software company, so Xbox has the best software and services, like Xbox Live, Zune and Windows Media Extender. Nintendo is fundamentally a games company, so they make the best games (or at least, the greatest quantity of amazing, if iterative games). Sony is a consumer electronics company, so they excel at hardware: The PlayStation 3 is defined by Blu-ray and its Cell processor; the PSP blew out the DS in terms of specs, not software. Raw hardware power.
So how the hell has Sony lost the hardware race two years running at E3? Squandering their most valuable brand, PlayStation, is a spectacular failure that doesn't bode well for a glorious return to the Sony of old.