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Playstation production problems & prickly press

November 22, 2006

Bloomberg.com is breaking the news to Sony Playstation 3 fanboys everywhere … good luck seeing a PS3 in 2006. You might not even find one before your next birthday at this rate.

Sony is having a tough time coming close to their projected mark of 2 million PS3 consoles released worldwide by year’s end (a cut from 4 million originally projected), market analysts are reporting.

At this rate, Sony might not even make 200,000 units here in the U.S. by year’s end, one analyst predicts.  This is all due to shortages in Blu-ray DVD components, problems with the new Cell processor (which is the brains of the PS3) and problems in manufacturing, according to the report.

GamesIndustry.biz now reports that Sony swears that 1 million systems will make it to North America by year’s end.

This is a far cry from the PS3’s hot contender, the Nintendo Wii, which was supposed to have 2 million units on the market just for launch day this past Sunday.  Reports have it sold out at most retailers.

More from Bloomberg.com’s Andy Fixmer:

More than half the 150 stores checked by Kaufman Bros. said they wouldn’t have enough units to cover preorders, according to a Nov. 16 research note by retail analyst SooAnn Roberts. She predicts Sony will ship no more than 200,000 units to the U.S. this year.

[Michael Savner at Banc of America Securities] said in a Nov. 7 report that Sony would miss its target. [Anthony Gikas at Piper Jaffray & Co.] said in a Nov. 16 note that he expected 200,000 PlayStation 3s available at the U.S. launch and 400,000 by year- end.

Toys “R” Us Inc., the second-largest U.S. toy seller, expects more PlayStation 3 machines to arrive next week, spokeswoman Kathleen Waugh said in an interview. She said the company received enough PlayStation 3s at launch to cover pre-orders.

“They gave us allocations for the holiday season last week,” Waugh said. “We wish we could have gotten more.”

So, that Circuit City employee’s prediction that their store would not see any more PS3 systems until February could be true!  Ouch!  Now I can see why many paid top dollar for a system on eBay.

However, Gamestop is reporting that they’ve received their second shipment of PS3s and Wiis for Black Friday, which is good, since they still have pre-orders to fill.

Luckily, the Playstation 2 is still chugging strong, and with a bevy of quality titles on the market for the holidays (Okami, Bully, Guitar Hero,  and Final Fantasy XII just to name a few.  I’m currently busy with WWE Smackdown vs. Raw 2007 ), I don’t see Sony’s dominance in the market dying off because the PS3 is sputtering.  There’s still plenty of action left in the current-generation system.

And in the end, the hard-core gamers’ brand loyalty is still Sony’s golden calf.  The PS3 is just too sexy of a machine to give up on, according to iWire.

And analysts are seeing this too, according to Fixmer’s piece:

Customers who want a PlayStation 3 will probably wait and buy more games for their PlayStation 2, Mitchell said in an interview.

“If there is a substitution, it would be more for the Xbox 360,” [Kaufman Bros. Equity Research analyst Todd Mitchell] said. “Demand for PS3 is from hard-core gamers, who wouldn’t opt for a Wii. It’s not an alternative to PS3.”

Now, with the PS3 slow start, it would be easy to pile on and bash the system … oh wait, the New York Times already did.

Their reviewer, Seth Schiesel criticizes Sony for not blowing his mind with the gaming experience PS3 provides.  Heck, very few launch systems EVER provide that experience, since the software released on launch day is a collection of “safe” games — a racer, a sports game, a fighter, a shooter and so on.

And the problems Schiesel names can all be fixed with firmware patching down the road … probably by the time I actually get my hands on a PS3.

I don’t have a problem with the PS3 being a work in progress, as long as that progress keeps progressing toward providing me with the best gaming experience.  Sony will learn what’s best for their gamers from customer reaction and suggestions and adapt the system firmware, just like Microsoft’s XBox 360 did.

But first, they need to get the systems out the door. 

Bloomberg.com: PS3 shortages (Japan)

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