Wait for the games

Sony Corp roiled the consumer electronics and video game industries this week by pushing back the worldwide launch of its highly anticipated...

Sony Corp roiled the consumer electronics and video game industries this week by pushing back the worldwide launch of its highly anticipated PlayStation 3 to November. The delay is more than just a bummer to video game enthusiasts; it virtually guarantees consumer confusion as Hollywood prepares to release the next generation of DVDs8212;in competing and incompatible formats. Problems with PlayStation may also hamper Sony8217;s corporate restructuring.

PlayStation is Sony8217;s most profitable product line and one of the most popular consumer electronics devices of the past decade, outselling Apple Computer Inc8217;s iconic iPod 5-1. The third iteration of the game console, initially expected this spring, is considered pivotal to the resurgence of the Japanese electronics and entertainment giant.

In addition to tapping the 25 billion global games market, PlayStation 3 will include Sony8217;s high-definition DVD format, called Blu-ray. The competition between Blu-ray and the rival standard, HD-DVD, recalls the format wars between Betamax and VHS in the 1980s. By pushing off PlayStation 38217;s debut, Sony surrenders an early advantage in that race because high demand for the console was expected to put Blu-ray in more homes quickly.

But some analysts said the delay may actually help Sony by giving it time to stockpile consoles and avoid the retail shortages that plagued Microsoft last fall. The extra time also allows game developers to tweak their software, which is just as important to the machine8217;s success as its technical prowess. That strategy has paid off before. In 1995, when Sony entered the video game market with the original PlayStation, it was beaten to store shelves by game titan Sega Corp. Sony quickly became the industry leader and Sega quit the console business.

Howard Stringer last year became Sony8217;s first non-Japanese chief executive as the Walkman brand was overshadowed by iPod and lacklustre performance of the Sony8217;s movie studio and electronics business dragged down its bottom line. The Stringer immediately embarked on a massive restructuring of the company, calling PlayStation 8216;8216;one of the key pillars of Sony8217;s growth strategy.8217;8217;.

Charged with implementing that strategy is Ken Kutaragi, head of Sony Computer Entertainment Inc. But analysts said the technical issues delaying the new console hint at larger problems. Kutaragi said the company decided to delay PlayStation 3 to work out technical details. The machine is extremely complex, capable of realistic graphics and sound as well as playing Blu-ray discs. Part of the problem, Kutaragi said, was making Blu-ray work with the rest of the device.

Los Angeles Times