The Giant Segmented Mirror Telescopes (GSMTs) including the Giant Magellan Telescope (GMT), the Thirty Meter Telescope (TMT), and the European Extremely Large Telescope (E-ELT), all have extreme adaptive optics (ExAO) instruments planned that will use pyramid wavefront sensors (PWFS). The ExAO instruments all have common features: a high-actuator-count deformable mirror running at extreme speeds (>1  kHz); a high-performance wavefront sensor (WFS); and a high-contrast coronagraph. ExAO WFS performance is currently limited by the need for high spatial sampling of the wavefront which requires large detectors. For ExAO instruments for the next generation of telescopes, alternative architectures of WFS are under consideration because there is a trade-off between detector size, speed, and noise that reduces the performance of GSMT-ExAO wavefront control. One option under consideration for a GSMT-ExAO wavefront sensor is a three-sided PWFS (3PWFS). The 3PWFS creates three copies of the telescope pupil for wavefront sensing, compared to the conventional four-sided PWFS (4PWFS), which uses four pupils. The 3PWFS uses fewer detector pixels than the 4PWFS and should therefore be less sensitive to read noise. Here we develop a mathematical formalism based on the diffraction theory description of the Foucault knife-edge test that predicts the intensity pattern after the PWFS. Our formalism allows us to calculate the intensity in the pupil images formed by the PWFS in the presence of phase errors corresponding to arbitrary Fourier modes. We use these results to motivate how we process signals from a 3PWFS. We compare the raw intensity (RI) method, and derive the Slopes Maps (SM) calculation for the 3PWFS, which combines the three pupil images of the 3PWFS to obtain the X and Y slopes of the wavefront. We then use the Object Oriented MATLAB Adaptive Optics toolbox (OOMAO) to simulate an end-to-end model of an AO system using a PWFS with modulation and compare the performance of the 3PWFS to the 4PWFS. In the case of a low read noise detector, the Strehl ratios of the 3PWFS and 4PWFS are within 0.01. When we included higher read noise in the simulation, we found a Strehl ratio gain of 0.036 for the 3PWFS using RI over the 4PWFS using SM at a stellar magnitude of 10. At the same magnitude, the 4PWFS RI also outperformed the 4PWFS SM, but the gain was only 0.012 Strehl. This is significant because 4PWFS using SM is how the PWFS is conventionally used for AO wavefront sensing. We have found that the 3PWFS is a viable WFS that can fully reconstruct a wavefront and produce a stable closed-loop with correction comparable to that of a 4PWFS, with modestly better performance for high read-noise detectors.