Sony gets strong PS3 start in Japan

Posted by Mark Raby

Tokyo (Japan) - Over the weekend, the hotly anticipated PS3 console made its worldwide debut when it launched in Japan on Saturday, November 11. The console was virtually a sell-out within hours of store openings on Saturday, setting the pavement for the increasingly fervent North American launch this week.

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According to the French news wire AFP (Agence France-Presse), the first customer to get the console in his hands was 25-year-old Akihiro Okawa, who purchased the system from the Yodobashi Camera store in Akihabara, Japan. Okawa reportedly showed up just as the store closed on Friday, logging in a significantly long wait, but no where near the level of frenzy in the US, where consumers began waiting in line for the PS3 11 days before the North American November 17 launch.

Sony released 100,000 PS3 units for the Japanese launch, which was cut from original estimates when the electronics giant announced problems with the production of the blue laser diode in the Blu-ray component of the system. That gives an availability of about one PS3 for every 1275 people in the country.

Sony has confirmed 400,000 units for the North American launch, which is approximately one for every 833 people in the US and Canada, which is a better number than that of Japan, but it's still a huge fall from what was originally planned to be available. By the end of 2006, Sony plans to have shipped 2 million PS3 consoles worldwide. Initially, 4 million were slated for availability during the holiday season. Europe felt the cut backs the most significantly, with the holiday launch outright scrapped for that continent, and moved back to 2007.

Daniel Ernst, an analyst at New York's Hudson Square Research has said that Sony will lose more than $1.5 billion in productions costs for the PS3. Though the PS3 will sell for an expensive $500 or $600 package in the US, the amount of hardware inside each machine costs the company significantly more. Sony then expects to recoup these losses on sales of accessories, software, and digital content through the PlayStation Network. This is common practice with video game consoles.

Nintendo, on the other hand, has said that each Wii sold will actually be profitable for the company, with the $250 price point at a nominal mark-up from the real cost of producing the console.