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Sony pushes pause on PS3

Business briefing for clients turns into press conference

In a significant blow to its dominant stance in the vidgame market and plans to promote the new Blu-ray high-def DVD format, Sony has confirmed it will delay release of its PlayStation 3 console until November.

Many expected the pushback from spring, when Sony was originally targeting release, following a report in a Japanese newspaper on Tuesday (Daily Variety, March 15).

However, many had speculated that PlayStation 3 might not hit North America until next year, following a November release in Japan. But company has instead committed to a simultaneous worldwide release in all major markets in time for the holiday shopping season.

Sony Computer Entertainment topper Ken Kutaragi told industry analysts, software developers and media at a Tokyo meeting that the main reason for the delay is problems in finalizing copy protection specs for the PS3’s Blu-ray disc player, the next-generation video system that will be used on the PS3. All PS3 games will be in the Blu-ray format.

Many studios were motivated to provide their content on Blu-ray, instead of Toshiba’s competing format HD DVD, because of its inclusion in the PS3, which will also play movies and music.

Delay gives a leg up to Microsoft’s Xbox 360 next-gen gaming system, which was released last November and won’t face competition until the PS3 and Nintendo Revolution are released in the fall.

Microsoft plans to release a plug-in drive that allows the 360 to play HD DVD discs. Sony is targeting PS3 production at 1 million units a month, with a goal of 6 million produced by March. Microsoft is aiming to ship about that many units of the 360 by June.

In reaction to the announcement, Sony shares dropped 1.8% to $46.36 on the Tokyo Stock Exchange, a sign that the market had been expecting a delay and had already factored it into Sony’s share price. Troubled Sony Corp. counts on its successful videogame unit to support the company overall. PlayStation 2 has sold more than 80 million units worldwide compared with more than 20 million for competitors Microsoft Xbox and Nintendo GameCube.