Don't Count PS3 Out of the Race

Posted by jgaudiosi :: Industry Trends

Ps3_9Never underestimate the power of the PlayStation brand. While things currently look bleak for Sony, which has received a constant barrage of criticism surrounding PlayStation 3 since it announced its $600 price point, things are looking up for the next generation device. First, the Yankee Group recently predicted that Sony would win the next generation console war by 2011. Sony is expected to sell 30 million PS3s by then, compared to 27 million Xbox 360s (despite the 12 month head-start that Microsoft has had) and 11 million Nintendo Wiis. While this would give Sony the lead in the race, it's a close margin of 44 percent to 40 percent. Sony currently has a 60 percent market share of PS2 compared to Xbox and GameCube, so that head-start does help Microsoft in this forecast.

Sony Computer Entertainment America President Kaz Hirai recently told Gamespot that Sony will match, if not surpass, its current market share with PS3. The president said he wants to retain at least the same amount of market share that PS one and PS2 has had in the gaming business, and he does not want to cede any of that lead to Microsoft or Nintendo. Although PlayStation 3 has not gone into production yet, Hirai everything is on track for the November 17 launch.

Hirai said that while the PlayStation Network Platform will launch November 17 with the console, the addition of TV, movie and music content likely won't come until later. Rather than launching with Sony-only content, Hirai said Sony is talking with other music, movie and TV studios about offering content via digital distribution.

On the PSP front, Hirai said there will not be a price drop for PSP from $200 this year. He also said that the Sony Connect Web site, which will allow gamers to download music, movies and TV shows to PSP, is still under construction. Like PNP, Sony is working with multiple partners to offer different content for download.

Hirai said that while some Hollywood studios will still support Sony UMD, others can opt to distribute movies via other methods, like memory sticks. Over the past few months, many home video studios have dropped out of the UMD movie market. Sony Pictures is one of the few studios supporting the device.

According to some analysts that I've spoken with, consumer interest in PS3 is still very high, despite the price point. It should be noted that Sony is expected to drop that price once consoles are readily available. The PlayStation brand and the Blu-Ray Disc functionality are expected to give Sony an edge over Microsoft and Nintendo over the coming years.

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