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Sony Shares Drop on Report PS3 Delayed Until November (Update1)


March 15 (Bloomberg) -- Shares of Sony Corp., the world's biggest video-game console maker, fell as much as 2 percent after the Nihon Keizai newspaper reported that sales of the PlayStation 3 will be delayed by about six months to November.


The stock fell 1.6 percent to 5,480 yen as of 10:40 a.m. in Tokyo, compared with a 0.6 percent gain in the Nikkei 225 Stock Average. The Nihon Keizai said Sony hasn't resolved details on a copy protection format for its DVD player, preventing a planned release this spring. Sony Computer Entertainment Inc. spokesman Daisuke Nakata declined to comment on the report.


Sony would be a year behind Microsoft Corp., which released its latest Xbox 360 console in the U.S. in November 2005. The PlayStation 3 features the Sony's Blu-ray high-definition DVD technology and its fastest processor ever, forming a key part of Chief Executive Howard Stringer's strategy to use entertainment businesses to spur sales of consumer electronics.


``The delay is negative, and the more important question is when they can start sales in the U.S.,'' said Kazuharu Miura, an analyst at Daiwa Institute of Research in Tokyo. ``The Xbox 360 already had one run at the holiday sales last year, and if Sony can't get the PS3 out before year-end, they'll end up ceding two seasons worth of sales to Microsoft.''


Sony Computer Entertainment President Ken Kutaragi will speak at a media conference in Tokyo about its PlayStation business today at 3 p.m. The company last month said a postponement of the PlayStation 3 couldn't be ruled out.


``The November launch appears to be only for Japan,'' according to Dominik Maeder, an equity sales trader at HSBC Holdings Plc's brokerage unit in Tokyo. ``Given Sony's track record, you can kiss the overseas Christmas launch goodbye.''


`Hill to Climb'


With the PlayStation 2, Sony missed out on the 1999 year-end shopping season to Sega Enterprises Ltd.'s Dreamcast game machine. Still, the PS2 was launched in March 2000, 18 months ahead of Nintendo Co.'s GameCube and almost two years ahead of Microsoft's first Xbox, and outsold all three consoles.


Sony's first two PlayStation video game consoles are best- selling in the world, with more than 100 million units sold each.


``If they slide too far, they'll find themselves in the same situation as the Xbox did when they launched the PS2 a year before we entered,'' Craig Mundie, Microsoft's chief technical officer, said in an interview from Singapore yesterday. ``That's a hill to climb.''


Merrill Lynch & Co.'s Tokyo-based analyst Hitoshi Kuriyama wrote in a report last month that the PlayStation 3 launch may be pushed back to autumn in Japan and 2007 in the U.S., because of reasons that included delays in video chip production, heat emissions problems and a shortage of games.


High Costs


The PlayStation 3 will come will be compatible with the Blu- ray disc, which can store at least five times more video, audio and computer files than standard DVDs. The console's Cell chip will also make the PS3 about 35 times faster than its predecessor.


The console will cost about 74,000 yen ($633) to make, with the Cell chip and Blu-ray accounting for more than half of the costs, and Sony will probably sell it for 44,800 yen in Japan and $399 in the U.S., Kuriyama said.


That compares with the Xbox 360's $399 tag for a console with a hard-disk drive, and $299 for a unit without a drive. Sony's PS3 will not come with a hard-disk drive, which can be used to store music, movies, and other computer files.


``There clearly would be a huge risk with a delay,'' said Stephen Hall, who helps manage the equivalent of $572 million at Britannic Asset Management in Glasgow, Scotland. ``The fact that the PS3 will include the Blu-ray disc and the Cell chip will also increase the actual production cost of the unit.''


The Blu-ray will have to compete with Toshiba Corp.'s high- definition DVD format, which can store at least four times more data. Microsoft backs Toshiba's HD DVD format and Chairman Bill Gates last year said future versions of the Xbox 360 may support the HD DVD format.


Format Doesn't Matter


``It remains to be seen whether the PS3 will be regarded as an entertainment hub, which Howard Stringer wants to do,'' said Amir Anvarzadeh, director of Japanese equity sales at KBC Financial Products in London. A possible delay is ``a hindrance. People want the PS3 to come out regardless of what the media is. They don't care if it's Blu-ray or HD DVD.''


