Sony hopes to regain their position with 34 game titles
Sony Corp. and video-game publishers will introduce 34 titles for the PlayStation 3 console in the next year as the company rebuilds sales in the money-losing unit.
The PlayStation 3 games, including 15 developed in-house and 19 from independent publishers, were unveiled to reporters and analysts at the company’s San Diego development studio.
Sony’s video-game unit, which sold more than 100 million PlayStation 2 consoles, is under pressure to increase sales of the new console, ranked third behind Nintendo Co.’s Wii and Microsoft Corp.’s Xbox 360. PlayStation 3 contributed to Sony’s $562 million fourth-quarter loss, the biggest in four years.
“We got into the business to be successful and we got into it to make money,” Jack Tretton, chief executive officer of Sony’s U.S. video-game business, said in a May 15 interview. “Now, we’ve got to make sure we remember why we got into the business and how it applies to the PS3.”
The PlayStation 2, introduced in 2000, made Tokyo-based Sony the undisputed leader in video-game consoles and enabled the company to lock publishers into exclusive contracts for games such as Take-Two Interactive Software Inc.’s original “Grand Theft Auto.” PlayStation 3 so far has shown little potential for duplicating that feat.
Competition
Sony sold 501,000 PlayStation 3s in the U.S. this year through March, compared with Wii sales of 1.03 million, according to NPD Group Inc., a market researcher based in Port Washington, New York. Microsoft sold 721,000 Xbox 360 players. Sony also trails Wii in Japan and Europe.
Wii, priced at $249, has attracted consumers with simple games and a wand-like controller that players swing like a sword or tennis racquet. PlayStation 3, with versions that sell for about $500 and $600, is more popular with hard-core enthusiasts who like its complex shooting and racing games.
Sony, which expects PS3 to be competitive in the marketplace for 10 years, will begin to make money on the machine in fiscal 2009 as costs of chips and other components are cut, Takao Yuhara, Sony’s head of investor relations, told reporters in Tokyo today. He said the game unit is expected to lose about $414 million in fiscal 2008, which ends next March.
Price Cut?
Tretton declined to say when PlayStation 3 prices may be cut.
“If that means it’s going to cost us more to make than we can sell it for in the short term, that’s OK, because it’s going to pay off in spades in the long run,” he said.
As video-game losses narrow, overall annual company profit will double to a record $2.7 billion this fiscal year thanks to television set sales, Sony said yesterday.
Sony American depositary receipts, each equaling one common share, fell 80 cents, or 1.4 percent, to $55.05 at 4:30 p.m. in New York Stock Exchange composite trading. They have advanced 29 percent this year.
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I really think all the sales comparison between Xbox360, Wii and PS3 is too early days yet given the late release of the PS3. At present the PS3 is a late runner - with a limited game selection - and a perceived high price point (lets not forget you don’t just get a games machine!). When I bought my original PS2 at around £300 that was thought of as high - and it was just a games unit - as the price dropped most parents bought it for their kids.
Sony want the PS3 to evolve to become a media hub, my only criticism being the drip-fed updates for capabilities we all know are in the machine - much like the PSP, why do we have to wait??
Let’s stand back - the games are coming, and like most people I’m eager to get hold of them.