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International International: Sony prepares for big game battle

International: Sony prepares for big game battle

Author | exchange4media News Service | Monday, Nov 13,2006 8:50 AM

International: Sony prepares for big game battle

The doors at Bic Camera’s main Tokyo store are due to open earlier than usual on Saturday morning to welcome what its managers hope will be a long line of avid gamers waiting to claim their PlayStation 3.

The discount electronics retailer is trailing an appearance by Ken Kutaragi, the head of Sony Computer Entertainment and father of the PlayStation.

It also plans to have a countdown to 7am, when the PS3 – Sony’s most important launch in years – finally hits the shelves.

Both the PS1, launched in 1994, and PS2, which followed in 2000, have sold more than 100m units worldwide – but the festive Bic Camera event seems destined to be a rarity.

For all the hype that has surrounded new Sony video games consoles in the past, Saturday’s launch in Japan looks set to be a decidedly unspectacular affair.

When the PS2 came out “it was mayhem, it was like the second coming”, says Hiroshi Kamide, analyst at KBC Securities in Tokyo. But there is no comparable buzz surrounding the PS3.

Advertising by Sony in Japan has been subdued and media coverage spotty.

Sony itself has no plans for champagne corks to pop, either at its flagship store in Tokyo’s downtown Ginza shopping area or Sony Computer Entertainment’s flashy offices in the trendy neighbourhood of Aoyama.

The low-key debut of Sony’s most important product in recent years highlights the challenges facing the electronics-to-entertainment group as it struggles to live up to the expectations it has built up for its latest games console.

PS3 is critical to Sony’s revival and a pivotal test of Sir Howard Stringer’s tenure as chief executive.

Welsh-born Sir Howard – who has no experience in consumer electronics but has vowed to revitalise Sony’s struggling electronics division – desperately needs the PS3 to succeed.

But it already has yielded its fair share of problems. Sony’s games division is set to post a loss of Y200bn ($1.7bn) next year due in large part to costs associated with the PS3.

Mr Kutaragi, who was once considered to be a contender for the top job, will also face serious questions about his future at Sony if the new console fails to become a runaway hit.

Sony has already stumbled with its PlayStation Portable, the handheld console that was the company’s answer to the phenomenally successful Nintendo DS, but which has failed to live up to expectations.

The PS3 – which Mr Kutaragi famously dubbed the “Ferrari” of video games – will indeed have more firepower than any of its competitors. Analysts say that the PS3’s graphics quality is incomparable, and it will also allow users to download music and video from the internet.

The problem is, “there just aren’t enough quality games for people to get excited about, the price is not right and there aren’t enough consoles to go around”, says analyst Mr Kamide.

Retailers complain that they are also facing a dire shortage of consoles after Sony halved its initial shipments from 4m to 2m because of problems with manufacturing.

Tokyo-based branches of the dedicated games shop AsoBitCity posted signs explaining to customers that it would have just 20 units for sale in each of its stores.

The discount electronics retailer Llaox has made a conscious decision to avoid having any big PS3 launch events. “That might fuel expectations, which could be dashed,” says an employee.

Retailers also blame the high price for the PS3’s relatively subdued reception.

Sony cut the price of the lower specification 20 gigabyte model in Japan by Y10,000 to Y49,980 ($425). But that is still higher than Microsoft’s XBox 360, at Y29,800 and Nintendo’s Wii, which will cost just Y25,000 when it hits the store shelves next week. The PS3’s 60 gigabyte model will be even more expensive.

Sony is also facing fierce competition from Nintendo and Microsoft. Nintendo has staged a spectacular comeback with its handheld DS console, and is poised to continue that success with Wii, its new console for the living room. “Wii is ahead of PS3 in terms of pre-launch reputation,” says Kazuharu Miura, senior analyst at Daiwa Institute of Research in Tokyo.

Many gamers are saying that the PS3 only offers higher specifications and beautiful graphics, but the Wii offers games that are more fun, Mr Miura says.

The Wii will have 31 software titles and 30 downloadable games available when it is launched on November 19, against PS3’s 21. And 14 of the 21 PS3 titles are not exclusive to the PS3, but are multi-platform, notes Mr Kamide.

Meanwhile, Microsoft is launching Blue Dragon, a title made in Japan, which was developed by the creator of the long-running hit, Final Fantasy. Blue Dragon will be packaged with the XBox 360 at no extra cost.

But such spoilers may not be the biggest of the headaches that are confronting Sony. As the delays to the European launch and the shipment cuts which were announced in October indicate, the PS3 is a difficult machine to manufacture – even for a company that prides itself on its manufacturing excellence.

The laser diodes used for the Blu-Ray high-definition disc player incorporated in the PS3 are awkward to mass-produce.

Consequently, the bigger question is whether Sony will be able to manufacture even the 6m units it wants to by next March, says Mr Miura, who calls the target a “best-effort figure”.

Given the company’s recent problems with overheating lithium ion batteries, which led to a global programme of battery replacements, Sony may need to keep the champagne for the PS3’s celebrations on ice for some time yet.

Source: The Financial Times

Tags: e4m

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