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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 troysavary on 9/21/2013 3:44:54 PM , Rating: 1
So it is only bad when MS does it? Except they didn't. They changed plans in response to consumer response. So MS is evil for planning something good, then changing, but Sony is fine with actually screwing the consumer, repeatedly? I knew you had Google spunk on your chin, but I didn't realize it was a gangbang with Sony too.

Please tell me what other corners they supposedly cut. GDDR5 is not superior, or high end PCs would be using it as system RAM. It is fine for graphics memory but it ducks as main RAM because of latency. MS chose DDR3 for reasons other than just cost.

The extra processors do way more than Kinect. Sound processing will allow multiple surround sound headsets to be driven simultaneously for split screen gaming. Video processing will allow for overlays without slowing down gameplay. Besides, how do you know how many people intend to use Kinect? There are a lot of Kinect 1 games, and that was an add on. Kinect 2 being included means that development can code for it knowing it will be there.

I'll end with this. Who the he'll are you to tell others what they should or should not buy? You've turned into an irrational MS hater. Fine, don't buy it. But let the market decide whether or not the xBox One is a success. Don't try to tell me what I should buy or what should succeed.

RE: Yeah umm....
By Reclaimer77 on 9/21/2013 6:04:06 PM , Rating: 2
What corners? They're using system RAM for video for one? Who does that? Nobody. They skimped on shaders. Pure computational power is substantially less across the board. Memory bandwidth gets crushed by the PS4. A better question is how didn't MS cheap out on the Xbox, especially given that it costs a lot more.

Also you are showing so much ignorance. GDDR5 is absolutely superior. PC's don't use it because their architecture is significantly different. Hello? Please go to Anandtech and read up on this. In terms of rendering graphics, Sony's solution is flat out superior to Microsoft's half-assed system RAM

This has nothing to do with companies, or loyalties. I'm a system builder, and Sony built the better box. Its just that simple.

RE: Yeah umm....
By wallijonn on 9/24/2013 12:52:12 PM , Rating: 3
The extra processors do way more than Kinect. Sound processing will allow multiple surround sound headsets to be driven simultaneously for split screen gaming. Video processing will allow for overlays without slowing down gameplay.

Don't forget the NSA spying scare. That just bought up the possibility of someone hacking the XBOne and getting unfettered access to your living room.

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