Boy, I was going to post this last week! Work got the best of me... anyhow, this seems to be a pretty strong rumor at this point.
Looking at it objectively, it is pretty hard to dismiss. I think it has become more than abundantly clear: Sony will not be able to launch the PS3 in meaningful quantities (if at all) in the Spring of 2007.
And Sony's record as of late strongly indicates they a) don't have a problem delaying and b) won't meet demand. First is the PSP which saw significant delays in Europe. Coming out a year later is not out of the Sony handbook. Then there is E3 2005 with the Spring 2006 launch date. Many of doubted this, and as it turns out by late winter 2006 it was abundantly clear from Sony's internal roadmaps that finalization of much of the platform had not been accomplished and a lot of verification was still left. Yet no word on the launch... until it was too late to ship in spring.
Then we got a Fall launch date -- world wide. Only for a) over 40% of the market to see delays and b) shipping numbers drop from 4M, to 2M, and now seemingly to 1M for CY 2006.
Sony has ~5x the customer base as their prime competition and yet is delivering fewer units. That is a problem. A big problem. See: Sony management reshuffle. They have executed poorly (and I am sure KK is pretty ticked at those in charge of BDR) and nothing indicates that a) they can meet the demand/pressures in the US and Japan while at the same time build up ample supply for Europe + localization. March is 90 days away.
Again, March is 90 days away.
So Sony has to choose: Have very little in 3 markets or have a little more in 2 markets. Would those 500k units be more relevant to the US or Europe? Are European gamers going to buy X360's and Wii's if they cannot get a PS3 in Spring or will the lack of PS3s results in the US continue to build pressure and marketshare risk in the US? Will Japanese gamers continue to wait or will the Wii make further inroads?
And then there is the financial angle: Can Sony afford to be building a ton of extra PS3s? Sony went from a projected estimated loss of $900M with the goal of 4M units to an projected estimated loss of $1.7B with less than 2M units (they will be lucky to get 1M units out in CY 2006). It is pretty clear that BluRay production is a major bottleneck in regards to cost and production and has not ramped up anywhere near Sony's goals. Further, the PS3 is costing them a ton, so selling less and/or keeping the high price point seems necessary until this gets under control.
I know I am not the only one who has been predicting this. Likewise I was not the only one to predict that they would not make Spring 2006 back at E3 2005. But a number of us have been seeing the writing on the walls and I dare say the writing that clearly indicated 1) the Spring 2006 delay and 2) the massive shortages at launch are speaking loud and clear.
Of course I fully expect some comments like, "Sony recently announced significant improvements on BluRay diode production". All well and good, but before that can be beneficial it needs to happen. Anyone else remember the "
PS3 could launch in 2005 if Sony wanted to" threads? Talk is cheap, and hence far all the talk has been unable to outperform the realities. This is not doom and gloom. BluRay diode production WILL improve and costs WILL drop. Likewise Cell and RSX will be moving to 65nm as well as EE+GS will be removed. Manufacturing is going to get cheaper and easier shortly with large improvements in supply. BUT, huge BUT, Sony will have to immediately fill in Japan where Wii is making noise and especially NA where Wii is not only making noise but the X360 is poised to make a run.
Sony needs to have quantity in regards to the PS3 in NA in 2007. MS not only has Halo 3 but a lot of games coming (Mass Effect, Forza Motorsport 2, Bioshock) plus a back library of cheap games and multiplatform games that are looking better, for the moment, on MS's console. Sony also cannot put themselves in a position where GTAIV is released and MS has a significant market lead in NA. Sony not only needs to get production going, but needs to make sure they are in NA hands. Sony owns Europe, and while a delay will hurt some, continueing a path with little NA penetration will be enough IMO to convince many publishers to stick to the X360 as the primary SKU for at least another year, if not longer. This with a price drop could be detrimental to the PS3 install base. Hence far I have felt MS was aiding their own position without harming Sony's. While Sony's price plan makes 100M in 5 years difficult (although 100M still seems likely for its lifetime), not providing consoles in a timely manner to key strategic areas and providing a realistic profit channel for publishers could harm some of their overall marketshare by the time the dust settles.
I think Sony knows this and they know that 2007 they need to weather the MS storm in NA. If they can get units in people's hands in 2007, even with the Halo craze, Sony will be ready in 2008 and can push ahead. But if they stretch themselves too thin everywhere to "just be there" I think they will hurt themselves. Thus I think Fall 2007 is the EU launch and now and until then Sony is going to hit the US VERY hard. If they decide to go with essentially a paper launch in March 2007 in Europe and are still supply limited in the US and Japan...
While Sony may ship in EU in March, why should we believe them? The PSP saw a year delay, it is the market with the least at risk to Nintendo and MS, they don't have the demand to supply the US or Japan at this time, production is very expensive, and they have delayed twice now as well as been shown to be totally off in regards to their roadmaps and production numbers.
Is there a reason we should even EXPECT a March 2007 release in Europe?
Outside of Sony sticking to their PR (which they did with the Spring 2006 and WW launch PR as well, and we all know how those turned out) I am not seeing any objective reason why we should expect a March 2007 release.
This is your mission, if you so choose to accept it:
What compelling, objective reasons are there to re-inforce the belief that Sony will release in March 2007 in Europe? Can anyone give good, logical reasons how Sony will significantly increase production in 90 days to meet supply and release in Europe?
(No, Sony said they would doesn't count). I guess they could do a small launch with a couple hundred thousand units and call it a day... yet seeing how battered MS got for their production issues, with 5x as many customers I can only imagine the abuse Sony would recieve. Kind of puts in perspective last years WW launch.
