Sony expects a hot start for the PlayStation 3

Sony Corp. expects its upcoming PlayStation 3 console to be out of the starting gate more quickly than Microsoft Corp.’s Xbox 360, it said Thursday.

The company, which recently pushed back the launch of its console to November, said it expects sales during the first four to five months after launch to be about 6 million units. Microsoft, which launched the Xbox 360 in November last year, expects sales to hit between 4.5 million units and 5.5 million during about the first seven months.

Sony has spent about ¥50 billion (US$425 million) during the past year on development and launch preparations for the PlayStation 3, said Nobuyuki Oneda, Sony’s chief financial officer, at a Tokyo news conference to announce the company’s full-year results.

“After the introduction of the PS3 we will focus our efforts on expanding the platform as rapidly as possible,” Oneda said. “We will also attempt to lower the manufacturing costs by reducing the number of parts used in hardware and reducing the costs of the semiconductors and other key components. By so doing, we aim to bring the PS3 business to profitability at the earliest possible time.”

During the fiscal year just ended, Sony shipped 16.2 million PlayStation 2 consoles. The number is slightly higher than the year earlier but Sony expects this to fall rapidly during the current year as customers favor the soon-to-be-launched PlayStation 3. Sony said it predicts about 10 million PlayStation 2 consoles will be sold this year.

The handheld PlayStation Portable device did well during the year, but again Sony expects sales in the current year to decline. The PSP, which was launched in Japan in late 2004, shipped 3 million units in its first few months on sale. In the following 12-month period shipments were 14.1 million units, Sony said Thursday. For its current fiscal year, from March to April 2007, this is expected to drop to 12 million units.

Software shipments for the PlayStation consoles hit 267 million units, which is just below the previous year’s total. Within this, PlayStation 2 software shipments dropped 12 percent, and PlayStation Portable software shipments jumped more than 600 percent.

Overall, Sony’s game business saw sales increase by 31 percent to ¥959 billion, while the division’s operating profit sank 80 percent on PlayStation 3 start-up costs, to ¥8.7 billion.

Updated 12:17 PM April 27, 2006: Due to a reporting error the currency conversion of Japanese yen to US dollars was incorrectly reported as $41 million instead of $425 million. That error has been corrected.

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