Sony sails to geek aisles

Playstation 3 is key to next-generation plans

The future of Sony Corp., and Howard Stringer‘s strategy to revive it, will rest this week on the reactions of thousands of geeks gathered in downtown L.A.

At the E3 videogame industry confab, Sony will finally unveil its long-awaited Playstation 3.

Its success is crucial for Sony’s vidgame division, which dominates that industry with its Playstation 2; the game platform has more market share than the Microsoft Xbox and Nintendo Gamecube combined.

But there’s much more than games at stake for PS3.

Industry is counting on it to be the key driver for adoption of Sony’s Blu-ray high-def DVD format. Many studios chose to align with Blu-ray instead of, or along with, its competitor HD DVD because the PS3 will play Blu-ray discs.

They’re counting on consumers buying the PS3 for its gaming capabilities and becoming Blu-ray converts in the process.

Disney, Fox, Par,, WB and, of course, Sony Pictures and MGM are all committed to the format. And since it controls the technology, Sony gets a cut for every Blu-ray disc sold.

With its built-in broadband Internet connection, Sony’s also hoping to use the PS3 to become the center of consumers’ digital homes.

Sony is expected to launch an online gaming service similar to Microsoft’s Xbox Live that lets players compete through the Internet.

That service could also let Sony sell movie, TV, and music downloads from its own studio and labels, as well as others, and position itself as a key player connecting consumers, their TVs and digital content.

But the PS3 has already faced its share of problems. Release was recently delayed from this spring to November, giving the Microsoft Xbox 360 a full year to establish itself in the market alone. (Nintendo also launches its next-gen console Wii this November, but it’s not going after the same hardcore gamer demo.)

In addition, Sony recently admitted it expects to take a “significant loss” on the PS3 launch, in large part because the Blu-ray disc drive is expensive and the conglom will have to sell each unit below cost and hope to make up the difference through game and Blu-ray disc sales.

Of course, it all depends on Sony’s getting the PS3 into homes in the first place.

That means it has to impress the videogame industryites and press at E3 who will be the first to spread the good — or the bad — word.

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