Sony's Playstation 3 console has made its highly anticipated debut in its homeland of Japan where fans have quickly eliminated the 100,000 units Sony had spared for the occasion.
Japanese consumers had formed long lines long before the console's release in an attempt to secure possession of the PS3. Crowds were disappointed at the short supplies and some complaints were heard over Sony's choice of price but most of those queuing were just happy to get their hands on the console.
All retailers in Japan have refused to comment on the number of units they received from Sony so it is hard to establish how impressive the fact that stores sold out in a few hours really is.
Analysts expect Sony to lose some of its dominance of the console market during the next-generation race, mainly due to the risk of introducing a brand new architecture and the battle of the DVD formats. Developers have also been facing a few problems familiarizing themselves with the needs of the PS3.
Sony will be making a loss on every console sold during these early stages of the PS3's introduction while analysts expect the company to begin showing profits by 2008. Sony expects its gaming division to lose USD 1.7 billion in the fiscal year through March 2007.
Sony is facing a delicate balance as its pricing policy on its new console has been severely criticized. As a result the company took the unprecedented step of cutting the Japanese PS3 price prior to its launch to approximately USD 420 for the cheaper model (a drop of about 20 per cent). The more expensive 60 GB model retails in Japan for about USD 510.
Sony will have 400,000 units of the PS3 available for its U.S. launch, November 17 and analysts expect a similar pattern of quick sold-out announcements from most North American retailers. The Japanese consumer electronics giant plans to ship 6 million PS3 units by March 2007, in a forecast which many analysts consider unrealistic, especially as the European launch of the console has been delayed to spring 2007.
Sony's main rival in Japan, Nintendo, will introduce its new gaming console on November 19 2006 and it is expected that there will be adequate supplies for the launch. Together with Microsoft's XBox 360, Nintendo's Wii will be the main rivals to the PS3 and are expected to begin digging into Sony's market share.
Despite all the negative press Sony has received, most analysts agree that the PS3 will begin making money at some point in the future and that is the main measure which determines whether a console was successful.
