As delay talks of the PlayStation 3 debut grow day by day, Sony seems to have cracked under the pressure. On a Japanese web site, [a]http://www.sankei.co.jp/news/060225/kei050.htm[aa]Sankei Web[/a], a Sony spokesperson is quoted as saying, ‘There is a possibility of delay . . .’ The site goes on to report that Sony has admitted that there could be a delay with the release of the PlayStation 3 citing problems with mass production of the PS3’s Blue-ray drive. The postponement conjecture gained most of its doubters after a report from Merrill Lynch which can be found at [a]http://www.msnbc.msn.com/id/11458047/[aa]MSNBC[/a]. According to MSNBC, ‘if industry specifications for some of [Sony’s] technology are not finalized soon’ the PlayStation 3 could be delayed. It was also reported that a spokeswoman for Sony Computer Entertainment said that the company was waiting for final specifications on some of the technology used in the PS3 such as input and output video sound, and the Blu-ray DVD drive. The spokeswoman added, ‘We’re aiming for spring, but we haven’t announced specific regions. We’re waiting for them until the last possible minute, but the launch could be pushed back if their not decided soon.’ Takeshi Tajima, a BNP Paribas analyst said, ‘Game makers are developing games according to their guesses on what the final specifications might be.’ It is also speculated by many, that Sony will not be able to make PS3 systems in large enough volumes to satisfy customer demands.
Sony’s shares fell by 4.4 percent last week, after Merrill Lynch predicted that the system’s launch date could possibly be delayed anywhere from six to 12 months past the vague ‘spring 2006’ launch projection. It was also estimated that the initial production cost of each PlayStation 3 could reach $900 per unit. Console manufacturers usually sell new game systems at a loss initially in order to gain market share, and they in turn make money by their software sells which is a $25 billion global market. With the high production forecast though, Sony may have to take a much bigger loss on each unit in order to stay somewhat even with Microsoft on the retail side of things, with the Xbox 360 premium package selling for $400.
The article went on to state that, ‘Sony currently has about 70 percent of the global market for game consoles, but some analysts say it could loose as much as 20 percentage points to Microsoft, which is making an aggressive push to increase its 15 percent share.’ It is also worth noting that Nintendo has a 15 percent market share as well. ‘Merrill Lynch also down graded its rating on Sony to ‘sell’, from ‘neutral’ saying in its notes that Sony could see its earnings decline in the business year from April.’
Yuta Sakurai, a senior analyst at Nomura Securities, approximated that Sony would charge 50,000 yen ($420) for the system. Estimates in Japan about the retail cost of the PS3 range from 40,000 yen to several times that much. The large differentiation in projected costs is mostly due to the cutting edge technology in the console. The PS3 will be powered by the ‘Cell’ chip, and feature a built-in Ethernet port for high speed internet access, Blu-ray DVD technology, and the ability for up to seven people to play at once. Sankei Web also quotes Enterbrain president, Hiokazu Hamamura, as saying ‘If Sony hasn’t started taking orders for the system by now, it would be difficult for the company to launch the PS3 in May.’
[i] -Travis Johnson[/i]
