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Sunday, November 12, 2006

Sony's PS3 fly off the shelves when it is lanched

Digg! Slashdot Slashdot It! After considerable delays, Sony finally fired its long-awaited salvo in the next-generation gaming console war, launching the PlayStation 3 to anticipated huge demand in its native Japan.

Stores began selling the PS3 early Saturday morning, with media outlets predicting long lines and a fast sell-out. Sony has said it would make about 100,000 of the consoles available for sale in Japan upon launch. Another 400,000 units are being shipped to U.S. retailers, where they are expected to be sold starting next week.

Thousands of game fans lined up for hours, braving the early morning chill and occasional showers, to get their hands on Sony Corp.'s much-heralded PlayStation 3 game console, as sales started Saturday in Tokyo. "I've been waiting for this day to come for so long. I'll play it all through the weekend. No time for meals," said Tomoaki Nakamura, who already owns a PlayStation, a PlayStation 2, a PlayStation Portable handheld machine and an Xbox 360.

Nakamura, 41, was one of about 1,200 people forming a meandering line around electronics retailer Bic Camera Inc.'s flagship Yurakucho shop in central Tokyo.

Further up the queue was Robyn Sinclair, a 25-year-old exchange student from Vancouver.

"It's the newest system, the latest and greatest thing ... although the Nintendo Wii looks very interesting, too," said Sinclair, who queued for more than 12 hours to score one of this year's hottest holiday items.

In a countdown to the 7 a.m. local time (6 p.m. ET Friday) store opening, Ken Kutaragi, head of Sony 's game unit, greeted the crowd with a broad smile.

Sony sells a basic model of the PS3, which is equipped with a 20-gigabyte hard disk drive, for ¥49,980 ($425), almost double the price of the Wii and more than a quarter higher than the Xbox 360.

The launch of the latest version of its blockbuster game gear pits the PS3 against Microsoft Corp 's Xbox 360 and Nintendo Co. Ltd's upcoming Wii in the near $30 billion video game industry. By the end of 2006, Microsoft expects to have shipped 10 million of the Xbox 360, well ahead of the PS3's expected shipment of 2 million units.

Following the Japan launch on Saturday, Sony plans to start rolling out the PS3 on Nov. 17 in North America. Gamers in Europe must wait until March after a production glitch delayed the launch there.

Nintendo's Wii, which features a one-handed controller that looks like a TV remote and uses motion-detection sensors to allow players to control the game by wielding it like a sword or swinging it like a tennis racket, will go on sale on Nov. 19 in the United States and Dec. 2 in Japan.

Demand exceeds supply Sony still hopes to meet its original forecast of having 6 million PS3 units on the market by end of March, 2007. However, missing the holiday season in many key markets -- European consumers likely won't see the devices available until early next year -- could prove costly for Sony and a boon to rivals such as Microsoft's Xbox 360 and Nintendo's Wii, which will launch in the U.S. within a few days of the PS3 at about half the price. The Xbox has had a nearly full year's head start and also sells for far less than the PS3.

The launch is a glimmer of hope that Sony can end 2006 on an upbeat note. In addition to the PS3 delays, Sony has been at the center of the battle over next-generation DVD technology, with the market split over whether to adopt its Blu-ray standard or the competing HD DVD. Meanwhile, it has been forced to recall nearly 10 million laptop computer batteries worldwide after problems with overheating were discovered.

Turnaround solution for Sony? The PS3 has been closely watched since its development began in the wake of PlayStation 2's launch. Sony has long dominated the gaming console market, holding approximately 70 percent of the market based on the success of its earlier version of the PlayStation. Some 200 million consoles have been sold under the PlayStation brand to date, not counting the PlayStation Portable handheld device.

Sony has run into numerous problems in getting the PS3 to market, from issues with sourcing components to questions surrounding pricing. It also announced recently that users would have to download a software update in order to use all of the advanced Web connectivity functions.

Some have questioned whether there's a viable market for the most heavily loaded PS3, the 60 GB hard drive version that will retail for around $600.

Sony has already cut projected prices on the console, reducing the price in Japan by some 20 percent at the last minute, likely exacerbating the losses it will see in its gaming division. Sony itself has said the unit will lose $1.7 billion during the current fiscal year, which ends in March, 2007.

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