As Sony stays mum on PS3, doubts grow

By Rachel Rosmarin

updated 9:32 p.m. ET Jan. 19, 2006

BURLINGAME, Calif. - Sony's future as a hardware company and legacy as a media company are both riding on PlayStation 3 — its long-awaited next-generation game console. But the less Sony says about the device, the louder skeptical voices grow.

Sony hasn't said much about the PS3 since May 2005, when it spilled details about the console's new processor and high-definition graphics. It's been mum since then. And when no new details were presented at the Consumer Electronics Show this month — either during Sony Chief Executive Howard Stringer's keynote speech or under the roof of the company's megabooth, where it showed off a demo of the machine but wouldn't provide any other details — the buzz got only stronger.

Now industry observers are wondering when the machine will finally debut and what the price tag will be — both for consumers and for Sony itself.

The outcome will be big for Sony: The size of the videogame industry is nearing $30 billion, and Microsoft and Nintendo are simultaneously trying to position their own consoles as digital hubs in living rooms across the world. (MSNBC.com is a Microsoft - NBC joint venture.) On top of that, the game machine is key to Sony's high-stakes bet on Blu-Ray, the next-generation, high-definition DVD format.

First there's the issue of the launch date. Sony's last word on this remains spring 2006, but almost nobody believes it — at least not for the North American launch — because of a history of delays for previous products. Thanksgiving looks to be a better bet, at least to Evan Wilson, an analyst with Pacific Crest Securities.

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If the PS3 does launch in November, Sony will have given Microsoft a full year's worth of potential sales of its next-generation console, the Xbox 360. "Microsoft's lead time in building share for this console generation is real," says NPD Group's Anita Frazier. "The longer that lead time is, the greater the initial risk for Sony."

Then there's the worry that there won't be enough PS3s to go around when the machine finally does launch. Gamers had these fears realized the last time around, when only 600,000 of them got their hands on an Xbox 360 during the last two months of 2005. "But that was the most restricted launch supply of any major console platform," says Frazier.

Other analysts have estimated that Sony could launch about a million PS3s before 2006 is over — but that's the same number of units that were shipped by Sony during the launch of the PS2, and if a million units wasn't nearly enough in November 2000, it won't be enough in 2006 either.

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