Sony (NYSE: SNE) is building a virtual community for video-game players who buy its PS3 video-game console. It has been delayed again, which may say something about why the Microsoft (NASDAQ: MSFT) Xbox 360 and Nintendo Wii tend to thrash it in the sales department.
According to The Wall Street Journal, "The service will let users create avatar characters, decorate homes and interact with other users in a virtual world." It was supposed to come out in 2007, and now it may be out late this year. Microsoft has had an interactive aspect to the Xbox for more than two years. It allows game-players to compete against each other over broadband connections. The Microsoft product also facilitates online chat and downloads of video games and movies.
Investors would think that Sony would put a higher priority on its PS3 platform. The PS2 was the flagship of Sony's consumer electronics operations and was a tremendous driver of operating income for the Japanese company. The losses from the company's game division have been a drag on earnings for over a year because the PS3 has not been a big winner.
Sony still has not gotten the PS3 right. First, it was late to market. Then, it did not have enough new games. Finally, it was too expensive and Sony dropped the price. Now, it is missing something that consumers expect.
Saying 'oops' is not enough for shareholders.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
4-23-2008 @ 1:56PM
kevin said...
The delay of Sony's "Home" service won't have a material impact on sales of the PS3. Most consumers will have no idea what the service is all about until it launches. The main priority for Sony is to streamline the developer tools and to assist the various publishers/developers with their upcoming games! You should watch the upcoming sales of GTA4 and Metal Gear Solid for a guage on how well Sony's PS3 will do. My guess -- this is a good time to buy SNE.
4-23-2008 @ 4:05PM
Alex said...
Wow, what a biased article..! I saw no concrete evidence stating Sony was losing money on the PS3, nor anything that would indicate a delay would further inhibit downward sales of the gaming console...'Kevin' posted a keen observation that sales would increase with the release of Metal Gear Solid, a trend similiar to XBox's release of Halo3...Niether was there mention of the potential market increase with Blue Ray winning out...This read as a poorly disguised article bent on attacking Sony...
4-23-2008 @ 4:51PM
E.J. said...
I think that an objective look at both platforms would reveal that MS's chief advantage is a stable of superior exclusive games (Halo,Gears Of War, Bioshock, etc.). Personally, the fact that online PS3 gaming is completely free and doesn't suffer system-wide outages offsets MS's superior online integration. So the Home delay isn't a dealbreaker so much as a delayed opportunity - I think Nintendo is selling a little product without great online integration that's doing okay ;).