Yesterday, Reuters reported that AOL, a division of Time Warner (NYSE:TWX), will launch AOL Ladders, a competition service for use with the Sony (NYSE:SNE) PlayStation 2 console.

In partnership with eUniverse's Case's Ladder, AOL Ladders allows members to seek out opponents in online chat rooms or by instant messenger, compete, and climb the "ladder" of PS2 players. AOL members would essentially get Case's Ladder's basic $19.95 service for free, with the option to upgrade.

According to Reuters, Sony expects the service "to launch this year, once they release the hard drive for the PS2." Among the first games available on AOL Ladders will be Electronic Arts' (NASDAQ:ERTS) Madden 2004, Sony's SOCOM II, and Activision's (NASDAQ:ATVI) Tony Hawk's Underground.

None of this is completely new. Microsoft (NASDAQ:MSFT) Xbox owners who subscribe to Xbox Live enjoy some of these capabilities. For example, if you are playing Project Gotham Racing 2 while connected to Xbox Live, your score is compared with other player's scores every time you race. You can also download somebody else's race and compete against their "ghost."

Likewise, somebody playing Sega's ESPN NHL Hockey can hook with other players through Xbox Live and compete over the Internet. That player's record is maintained over Xbox Live, and you can see your opponents' records. Anybody who owns the game and has access to Xbox Live can also see the leaders board.

One key difference is that Microsoft owns Xbox Live and manages its servers, while Sony won't. In other words, PS2 online users have separate accounts with the individual game publishers -- such as EA and Activision -- rather than directly with Sony, which gives EA the incentive to promote its own online service for the more widely owned PS2, while leaving Xbox owners in the dark. For example, EA games and Tony Hawk are PS2 online capable, but not Xbox Live compatible.

What AOL Ladders really adds is a means for players to form online leagues and manage their own tournaments, which is what many see as the next step for interactive gaming. Eventually, the leagues could be pay-to-play, and an online cash cow.

Talk online gaming on the Video & PC Games discussion board -- only at Jeff Hwang can be reached at