Kutaragi: Sony hardware "in decline"

Last week, Sony spawned a cavalcade of negative news reports when it announced it had delayed the European launch of the PlayStation 3 until March 2007.

Nearly simultaneously, the company revealed that instead of having 2 million PS3s available at launch in the US and Japan, the company would only have 500,000. Of those, 100,000 would be allocated to the console's November 11 Japanese debut, and 400,000 would be sent to North America, where the console goes on sale November 17.

Needless to say, the gaming press had a veritable field day with Sony's misfortunes, spawning accusations of bias--and everything else short of human trafficking--from the PlayStation faithful. Today, though, the leader of their flock, Sony Computer Entertainment president and CEO Ken Kutaragi, conceded to the Reuters news service that the European delay and American-Japanese launch-shipment reduction had set his company back in the next-gen console conflict.

"If you asked me if Sony's strength in hardware was in decline, right now I guess I would have to say that might be true," Kutaragi told Reuters, in a moment of candor rare in the tightly controlled information flow currently endemic in game-industry media relations.

The Reuters report went on to quote analysts' doubts about Sony's strategy. Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, told the news-wire service, "All of this has raised concerns about whether there is something fundamentally wrong with Sony's manufacturing process, and it could further damage the Sony brand."

The report went on to cite the recent Sony laptop battery recall as another problem that is dogging the iconic electronics giant, whose PlayStation 2 is by far the most popular console on the market today. However, that market-share strength and the company's traditional resilience has even its skeptics harboring hope. "Sony has no doubt passed through the worst stage," said Akino. "But investors can't let their guard down."