PS3: Pleased to meet you

Feature: PlayStation 3 - the story so far

Consider this: no previous console selling above the $400/£400 mark has ever been a success. So has Sony really dropped the ball? We take a look at the PS3's journey so far and assess its prospects for massmarket dominance.

Anyone who's seen a PS3 running on a beautiful HDTV will be in no doubt that it's an emotionally stirring and exciting piece of kit. But the road to retail was rocky to say the least. Delayed by over a year and with manufacturing costs spiralling ever upwards there's still considerable doubt consumers will buy into a games machine retailing for £425.

The real cost of PS3

There's no question that forking out £425 on a game console is excessive (especially when you consider it retails for $599 in the US (£304) and 59,980 Yen (£250) in Japan). But Sony's strategy was always ballsy: it set out to future-proof the machine by giving it a potential shelf life of ten years.

The PS3's Blu-ray optical drive, bespoke chips, RSX graphics processing unit and Cell Broadband Engine are estimated to cost more than $600 and that's before you consider all the other components and manufacturing costs.

In fact, Sony is rumoured to be making a loss of around $250 on every PS3 sold. The only sweetener - if you're willing to wait - is that all this technology will inevitably come down in price leading to price drops in the future.

Pleased to meet you?

The launch of a console is never a true reflection of its eventual success; while PS3 sold out in both Japan and the US when it hit shelves back in November 2006 the real figures tell a different story.

Sony set itself a worldwide shipping target of 6m units by March 2007, however a recent report by Numura Securities suggests that Sony has achieved only 75 percent of its fiscal year's sales following lower than expected results in the US. The report went on to say that only 4.5m units are likely to be in homes by Sony's March deadline. Which is no disaster but when you consider Nintendo's Wii is selling around double the number of PS3 units in both Japan and the US then Sony should have pause for thought.

Indeed, anecdotal evidence suggests that retailers in the US are struggling to shift PS3 units and some Japanese stores have begun implementing discounting strategies to increase sales. According to Bank of America lackluster PS3 sales will also be a major blow to publishers as 21 percent of their revenue is pinned on PS3 software sales. Based on recent channel checks at 50 US stores 78 percent had PS3s in stock. Sony argues this is due to healthy distribution.

Whichever way you cut it there's a general feeling that PS3 is underperforming due to a less than stellar software line-up and the high price. In the UK retailers such as Gamestation and Game still have many pre-orders available, which tells its own story.

Videogame Hardware Sales - US (Jan 1st - Jan 31st 2007)

Platform Units Sold
Wii 437,000
PS2 301,000
Xbox 360 295,000
PS3 244,000
DS 239,000
PSP 211,000

Videogame Hardware Sales - Japan (Jan 1st - 21st 2007)
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