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SIMON AVERY

Thursday, March 16, 2006

Sony Corp. has delayed the launch of its new PlayStation 3 video console, giving competitors in the gaming and high-definition DVD industries an opportunity to take business from the world's largest consumer electronics company.

The PlayStation 3 was suppose to be a showcase platform for new technology and high-definition content out of Sony, including the supersharp Blu-ray DVD format and a powerful new microprocessor. But yesterday's news that the company expects to begin selling the PlayStation 3 in November, rather than this spring, has instead drawn more attention to problems inside the Japanese giant.

At a hastily arranged news conference in Tokyo, the head of Sony's video games division, Ken Kutaragi, cited a delay in setting standards for the Blu-ray DVD format as one of the reasons for the launch change.

"I'd like to apologize for the delay," he said. "I have been cautious because many people in various areas are banking on the potential of the next-generation DVD."

The decision means Microsoft Corp.'s Xbox 360 will have a full year's head start on Sony's machine and Toshiba Corp.'s competing HD-DVD high-definition technology will not be disadvantaged by millions of consumers snapping up Blu-ray-equipped PlayStations in the coming months.

Blu-ray discs can store at least five times more video, audio and computer files than standard DVDs, while HD-DVD discs can store at least four times more data than standard DVDs.

In January, more than 20 companies -- including LG Electronics Inc., Pioneer Electronic Corp. and Lions Gate Entertainment Corp. -- announced that they would bring Blu-ray disc products to market as early as the spring. The products include players, recorders, high-definition computer drives and more than 100 movie and music titles.

Those launch schedules still appear to be intact. Meanwhile, devices supporting the HD-DVD format from Toshiba are also expected this spring.

Analysts say that Sony may be handing rivals a critical opportunity to gain market share with the PlayStation 3 delay. Microsoft, which launched its second-generation Xbox device last November, says it's already on track to sell as many as five million of its Xbox 360 machines by June. Nintendo Co. Ltd.'s new console, called Revolution, is also due in stores this year.

Some of the software companies that develop games for video consoles said Sony's delay will not cause them problems.

"It's not a huge surprise," said Martin Carrier, vice-president of Ubisoft Entertainment SA, whose titles include the popular Tom Clancy series. "The rumour was out there and we got the confirmation today. We'll be ready when the platform launches."

"At least now the industry has a date to focus on and publishers and retailers alike can get down to the business of furthering plans for the remainder of 2006," said Anita Frazier, an analyst with the market research firm NPD Group Inc. in Port Washington, N.Y.

"All in all, the information is good and lets the industry move on from the uncertainty and speculation," she said.

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