Sony on Jan. 26 forecast an annual profit, reversing a loss forecast, on sales of Bravia televisions and PlayStation Portable video-game players. Sony posted a record 168.9 billion yen ($1.4 billion) profit in the October to December quarter, triggering a 14 percent gain in its shares the next trading day.



To contact the reporter on this story:

Daisuke Takato in Tokyo at dtakato@bloomberg.net

Last Updated: March 14, 2006 20:41 EST

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Sony Delays Playstation 3 Launch


The release of the much awaited PlayStation 3 (PS3) games console has been postponed until November, Japanese electronics group Sony has announced.

Technical hitches related to the console's Blu-ray disc drive had forced the delay, Sony said.


Sony games chief Ken Kutaragi said they were still finalising agreements on disc copy protection technology.


Sony had been aiming for a spring launch for the successor to best-selling PlayStation 2.


The news was announced at a hastily-convened news conference, after reports of a delay appeared in the Nihon Keizai Shimbun, Japan's main financial daily newspaper.


The reports had triggered a 1.8% drop in Sony's shares to 5,470 yen ($46.56; ?26.67) on the Tokyo market.


The PS3 is one of three new gaming consoles promising cutting edge processing and graphical power.


Sony has said the console will ship with a 60 GB hard drive and will play games created for both the PlayStation 1 and 2 at higher resolutions than the original. No potential price was given for the console. :)


It will compete with Microsoft's Xbox 360, which went on sale late last year in the US, and Nintendo's Revolution, which is due later this year.


Worldwide release


So far Sony has dominated the market for home consoles, with its original PlayStation and PlayStation 2 having sold more than 200 million units.


It had originally planned to release its new machine in the spring. But instead it is now talking of a November release in Japan, the US and Europe simultaneously.


In the past, Sony has staggered the launch of new consoles, with Europe coming a belated third.


"We are absolutely delighted that we will be able to bring PS3 to gamers in Europe and Australia before Christmas," said David Reeves, head of Sony Computer Entertainment Europe.


"This is an exciting first for Europe, and is a huge endorsement and vote of confidence in the strength of the European market and its importance globally."


The delay means Sony's machine will not be in the shops in the US and Japan until a year after the Xbox 360, giving Microsoft a valuable lead in building up its market share.


A problem with the launch of the console could be a major setback for the company which is struggling to revive the performance of its consumer electronics division.


In an effort to revive its fortunes the firm has undergone a major restructuring drive involving 10,000 job cuts and 11 factory closures.


Sony's performance in the $25bn games industry is set to be one of the key factors determining the success of the firm's turnaround this year.

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I wish these dickheads would get their story straight. Still, I won?t be buying one just yet. If it can be hacked like the original XBox (with a multitude of utilities making it the best media server known to mankind), then possibly. They really fooked it up with Gran Turismo 4 which is possibly the most disk intensive game I?ve played since abandoning my old Amiga 500. Absolutely fooking infuriating. If they can fix that problem and make it a decent media server............ then maybe.

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I think the problem here is that they are promising all things to all people to keep themselves in peoples minds. I bet even now they haven't decided on the final specs HDD etc...


As for GT4 you're right mate - that game put me off the franchise, I can't bring myself to finish it - what a cock up !

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I think the problem here is that they are promising all things to all people to keep themselves in peoples minds. I bet even now they haven't decided on the final specs HDD etc...

It wouldn?t surprise me. What also wouldn?t surprise me (after the CD rootkit debacle), would be for Sony to place a unique identifier on each machine that announces its presence when connected to the internet. Much like the Pentium 3 chips way back many moons ago. If I ever bought one of these things, the last thing I?d be doing is letting it run unsecured on a network.

As for GT4 you're right mate - that game put me off the franchise, I can't bring myself to finish it - what a cock up !

I dragged it out again a few days ago and it drove me nuts. Like you, I can?t bring myself to finish it. A great game ruined by shonky programming.

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I too have given up on GT4, and I was looking forward to the bastard for a year before it's release. Apparently Sony is doing something right on a different note, they aren't planning to downconvert the new HD video signal from Blu Ray discs when sent through analog connections ie. component cables. This would make all the first generation HD TV's incompatable with HD-DVD as they don't have HDMI or DVI digital connections, the only way to get HD from that format, another copyright concern as the signal can be sent digitally from player to TV set. As I have such a TV(analog HD connections only), it's yet another reason that if I do end up supporting one of the new formats, it'll likely be BluRay via the PS3.

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