This morning in Tokyo, Sony Computer Entertainment president Ken Kutaragi announced that only 500,000 PlayStation 3s would be available in the US and Japan at launch, and that the console's European debut had been pushed back until 2007.
Of the 500,000 launch PS3s, 100,000 will go on sale in Japan on November 11, and 400,000 will hit store shelves in North America on November 17. "We decided to focus on the Japanese and US markets," Kutaragi told reporters at a Tokyo press conference before apologizing for the delay, according to the Associated Press. Reuters echoed the numbers and said that Kutaragi had lowered the worldwide 2006 PS3 shipment target from 4 million to 2 million.
When initially contacted by GameSpot about today's PS3 news, Sony reps said only that the company had "not announced specific ship numbers for Japan or North America." They also said that, despite the European delay and the reports of reduced shipment numbers, the previous estimates still stood. "[We] have announced that 2 million will be available in the world come November 11 and 17, and 4 million by the end of the calendar year," said a spokesperson.
However, later in the day, Dave Karraker, SCEA's newly appointed head of corporate communications, told GameSpot that the wire-service figures were correct. "400,000 is just the day-of-launch figure," said the executive. "1 to 1.2 million units [will be] available in North America by December 31." This afternoon, Karraker confirmed the reduced international numbers to The Rocky Mountain News. "Worldwide, there will be between 2 to 2.4 million units available in North America and Japan by the end of the year," he said.
Karraker also claimed that, while reduced, the US PS3 launch numbers bested those of another next-generation console. "By the end of the year, we will have...more than double what Microsoft sold through of Xbox 360 [in 2005]." He reiterated this sentiment to MTV News. "The supply we have at launch is comparable to what was available for the PlayStation 2, not Xbox 360," said Karraker. "The total allocation for units in North America...is just less than what we had for PS2 and more than Microsoft had for Xbox 360."
Both the PS2's October 2000 launch and the 360's November 2005 debut were plagued by widespread sellouts, long lines, and occasional scuffles at US retailers. Sony estimates it had around 500,000 PS2s available day of launch. By contrast, NPD reported that Microsoft sold around 326,000 units by the end of November 2005. However, the hard-to-find next-gen console moved just another 281,000 units during December, bringing the 2005 total to around 607,000 units--half the number of PS3s Sony believes it will sell this year in North America.
Speaking to MTV News, Karraker urged calm among prospective PS3 purchasers. "People shouldn't fixate on the day-one allocation number," Karraker he said. "They should instead be more interested in the overall units available through the holidays, which will be 1 million to 1.2 million, which are significant amounts that will provide retail supply week over week with no dips in available stock." This was likely a veiled reference to the fact that many 360 retailers did not have the console in stock for weeks--or months--after it went on sale.
Though the flurry of various launch figures was initially confusing, one thing has always been perfectly clear. Sony is officially sticking to its original PS3 sales estimates for its current fiscal year, which ends on March 31, 2007. "The previously announced PlayStation 3 shipment forecast of 6 million units globally within the fiscal year ending 2007 is not changed," the company said in a statement issued early this morning.
Karraker also offered an explanation for the PS3's European delay and US-Japanese supply problems. "The PlayStation 3 is a revolutionary, as well as evolutionary, product. If we were simply putting out PlayStation 2.1, it would be much easier to hit a worldwide launch," he said. "As it was, Ken Kutaragi set very ambitious goals for the PS3, based on what he felt we could achieve. The simple fact is that many of the components for the PS3, particularly the blue laser diode, had never been produced on a mass scale before."
The blue laser diode is a critical component of the high-capacity Blu-ray Disc drive that is at the center of the PS3. Sony is pushing the cutting-edge format, which can hold up to 50GB on a single-layered disc, to be the high-definition successor to the DVD format. Microsoft is backing a rival format, HD-DVD, and will offer an external HD-DVD drive this fall.
But for all of Blu-ray's promise, manufacturing players for the format has proven more than a little problematic. In February, Sony hinted blue laser diode production problems could delay the PS3 from its then-scheduled Spring 2007 launch. The new November launch date was confirmed at Sony's Electronic Entertainment Expo press conference in May, the same month Sony announced the US launch of the Blu-ray format had been pushed back. Meanwhile, in July, several Taiwanese business newspapers, including the Commercial Times, reported that Sony was falling behind in production of blue laser diodes, although Sony would not confirm those reports.
Analysts were swift in their response to the PS3 news. UBS's Michael Wallace predicted the delay could have an alarming ripple effect with third-party publishers. "We also think this delay could cause some of our companies to push some of their PS3 games out until March 2007 to take advantage of a larger installed base," he said in a statement. "We note that Activision (three launch titles), Electronic Arts (four to five launch titles), and Take-Two (three titles by January 2007) currently have the greatest exposure to the PS3 at launch, so they could be impacted the most by this delay."
Today's PS3 developments caused Wedbush Morgan Securities' Michael Pachter to lower his entire US annual software sales estimate--just issued yesterday--from three percent growth to two percent. He also tweaked his European annual game-sales estimate from one percent growth to a one percent loss. "Our prior forecast assumed that Sony would ship 2.3 million PS3s to the US and Europe in 2006," said Pachter. "Our revised forecast assumes shipments of 1.5 million to the US (unchanged) and zero to Europe (down from 800,000)."
Needless to say, the PS3's delay and any supply issues will be a boon to Sony's rivals, Nintendo and Microsoft. "There will undoubtedly be some 'substitution effect' from lower PS3 shipments, with a portion of the shortfall offset by higher sales of PlayStation 2, Xbox 360, and Wii hardware and software," Pachter said. "We have not adjusted our model to reflect this substitution...but we suspect that 25 to 50 percent of the shortfall in PS3 software sales (an estimated $124 million in Europe) will be offset by sales of software for the other platforms."