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European PS3 Launch Subdued

27 Mar, 2007 By: John Gaudiosi

Sony Corp.'s PlayStation 3 kicked off March 23 in Europe with some special events, but not nearly the fanfare seen at the U.S. and Japanese launches.

The 120 customers at the Virgin flagship store on Oxford Street in London who waited in line for the midnight launch were rewarded with free 46-inch Sony Bravia HDTVs, as well as copies of the shooter, Resistance: Fall of Man. The TVs will be sent to the PS3 buyers within a week.

This move was an attempt to generate some positive press for PlayStation 3 after Sony had been chided for the high price point of the console, the three-month delay and the removal of the PlayStation 2 chipset for the playback of older games. But it was also a way to try to generate interest in HDTVs in the United Kingdom, which is lagging behind the United States in sales. Only about 15% of U.K. homes have HDTVs, compared to 25% of households in the United States.

Many of the customers who did wait in line at Oxford received a free chair from Microsoft. The chairs had a Web site address that welcomed Sony to the next generation race, even if they were late.

Chart Track reports the console sold 165,000 units over its opening weekend, making it the U.K.'s fastest-selling console ever. Sony sold three quarters of its 220,000 total U.K. stock, according to trade paper MCV. That compares to 105,000 units for Nintendo Wii's opening weekend in December and 70,000 units of the Xbox 360 its debut weekend in December 2005, the paper reports. Sony's new console didn't overtake the U.K.'s fastest-selling gaming hardware, Sony's PSP, which sold 185,000 units its opening weekend.

Sony held only one official midnight launch, but about 50 HMV stores were open at midnight, selling about 1,000 PS3s. The average transaction price for PS3 hardware and game purchases was 600 pounds.

There were several breakfast events at retailers such as HMV later that morning, in part to avoid the shootings and thefts that occurred at some U.S. launch events. Those events attracted about 300 customers each. Sega was at the HMV breakfast event to hand out 150 copies of Virtua Tennis 3 to people buying a PS3.

Throughout Europe, the crowds never quite accumulated like they did in Japan and the United States for PS3's launches last year.

In France, there were more members of the media than actual customers at Sony's launch event near the Eiffel tower. Sony had a retail ship on the Seine river to sell the first PS3s at midnight, but few people showed up. Microsoft had its own boat, decked out in Xbox 360 logos, riding up and down the river in site of the media. In addition, several retailers throughout France were open at midnight, but the crowds weren't there.

Germany had mixed crowds at launch events. In Berlin, there were a couple hundred people at the Sony Centre store for a midnight launch event. One Saturn electronics store in that city gave away 50 free PS3s to customers that smashed their Xbox 360s against a wall.

In other cities across Europe, there wasn't much enthusiasm for the new console. Amsterdam had only a handful of gamers show up to a launch event, while Prague had more than 100 people show up for a midnight PS3 launch in the Czech Republic.

In Australia, 500 stores were open at midnight, but attendance was sparse. A Sony store in Sydney had only 80 buyers show up for the launch event. But thanks to huge pre-order numbers of more than 20,000 PS3s, Sony sold more than $25 million Australian in hardware, software and accessories in its first three days. In contrast, Nintendo sold almost 33,000 Wiis in its first four days after launch, according to tracking firm GfK. Microsoft sold just over 30,000 Xbox 360s in its first four days. Sony had sold more than 27,000 PSPs in its Australian launch. PS3 sells for $1,000 Australian, compared to Wii ($322 Australian) and the top Xbox 360 bundle ($650 Australian).

European analyst Todd Greenwald at Nollenberger Capital Partners estimated that Sony will sell 500,000 to 700,000 PS3s throughout Europe at launch, rather than the 1 million Sony had forecast. Greenwald estimates that Sony has already sold 1.1 million PS3s in the United States, compared to 2.2 million Xbox 360s and 1.9 million Wiis.

Anaylsts at J.P. Morgan predict that Sony will sell between 60 million and 65 million PS3s over this life cycle, compared to 100 million Wiis and 40 million to 45 million Xbox 360s.

In other PS3 news, Goldman Sachs analyst Yuki Fujimori said that Sony may cut the price of its console by $100 worldwide in October. He said that historically, the cutting of hardware prices has quadrupled sales. The price of components for the PS3 will come down, allowing Sony to slash the price. By comparison, when Sony launched PlayStation at $300, it had 700 internal components; by the time it was selling for $50, it had 200 components. PlayStation 2 launched at $300 with 2,000 parts and the current slim model, which retails for $130, has only 600 parts. Fujimori expects Sony to halve the 4,000 parts of PS3 by October, allowing for the price drop. This follows earlier press reports from Japan in March that cited Sony was planning to introduce cheaper microprocessor chips for PS3 in an effort to cut its price.

Price has been a major reason that PS3s are currently readily available in U.S. stores, and it's been a factor throughout the European launch. Some customers overseas have purchased the PS3 as a Blu-ray Disc player, because it is currently the cheapest player on the market. That won't change this summer, when Sony launches its new $600 BR-D player. A $100 price drop in October would bring the high-end PS3 down to $400, which is the same price as the high-end Xbox 360. Of course, Microsoft is expected to counter with price cuts. Nintendo is doing fine with its $250 Wii console, which continues to fly off shelves in every country. And that console is the only one that ships with a free game.

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