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This is all from Next-Gen.biz.

 

A decent amount of information was revealed at the 2006 PlayStation Business Briefing. Here are 10 points made by Kutaragi in addition to earlier Next-Gen.biz coverage...

By Kris Graft

 

1. Kutaragi stated that Sony expects to sell to manufacture 6 million PlayStation 3 units by the end of fiscal 2006, ending March 31, 2007. That's less than 6 months after launch.

 

2. As reported, the PSP will soon support an emulator to play original PlayStation games. The games will be stored on memory sticks via e-distribution.

 

3. The PS3's online service, dubbed "PlayStation Network Platform", will sport voice chat, matchmaking lobbies and Marketplace-type features that allow users to download content, including software, implying some sort of digital distribution for games. The online service will be available at launch. As reported, the service will be free.

 

4. PS3 will allegedly be backwards compatible to all PS1 and PS2 games. The new console will also support high-definition resolutions for previous generations.

 

5. Finalized PS3 dev kits will be shipping to developers in June.

 

6. The PS2 will remain at its $149 price tag for the foreseeable future.

 

7. Kutaragi said that that the PS3 will require a hard drive, which will have a 60 GB capacity and support Linux OS. No word on if it will be included.

 

8. A hard drive-equipped PS3 is intended to be a sort of a central server for the home, allowing users to upload media from one peripheral and view it on another.

 

9. Sony will release a new firmware upgrade for PSP which will support Flash in its Web browser.

 

10. PS3 games will be featured exclusively on Blu-ray discs to protect against piracy.

 

 

Sony has at last admitted that the PlayStation 3 will be delayed until November. Although entirely expected, this is still bad news for publishers and retailers. Next Generation's editor-in-chief Colin Campbell (pictured) reports...

 

Delays, after all, are rarely cause for celebration. Put simply, this means fewer consumers to sell to, and longer to wait until they arrive.

 

Although publishers have long expected a delay, and will have adjusted their business plans accordingly, it doesn't mean this is somehow good news. Not only that, but we are still working with promises and loosely defined targets. No publisher is going to bank on everything happening just as Sony predicts, especially in the light of this long-overdue announcement, and the phenomenal complexity of PS3's launch.

 

If Ken Kutaragi thought this was great news, he didn't seem to show it, apologizing for the delay earlier today. He said, "When we initially announced our plans to launch this spring, we had expected the standardization work on all of the technologies to be completed by last August, but there were improvements that were decided on since then."

 

He added, "We wanted to be sure to include all future technologies that are available now."

 

Analysts aren't exactly jumping for joy. Hiroshi Kamide at KBC said, "There's nothing [for publishers] in the first half of the year, and the installed base in the second half will be so small it will have no material impact for earnings at all. This is going to be a horrendous year."

 

Timing is everything

 

We now know the timing of the machine, but key questions remain unanswered. As yet we have not been told of a price for PlayStation 3. It is probable that the machine will be the most expensive on the market, coming with a subsidised online gaming service as well as a Blu-ray drive.

 

In the short outlook this is fine for Sony in terms of hardware sales. The machine will be highly anticipated, a great product in huge demand. Howard Stringer will be pleased. But it will be some time before it represents a genuinely viable market for third party publishers.

 

As with the launch of PlayStation 2, there is also the question of who is buying the machine to play games, and who to enjoy the disk drive. It would be fair to assume that PS3's tie-ratio will struggle to match Xbox 360's at launch, that is, without the help of ratio-inflating retail bundles.

 

Bad news

 

Publishers have been prepared for the bad news. They've known about it for months. They'll probably be relieved that the machine is being launched in the U.S this side of Thanksgiving. But this will be scant consolation for a launch that was supposed to happen "in the spring".

 

Sony says it will have a million units at launch and a million-a-month during the launch phase. "This may not seem like much, but it's more than the initial capacity for PlayStation 2," said Kutaragi, seeking some glimmer of gloss.

 

These numbers have largely been welcomed by the media. But those machines must be shared around the world, and the numbers do not take into account the fair probability of manufacturing glitches, which seem to dog such launches. Shortages are almost guaranteed, at least through Christmas. I'd be amazed if the channel were well stocked through November and December.

 

If the U.S gets a million units by Christmas, it would be an achievement, but the PS3's installed base would still not be much higher than Xbox 360s as of Xmas 2005. Sony says six million units (worldwide) will be ready by March. If they sell through, the market will be looking strong by E3 2007.

 

Tie-ratio

 

An optimistic tie-ratio of three would create a calendar 2006 market worth about 3 million games, shared out among eight to ten products. A 300,000 selling-game (highly optimistic) is a worthy goal, but in this environment it's no money-spinner. Put it this way; in terms of unit-sales, it'll place a game outside the top 40 sellers for the year. This leads us to believe that a significant proportion of launch titles will be multi-format releases, somewhat dampening the excitement.

 

In order to make money from PS3 in the early months, third parties would need to spread costs across platforms, create a genuine must-buy product, or create games that will still be selling in decent quantities six months or a year after launch. The brightest outlook comnes from the extra $10 next generation games will command - a price point which increasingly looks essential, as opposed to merely desirable.

 

For much of the game industry, this delay is effectively the absence of a major console for the best part of as year.

 

Launch games

 

At E3, we'll see some PS3 games and there'll be more details of the PlayStation Network Platform. Over the next few months, attention will turn towards the games on offer at launch. Publishers will no doubt ponder which of their prized launch titles - backed by $10 to $20 million in development investment - are likely to see a return from such a small audience.

 

In the fall, we can look forward to the excitement and buzz generated by a Sony and a Nintendo launch. But at games retail check-outs, 2006 will not be about PS3 or Revolution.

 

It will be about Xbox 360 which, we hope, will have a worldwide installed base of well over 5 million by the time PlayStation 3 arrives. And it will be about DS and PSP, both of which are benefiting from some market excitement. And it will still be about Xbox and PlayStation 2 games. This is a market in sharp decline, but it is still the meat and potatoes of retail revenues.

 

With that in mind, by what measure has the next generation actually arrived?

 

Market share

 

For Sony, another problem will be its marketshare. For the last ten years it has enjoyed significant dominance. This dominion has never before seemed so under threat.

 

Microsoft is targeting itself to sell 5.5 million Xbox 360's by mid-summer. This looks improbable. But even if the firm comes in with 3 million, and a further 3 million before the end of this year (numbers which would disappoint the market and Microsoft), PlayStation still has a lot of catching up to do.

 

The best Sony can do to close that gap as quickly as possible is to make sure its most fertile market (and Microsoft's weakest) is well-supplied. But what is good for Japan is not always good for the United States.

 

The company is probably looking at a full year on the market before it can hope to catch Microsoft. And we have not even begun to talk about Nintendo, which will enter the market with an innovative, low-priced and highly anticipated product supported by a brand which is enjoying a purple patch.

 

Sony will come through these trials. But the market is facing as tough a year as our most pessimistic seers could have predicted. We can only hope that E3 will inject some joy back into the industry.

 

 

This makes me almost want Korea to beat Japan today.

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