PlayStation 3 Could be Delayed

Confirming rumors that have been making the rounds for the past several weeks, Sony this week admitted that it might have to delay release of its next-generation PlayStation 3 (PS3) video game console from second quarter 2006 to the end of the year. According to the company, the final specifications and availability of leading-edge PS3 components, such as its Blu-ray Disc optical drive and graphics circuitry, could force the delay.

"We're aiming for spring, but we haven't announced specific regions," a Sony spokesperson said yesterday, referring to the fact that the company will likely roll out the PS3 in Japan first, followed by North America three to six months later. "We're waiting for [component specifications to be ratified] until the last possible minute, but the launch could be pushed back if they're not decided soon."

Sony originally hoped to pit its PS3 against Microsoft's Xbox 360 by early 2006, but delays and technical problems have plagued the high-end machine. Merrill Lynch analysts reported last week that Sony could lose as much as $900 per PS3 if the machine goes on sale early this year. Over time, falling component prices should help Sony offset those losses, however, and the company has historically made up for hardware losses with software and accessory sales.

But even if Sony does make the desired 2006 release date, analysts are concerned that the PS3 will be too expensive to generate many sales. When Microsoft announced that a complete Xbox 360 system would retail for $400, many were surprised at the high price. The PS3, however, will likely cost much more.

PlayStation 3's high price and continual delays and the availability of the Xbox 360 could prove a boon for Microsoft, which today owns just 15 percent of the video game market, compared to 70 percent for Sony. Many believe that Microsoft will be able to grab another 20 percent of the market during Xbox 360's lifetime, which could come at Sony's expense. Meanwhile, analysts expect Nintendo, the third major player in this market, to retain its 15 percent slice with a new console dubbed the Revolution, also due for release this year.