Sony's PlayStation 3 delayed until November
By Mike Snider, USA TODAY
Sony is postponing the release of its next video game system, the PlayStation 3, until early November, the electronics giant announced today. The high-powered game system, which will double as a player for new high-definition Blu-ray DVDs, will come to market in the U.S., Japan and Europe simultaneously. No official date or price was announced.
Originally, the PS3 was to be launched in the first half of the year in Japan and later in the USA. But speculation had grown recently that development cost and complications, particularly in the Blu-ray format, would lead to delays.
"When we originally announced our plans to launch this spring, we had expected the standardization work on all of the technologies to be completed by last August, but there were improvements that were decided on since then," said Ken Kutaragi, president of Sony's video game division. He made the announcement at a hastily called news conference in Tokyo Wednesday after reports of the delay surfaced in Japanese papers.
The PS3 is expected to incorporate not only next-generation HD video playback, but also high-speed Net connections, backward compatibility with previous PlayStations and the ability to work with Sony's handheld game system PSP.
Sony is still trying to finalize Blu-ray copyright protection and other technologies. "I'd like to apologize for the delay," Kutaragi said. "I have been cautious because many people in various areas are banking on the potential of the next-generation DVD."
The announcement comes at a time when the video game industry is slumping, in part because consumers are buying fewer games for current systems in anticipation of the arrival of the PS3 and a new system from Nintendo, the Revolution — not to mention Microsoft's Xbox 360, introduced in November and still hard to find.
Sony expects to be able to produce 1 million PS3s each month, a figure that sounds large, but will pale in comparison to demand around the world, says Richard Doherty of The Envisioneering Group. "It's going to make the Xbox 360 scramble of last year look like a picnic."
Few industry observers were surprised by the announcement, because the high-definition video format has been repeatedly delayed. "The PS3 is more than just a Blu-ray player," Doherty says. "In a sense, it is like a more powerful video source than digital cinema today."
The PS3 will output high-definition video in a higher-resolution form than the first Blu-ray players that are expected in the market in May. So Sony and the supporting movie studios have reason to be concerned about its security, Doherty says.
In effect, Sony's game division has blamed the delay on the company's home entertainment division, says American Technology Research analyst P.J. McNealy. "The delay in of itself wasn't surprising. It was more Sony trying to get the message right. You'd almost expect Sony Pictures to announce the delay of shipping Blu-ray movies to the fall."
Adding to the delay was the ability to produce mass quantities of the PS3's new Cell processor, developed by Sony with IBM and Toshiba, which is touted as 10 times more powerful than current PC processors. "It wouldn't be ready to put into boxes this summer," McNealy says. "And Sony wanted to give developers more time to make a memorable game for launch."
But the delay gives Microsoft months longer to build on the installed base of Xbox 360s. "There has been a credibility gap with both platforms coming out really later than we thought," Doherty says. "Six months ago, nobody thought there would only be 1 million Xbox 360s (in the USA) at this point."
However, Microsoft has to be taking satisfaction in Sony's struggles, McNealy says. "I think they are smirking because now you see Sony struggling when the Microsoft folks have said, 'This is not a simple thing to do,'." he says. "And secondly, you see Sony breaking from tradition and going with a worldwide launch, following Microsoft's lead from last fall. I think Microsoft feels like they are driving Sony."
Not to be forgotten is Nintendo, which has not given launch specifics for its Revolution beyond late 2006. "This puts more pressure on Nintendo to do a multiregion launch," McNealy says. "If they weren't planning it two days ago, they are probably considering it now. The timing for Nintendo is going to be tricky because they don't want to be too far ahead of the PS3 and have people hold out on the Revolution because the PS3 is coming. And they don't want to go head to head with the marketing budget of Microsoft and Sony in November."