An analyst claims that Sony’s projections for the North American launch may be too optimistic. Sony had announced that the PS3 launch would see North America receive 400,000 machines. However, according to Lazard Capital Markets analyst Colin Sebastian, Sony will only be able to deliver 150,000 to 200,000 consoles to the US market at launch, approximately half the number the company has predicted. (Sony’s estimates are for all of North America, and Sebastian’s figures are for the US only, so the figures may not be quite as bad as they first appear.)
For Sony’s part, the company admits that the 400,000 figure is more of a “target” than an exact manufacturing figure. However, the company is still confident that it will meet its target of 2 million units shipped by the end of 2006. Sebastian feels this is unlikely, and estimates that Sony will likely only wind up delivering 750,000 PS3 consoles worldwide by year’s end.
If Sebastian is right, will the lowered number of consoles seriously hamper Sony’s plans for the PlayStation 3? The analyst doesn’t think so. He says that the November launch of Sony’s next-gen console is “largely symbolic,” intended only to get the PS3 out into the world after many embarrassing public delays. In addition, the buzz generated by a hot Christmas gift item that has limited supply can often provide free advertising for the product.
One possible drawback to this plan is that customers may go to the stores intending to pick up a PS3 and, finding none are available, decide to purchase a Nintendo Wii or Xbox 360 console instead. Sebastian estimates that Nintendo will ship 1.2 million Wii units to the United States alone by the end of the year. While the Wii and the PS3 are not aimed at precisely the same market—in fact both Sony and Microsoft have made statements that they believe gamers should pick up a Wii in addition to their systems—the fact remains that a significant fraction of gamers will choose to pick up only one new system this Christmas. GameStop has already been forced to cancel many customers’ PS3 preorders.
The PlayStation 3 launch has already been marred by delays (it was originally supposed to be introduced in “Spring 2006”) and disappointments (the European launch was delayed until early 2007, and the numbers for the Japanese launch scaled back to 100,000 units). However, the long term, it will be marketing muscle and the number and quality of games for the system that will determine whether or not the PlayStation 3 is a success.