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Deja Vu for Sony PS3 Launch

15 Mar, 2006 By: John Gaudiosi

Just as Microsoft is finally righting its ship after an Xbox 360 launch that saw only 607,000 hardware units shipped to the United States last year between the Nov. 21 launch and year's end, Sony is heading in the same direction.

The leading game maker, which owns about 60 percent of the $60 billion global gaming business, is gearing up for a nearly simultaneous worldwide launch of the PlayStation 3 in early November in North America, Europe and Japan — a feat that Microsoft tried, but ran into serious supply problems after generating so much demand.

While a date has not been formally announced, Sony Computer Home Entertainment president Ken Kutaragi said there would be 1 million PS3 hardware units available at launch — a number that will have to be shared among the three territories.

That means that, without any production glitches, there will only be 2 million hardware units available worldwide by year's end. Kutaragi said there would be 6 million hardware units available by the end of Sony's fiscal year, March 31, 2007.

This translates to d?j? vu at retail this Christmas, as Sony will hype its new console and demand will be high (it's been building since last year's E3 show). Expect those consumers who get a PS3 to make a killing on eBay, just as early Xbox 360 owners did.

Kutaragi blamed the delay of the PS3, which was scheduled to ship in spring to Japan and was expected to ship in September to the States, on lengthy copy protection standardization talks with Hollywood studios on new Blu-ray technology and high-definition multimedia interfacing. Analysts also expect that the delay was to ensure that Sony has enough launch titles in place. About 10 games are expected at launch, although Sony has not confirmed a number of launch titles.

Sister company Sony Online Entertainment (SOE) announced that Untold Legends: Dark Kingdom will be a PS3 launch title in November. The game, which will sport high-definition graphics and 7.1 Surround Sound, is a fantasy action role-playing game that expands on the world introduced on PSP last March with Untold Legends: Brotherhood of the Blade.

Dark Kingdom also will feature online gameplay with the ability to adventure alone or with your friends through multiplayer modes as well as delivering content post launch through the PlayStation 3 system's online service,” said Michael Lustenberger, VP of marketing.

While Sony has left the online gaming world open for publishers to do as they please with PS2, the company is steering the PS3 into similar online waters as Microsoft's Xbox Live. Kutaragi called the new digital distribution service “PlayStation Network Platform (PNP),” and said it will be free and available at launch this November. The service will support voice chat, matchmaking lobbies for games and a marketplace (similar to Xbox Live's Xbox 360 Marketplace) that lets users download content, including software.

More specifics should come at this year's E3 show, but analysts expect Sony's online gaming network to expand beyond games — if not at launch, then as early as 2007. Sony has already announced a new Connect.com service for PSP that will include game downloads, music and such video offerings as TV shows, music videos and movies. The same digital distribution model could be applied to PS3 via PNP.

To support this type of network, Kutaragi said PS3 will require a hard drive, which would turn the entertainment console into a central server for the home. Gamers could upload media from one peripheral and view it on another. PS3 will also connect to PSP in new ways. Sony has already launched its Location Free TV device that connects to PSP in a Wi-Fi home to allow playback of movies and TV shows. PS3 could easily expand such connectivity.

Sony did not reveal prices for PS3, although analysts expect the hardware to retail for about $500. Microsoft was able to offset the $400 price of Xbox 360 by shipping a stripped-down $300 version without a hard drive. Sony has not said whether a disc drive would be included in PS3, but it could follow Microsoft's model by offering a more affordable console minus the hardware. The only problem with this, as Microsoft learned last year, is that the early adopters and hardcore gamers want the hard drive and don't care about the extra price.

Sony is expected to keep next-generation game pricing around the $60 mark, which Microsoft has established with third-party Xbox 360 games. Sony games will likely remain at $50, which is the pricing Microsoft used with its own internally developed games.

The Competition

Sony's PS3 is expected to bow around the same time as Nintendo's Revolution, which will be a lower-priced console. Nintendo has said its next-gen system will be in the United States before Thanksgiving. The console will feature broadband connectivity that lets gamers download games from Nintendo's previous consoles. While pricing has not been announced, Revolution is expected to offer the most affordable hardware and software pricing.

Microsoft's slow start can be corrected in the extra months the PS3 delay has afforded the company. Microsoft has sold more than 1 million Xbox 360 consoles through Feb. 25, 2006, in the U.S. Microsoft is expected to have 5 million Xbox 360s shipped worldwide by June, so the extra months give the software giant more time to sell its hardware.

With Sony PS3 hardware expected to be in short supply, and with the potential of Nintendo facing hardware shortages as well, this Christmas should see retail shelves well stocked with Xbox 360 hardware and games.

Microsoft is already targeting a younger demographic with its next-gen console.

The company has teamed up with 4Kids Entertainment to release Viva Pinata, a kids' game developed by Rare that will be launched as part of 4Kids Entertainment's Saturday morning programming on Fox. The 3-D animated TV show will be accompanied by merchandising that will help generate awareness for the Xbox 360 exclusive game.

One advantage Sony does have over its competition is the PS2, which Sony will continue to support over the coming years. While Microsoft has already bailed on Xbox, Sony will support PS2 with new games. The company is expected to drop the $150 price of PS2 later this year.

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