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Sony PS3 Delayed

3/15/2006 03:08:00 PM Eastern

Tokyo — Sony announced that it would postpone the release of its next-generation PlayStation3 video game console until November.

In a meeting with game software developers here, Ken Kutaragi, president of Sony's game unit, apologized for the delay of the PS3, calling it a marketing decision designed to allow the company better preparation for the year-end holiday selling season.

Kutaragi said Sony would be ready to produce a million consoles a month by November and planned to make six million machines by March 2007. "Instead of rushing, we want to have a solid launch," Kutaragi said. "We wanted to have time to make the big sales season that starts with Thanksgiving."

Many analysts believe the delay could be costly for Sony because it will allow rival Microsoft to further entrench the market position of its competing game system, xBox 360, which has been on the market since late last year.

The delay is also a setback for the fledgling Blu-ray high-definition optical disc format. Sony had hoped that installing Blu-ray drives into PS3s would help popularize the format over the competing HD DVD format.

Strategy Analytics, a Boston-based consulting firm, believes the setback will be temporary. “While 2006 sales will clearly fall short of previous expectations, Strategy Analytics maintains its previous forecast of PS3 sales of 121.8 million units through 2012. This compares to expected sales of Microsoft's Xbox 360 of 58.8 million units over the same period,” according to a statement.

"The PS3 delay will give Microsoft more time to win early adopters, but this was generally anticipated," notes David Mercer, principal analyst at Strategy Analytics. "Any further delays could seriously damage Sony's position as a consumer technology leader. Assuming the November launch takes place as planned, we still believe that the PS3 will prove to be the dominant next generation console which will ultimately win a 65 percent share of the market."