Sony this week said it would delay the release of its new PlayStation 3 video game console until early November because development of some of the technology was behind schedule.
The company, which dominates the game console market with a market share of about 70 per cent, said it planned to launch the much-anticipated PlayStation 3 (PS3) almost simultaneously in Japan, the US and Europe in time for the key holiday season.
"When we initially announced our plans to launch this spring, we had expected the standardisation work on all of the technologies to be completed by last August, but there were improvements that were decided on since then," said Ken Kutaragi, president of Sony's game division.
"We wanted to be sure to include all future technologies that are available now."
The PS3 launch date has been the subject of heavy speculation in the industry as expectations are high for the machine, which will have cutting-edge technology and is expected to enable users to play games and movies, as well as download videos from the internet.
A six-month delay in the launch date could mean handing further advantage to rival Microsoft, which launched its competing Xbox 360 console last November. Sony is now also likely to go head-to-head with Nintendo's Revolution console, which is expected to hit markets around the same time.
Sony shares fell 1.8 per cent ahead of the news. "[ The delay] is negative news, but it was expected," said Mitsubishi UFJ Securities analyst Hirotoshi Murakami. "The launch date is before the Christmas shopping season, so it is avoiding the worst scenario."
Toshiaki Nishimura, senior analyst at Yasuda Asset Management, said he believed the delay was likely to have a short-term impact on earnings.
US-based Electronic Arts, the world's biggest video game publisher, had expected a US launch in the same time frame as Sony. "It doesn't change our development plans," said EA spokeswoman Tammy Schachter.
The market expects Sony to post an operating profit of 167.04 billion yen in the business year from April.
KBC analyst Hiroshi Kamide said the delay of the PS3 also boded ill for Japanese software developers, many of whom rely on PlayStation's popularity to drive revenues.
Mr Kutaragi blamed the delay on the belated finalisation of the copy protection technology standard for the Blu-ray disc drive, a next-generation DVD player that will be included in the PS3. The standardisation of digital audio and video technology to connect electronics devices was also late, he said.
Mr Kutaragi said Sony planned to produce one million PS3 units a month initially, for a total of six million units in the business year ending March 2007.
"This may not seem like much, but it's more than the initial capacity for PlayStation 2," Mr Kutaragi said, adding that near-final tool kits to develop games would be available to software makers by mid-May. Analysts expect the PS3 to cost about $500 (€417) with an initial line-up of five to 10 games.
