Language Selection

English French German Italian Portuguese Spanish

Sony could wait till '07 to launch PS3

Filed under
Gaming

Buried in an analyst's memo, written shortly after last week's Electronic Arts earnings call, was a hidden gem. According to the widely read team at Wedbush Morgan Securities, Sony may delay the release of the PlayStation 3 until 2007--if exactly the right conditions prevail.

Currently, the console is slated to appear in Japan before the end of that company's fiscal year--March 31, 2006--and in North America before the end of 2006.

Given the right set of circumstances, however, that release window (at least in North America) could intentionally lag until after the 2006 holiday buying season.

In a research memo sent to investors, Wedbush senior analyst Michael Pachter set up the following scene for a delayed PS3 launch. It starts with the current-generation Xbox being priced down to $99 post-Xbox 360 launch, but no lower. Concurrent with that situation--an Xbox 360 at an unspecified price and the Xbox at $99--Sony would drop the price of the PlayStation 2 to $99.

There are two components to that pricing strategy: the first is that a $99 PS2 would offer a significant distraction as the 360 launches. As Pachter states: "We believe that the company will attempt to disrupt the Xbox 360 launch with a price cut, and as a result may succeed in diverting attention away from the higher-priced next-generation console."

In addition to the "diversion rationale" is the supporting fact that "the redesigned PS2 carries a manufacturing cost of less than $99," according to Pachter. New consoles are noteworthy for the fact that at the beginning of their manufacturing cycle, the units are sold at a loss. Given that the PS2, according to Pachter, would cost less to make than to sell, it behooves Sony to extend demand for that product for as long as possible. And if Microsoft takes the Xbox price no lower than $99 (still a loss for Microsoft, according to Pachter), Sony will find itself in a win-win situation.

Another cornerstone in Pachter's theory is Sony not wanting to disappoint consumers and retailers by having too few units in the channel over the high-demand weeks of this coming December. Pachter says, "we believe that Sony suffered the ignominy of being unable to satisfy holiday ['04] demand in order to increase its gross profits over the short term."

If the PS3 launches in late '06 and suffers the same fate, Sony would be embarrassed for a second straight year. Without any PS3's in the channel, there's no chance of a shortage of stock. A backward theory perhaps, but a theory based in fact nonetheless.

The key point in Pachter's argument weighs heavily on what sort of showing the 360 has at launch. If the 360 tallies significant sales early, Sony would need to fire on all cylinders and get the PS3 into the channel ASAP. However: "Should Microsoft fail to garner sufficient software support to gain an insurmountable lead, we think that there is a possibility that the PS3 launch will slip into early 2007."

Following the distribution of the memo last week, GameSpot spoke with Pachter who emphasized that he "posited the thought as option value for Sony." Continuing, he said, "I think the 360 will do quite well."

But if the 360 does an about-face at launch and tanks, the above Plan B could be an option the cash-strapped Sony might just consider.

By Curt Feldman -- GameSpot

More in Tux Machines

Lubuntu 15.10 Alpha 2 Is Ready for Download, Still Using the LXDE Desktop Environment

The development team behind Lubuntu, an open-source and freely distributed flavor of the popular Ubuntu Linux operating system, announced a few minutes ago the release of the second Alpha build for the upcoming Lubuntu 15.10 (Wily Werewolf) distribution. Read more

Ubuntu Kylin 15.10 Alpha 2 Is Out for Testing with Linux Kernel 4.1, More

The development team behind the Ubuntu Kylin computer operating system have announced earlier today the immediate availability for download and testing of the second Alpha build of the upcoming Ubuntu Kylin 15.10 (Wily Werewolf) distro. Read more

Linux-powered smart sniper rifle can be hacked

Two years ago, TrackingPoint burst on to the scene with a Linux-powered smart sniper rifle that took the guesswork out of killshots. Now, however, a pair of hackers have figured out how to make it miss every single time. Read more

5 heroes of the Linux world

Linux and open source is driven by passionate people who write best-of-breed software and then release the code to the public so anyone can use it, without any strings attached. (Well, there is one string attached and that’s licence.) Who are these people? These heroes of the Linux world, whose work affects all of us every day. Allow me to introduce you. Read more