Posted by: Kenji Hall on September 6, 2006
The technorati might have seen it coming. Yet again, Sony’s video games guru, Ken Kutaragi, has confessed he can’t deliver on his promise for a full-scale launch of the PlayStation 3 game console. This time, he’s chosen to push back the sales date for Europe because of an inadequate supply of blue lasers for the machine’s high-definition Blu-ray DVD player.
He’ll be out of the competition in Europe during the critical yearend holiday shopping period, letting Microsoft’s Xbox 360 and Nintendo’s Wii capture market share there. He’ll also be short on supply. Instead of producing 4 million consoles by December, he’ll only have 2 million. In recent weeks, there’d been reports of possible shortages of key components—all repeatedly denied by Sony. Its rivals must be beside themselves with glee now.
Kutaragi, who’s delayed the PS3 twice, knew he’d botched things. “I feel sorry. There are many people who have high expectations for the PS3,” he told reporters in Tokyo today. It’s the last thing Sony needs: Its image in the PC industry has taken a hit in recent weeks amid a recall of millions of Sony-made lithium-ion batteries used in Dell and Apple laptops.
The good news is that the delays won’t embarrass Sony before its main target audience in the $25 billion gaming market. Kutaragi said the Nov. 11 release in Japan and Nov. 17 kick-off in the U.S. were still on. He also said Sony would ship 6 million consoles to retailers worldwide by next March.
It's hard to tell just how much this will cut into Sony's finances. The company is already absorbing a nearly $900-million loss this fiscal year from its games division alone. Its pledge of getting 6 million units on store shelves in the console's first five months appears to be an attempt to assuage jittery investors and skeptical analysts that it can meet its own revenue targets for the current fiscal year. Sony better hope this is the last of the surprises. It's already got one heck of a PR debacle on its hands--and the fight hasn't even started yet.