When it comes to reaching gamers, the XBL environment is in most cases the better choice for brand marketers. Although in both environments users generally have to seek out branded content, offerings available on XBL allow brands to take over a user's interface without disrupting the user experience, and without competing with the actual games for users' time and attention.
The branded theme, gamer pics and destination page Sprite put together for this year's Sprite Slam Dunk Competition is a great example. Once users apply the branded theme, they (and any friends they invite over to play) are exposed to the brand every time they power up their 360. In contrast, the branded experiences on Home, while potentially more engaging, (this online Red Bull Air Race, for example) puts the brand in direct competition for gamers' time with full-length PS3 games, which is a difficult fight to win.
Another major challenge for Home is the problematic user experience. The online community has been enormously critical of the initial launch of PS3 Home. Penny Arcade's Jerry Holkins suggested that users would "get the sense that this is a place in which no interesting thing could ever happen," and that's a relatively restrained example of the gamer-rage expressed over its launch.
One of my (and every marketer's) New Year's resolutions should probably be to stop saying something "is king" to highlight its importance, but for marketers who want to get involved in games, user experience is king. You can't create an entertaining and worthwhile branded destination inside an experience that's fundamentally broken, as many users suggest Playstation Home is.