Segun el New York Times, Sony necesita que PS3 triunfe para salvar a la compañia

By MARTIN FACKLER
Published: November 11, 2006

Even before PlayStation 3, Sony’s long-delayed new game console, goes on sale in Japan Saturday morning, it has already sold out — in Japanese cyberspace.

Across Tokyo, lines of young men were staying up overnight to be among the first to buy a console, but the frenzy began even before that. In October, the Japanese site of Amazon.com received advance orders for its entire first lot of game consoles in 18 minutes.

Another shopping site, Tsutaya Online, sold out preorders for all its machines in just six minutes. The scarcity has created frantic buying on online auction sites, where the right to buy a PlayStation 3 has fetched up to 130,000 yen ($1,100), about twice the machine’s expected retail price.

This appears to be welcome news for Sony, the ailing Japanese electronics giant. But it may not be enough as Sony struggles to recover from a costly recall of laptop batteries and a 94 percent plunge in profits in the most recent quarter. To reverse its current decline, and regain its title as a global innovator, Sony badly needs for PlayStation 3 to be a long-term hit — and preferably a global blockbuster like the Walkman.

Indeed, analysts say, Sony cannot afford for PlayStation 3 to be anything less than a smashing success. Sony’s chief executive, Howard Stringer, has proclaimed that Sony’s future depends on creating “champion products,” the pathbreaking hits that earn high profits and keep the company ahead of cheaper Chinese and South Korean rivals. Even in consoles, a category it has long dominated, Sony is already a year behind the Xbox 360 from Microsoft. It will compete head-to-head with Nintendo’s Wii, which will be introduced this month.

But analysts say PlayStation 3 is the only product currently visible in Sony’s development pipeline with real “champion” potential.

“Sony needs PlayStation 3 to save the company,” said Masashi Morita, a game and Internet industry analyst at Okasan Securities in Tokyo. “A lot depends on this one product.”

But before it can rescue Sony, PlayStation has to recoup its own development costs. The games division lost $369 million in the most recent quarter, which ended in September, because of the new console’s development costs and marketing preparations, the company said.

Sony will not disclose the total cost of creating the PlayStation 3, which has been in development for six years. But analysts say the sum reaches into the billions of dollars. Sony has revealed that it spent $2 billion on one major component alone, the high-speed Cell microprocessor, co-developed with I.B.M. and Toshiba.

With such vast investments, analysts estimate Sony will have to sell 30 million to 50 million units just to break even. To be the sort of mega-hit that Sony needs, analysts say the new game console will at the minimum have to outdo its predecessor, PlayStation 2, which has sold 106 million units since 2000.

The PlayStation 2 franchise is so well established that in September the Sony console (now heavily discounted) outsold the newer Xbox 360 in the United States, according to the NPD Group, a market research firm in Port Washington, N.Y. An important psychological milestone will be met if Sony can fulfill its original target of selling six million consoles worldwide by the end of March. Production delays may prevent Sony from even producing that many consoles by then.

Those problems delayed the PlayStation introduction for several months in Japan and the United States, shrinking production to about two million units by the end of this year. The introduction in Europe has been delayed until mid-March.

Sony is also counting on PlayStation 3 to promote other technologies that it has developed, the Blu-ray next-generation DVD drive as well as the Cell chip. These technologies give the new PlayStation more processing power and sharper graphics than rivals, but also makes it expensive: a model with a 60-gigabyte hard drive will list at $599 in the United States, and one with a 20-gigabyte drive will be $499.

That is about twice the price of its biggest competitor in Japan, Nintendo’s Wii game console, which will cost $249.99 and is scheduled to come out on Nov. 19 in the United States and Dec. 2 in Japan.

And even at those prices, most analysts say, Sony will be selling below production costs, and possibly losing hundreds of dollars a machine.

Another challenge is that while PlayStation 3 should have no problem attracting game enthusiasts, mostly males in their 20s and 30s, it may prove too complex and expensive for other buyers. Analysts warn that Sony could lose huge swaths of potential users, like women and teenagers, to cheaper, simpler rivals like Wii or Xbox 360.

Only 100,000 PlayStation 3 consoles will be available on Day 1 in Japan, the company said. About 400,000 consoles will be available for sale on Nov. 17 in the United States, where the 20-gigabyte model will be priced at $499 (compared with $399 for an Xbox 360 with comparable capacity).

While this shortage has helped make the console a hot commodity on the Internet, analysts warn that it has also discouraged some software makers from developing games for fear the market may be too small. Sony says it will have only 21 software titles available for PlayStation 3 in the United States by year’s end. Nintendo says it will have 62 titles for Wii available, while Microsoft says there will be 160 titles for the Xbox 360 by the end of this year.

“It’s crucial to build up momentum for new products in the early days,” said Masayuki Otani, deputy chief of research at Maruwa Securities in Tokyo. “PlayStation needs a broader range of software to appeal to a broader range of users.”

Even with so much at stake, Sony’s chief executive, Mr. Stringer, appears to have taken a hands-off approach, at least in public. Indeed, he was traveling in Beijing recently, serving as host at events and meeting a member of China’s ruling politburo.

He has left PlayStation 3, and by extension possibly the fate of his company, in the hands of Ken Kutaragi, president of Sony’s video game division. The father of the PlayStation line of game consoles, one of the few genuine hits to come out of Sony in recent years, Mr. Kutaragi has spent much of the last half- decade developing the newest PlayStation.

When pressed, Mr. Kutaragi acknowledges that the machine is “not cheap.” But he says he has followed the right strategy in favoring powerful new technology over cheaper alternatives. He pointed out that PlayStation 2 was also expensive at first, but its price eventually dropped by half as increasing sales drove down production costs. He also said the thrill of the newer PlayStation’s graphics and complex games will draw users despite the price tag.

“Success doesn’t depend on whether PlayStation is expensive or not,” Mr. Kutaragi said during a roundtable discussion with reporters in September, “but rather on whether the games are interesting.”

Large electronic stores in Tokyo girded for the introduction by deploying security guards and traffic cones to direct the lines of buyers, who began gathering Friday evening.

In Akihabara, Tokyo’s neon-drenched electronics district, Kazunari Yasuda, a manager at Yodobashi Camera, said his store was bringing in some 200 extra employees and guards to handle the buyers.

“PlayStation 3 is the biggest product launch of the year,” he said.

One of those in line was Takahiro Watabe, a 23-year-old university student who stood with four classmates, each holding a bag of fast-food hamburgers to eat while waiting.

“This is like a festival,” said Mr. Watabe, as he looked at the line of about 100 buyers as long as an entire city block. “PlayStation means something to us.”

“I don’t think the new PlayStation is too expensive,” he added. “If you consider it has a Blu-Ray drive, you can use it as a DVD player as well as a game machine.”

Yoshiaki Tajima, a 32-year-old manga comic illustrator, said it was “a question of whether the performance is worth the price.” He was at a different store earlier in the week to look at a wall-size display with television screens promoting PlayStation 3. “These graphics really are amazing,” he concluded, after pausing. “Yes, I have to say it looks like it’s worth the price.”

Another shopper, though, was less enthusiastic. Natsuki Inoue, 27, said she thought only young male game fanatics would go for the new PlayStation.

“This is a toy for men,” she said, as a screen flashed an image of a woman in an iron bikini cleaving a dragon’s head. “It’s hard to imagine women or children wanting this. It’s just too much.”



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