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Electronics superpower hopes to best PS3's sales by 40 percent

Sony Corp. (TYO:6758) saw sluggish sales of the PlayStation 3 after in launched on Nov. 11, 2006.  In the console's first three months on the market it garnered are mere 3.6 million units sold.  Although sales would eventually come back to life convincing Sony that there was life left in its console hardware business, the company was intent not to repeat on the relative miss of the PS3, instead looking to return to the successes of the PlayStation 1 and 2.

I. PS4 Aims to Wipe Bad Taste from PS3 Launch

The PlayStation 4 is set to launch on Nov. 15 in North America, a week before Sony's arch-rival in the console business Microsoft Corp. (MSFT) launches the Xbox One.  And Sony is already boldly predicting that it will sell 5 million consoles in the first five months of availabiliy, besting the PS3's sales by 40 percent.

If Sony can pull that off, it will be an impressive success story in an era when consoles are seemingly suffering the fate they bestowed upon their PC brethren -- market cannibalization.  As mobile and social network gamings have boomed, sales of new console games have dipped, according to market researchers.

But Sony has benefited from near-flawless public relations in the wind up to the PS4 as Microsoft has bumbled multiple times announcing inflammatory terms that outraged gamers, only to later turn back on some of them.  Sony had the lead as of last month in presales in the online retail outlets like Best Buy Comp., Inc. (BBY) and, Inc. (AMZN).

PS4 Dual Shock 4
Sony wants to average 1 million PS4 sales a month. [Image Source: Sony]

Microsoft is getting the head start on Sony in Europe, where the Xbox One launches Nov. 22 (the same dates as Microsoft's North American console launch).  Sony's Xbox One will get started in the EU retail market on Nov. 29.

Piper Jaffray Cos. analyst Michael Olson suggests that Sony may be able to meet these targets.  In a comment to Bloomberg, he predicted that Sony would sell at least 3 million PS4s this holiday season.  That would mean Sony would only need to sell 2 million consoles in Q1 2014 to meet its goal.

II. Sony Gets Aggressive Price Wise

Sony Computer Entertainment Inc. (SCEI) CEO and President Andrew House bragged to Reuters that the PS4 has "a more attractive price" than the Xbox One, or the Sony console's own predecessor, the PS3. The Xbox One retails for $499 USD; the PS4 retails for $399 USD.  The PS3 debuted in two differents SKUS -- one with a 20 GB hard disk drive (HDD) ($499 USD) and one with a 60 GB HDD ($599 USD).

Despte the aggresive pricing, Sony predicts that the PS4 -- which will initially be sold at a loss -- will achieve profitability "significantly sooner" than the PS3 did.  (Microsoft hopes to make a profit on each console sold from day one, thanks to its higher price point.)  Sony's PS3 took roughly two years to achieve profitability, finally making money for Sony in Q3 2008.  Afterwards form factor shrinks, yet again plunged it back into losses, until late 2009 when it appeared to finally become profitable for good.

Sony v. Microsoft
Sony will take a small loss on the PS4 at launch, but the Xbox One will make a profit from day one, thanks to a higher price. [Image Source: Heavy]

Mr. House commented at the Tokyo Game Show, "[Switching from custom components like the CELL processor to PC components] has enabled us to reduce the scale of investment significantly, massively so in comparison to the PS3."

Mr. House was asked about Microsoft's recent announcement that it was working on "hundreds" of TV show ideas, in addition to the Halo show it has already committed to.  Mr. House says that Sony could eventually offer up similar exclusive TV series or miniseries content to the PlayStation Network's 150 million+ subscribers, but when asked if anything was coming this year he clarified, "I don't think we are going to push the market."

It sounds like Sony is content to rely primarily on games to try to push the PS4 to the 5 million consoles sales mark in November and over the four following months.

Source: Reuters

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RE: Yeah umm....
By StevoLincolnite on 9/20/2013 12:39:30 AM , Rating: 4
If hardware and graphics is a primary concern, you wouldn't even be looking at a console in my opinion.

RE: Yeah umm....
By quiksilvr on 9/20/2013 10:10:58 AM , Rating: 1
They would be if price was an issue. Right now you can get a PS3/360 for about $200-$250. Good luck making a gaming PC for that price that can match the graphical capabilities of those.

RE: Yeah umm....
By bug77 on 9/20/2013 10:24:50 AM , Rating: 2
These consoles have video cards roughly equivalent to a 7950GTX and Radeon 1900XT. I'm pretty sure I can get a PC with those video cards (and a hard drive and a couple of GB of RAM) for $200-$250 today.

RE: Yeah umm....
By ven1ger on 9/20/2013 3:58:16 PM , Rating: 2
Somehow don't think you can do about $200-250. If you were to purchase an all new computer say about $300-350, no monitor. Even to buy a cheap computer about $300-350 you'd probably still have to dish out for the video card as low end computers don't come with very good onboard graphics, another $100-200 for the video card, and cost of keyboard, mouse?

If I was to build a computer from scratch with all new parts, I'd still be looking at about $500-$600 as a starting point.

A console is still basically a games console with some added functionality like watching movies, but a computer is more general purpose and can do a wider range of things, and each has a different price point that is acceptable.

RE: Yeah umm....
By someguy123 on 9/20/2013 5:56:20 PM , Rating: 2
Considering the A6 apu actually ends up being faster than both current consoles (able to actually run at 1080p at comparable framerates with console ports like arkham city), I'd say it's possible. A6 with an FM2 motherboard, stick of RAM, 250gb HDD, bundled case with psu, blu-ray drive. A lot of the cost would end up being windows.

Also I don't see what the monitor has to do with anything. Console's don't cost $5000 just because they require a TV.

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