October 2, 2008

Sony Reports Better Than Expected PlayStation 3 Sales

Sony Corp said on Wednesday its PlayStation 3 video game console and its portable cousin, the PSP, are selling faster than expected and are poised to meet full-year sales targets even if the current economic crisis hurts holiday demand.

Jack Tretton, Chief Executive of Sony Computer Entertainment of America, said PlayStation 3 sales are some 30 percent better than Sony's plan so far in its fiscal year, driven by solid demand by video games, and the appeal of the Blu-ray disc movie system built into the devices.

As a result, he anticipates sales of the PS3 to reach a previously announced target of 10 million units by the end of the year, in March 2009.

He believes the company is in good shape for that number worldwide. "We are tracking at 100 percent up over last year ... about 30 percent ahead of where we should be. So sales could slow down and we will still hit our number."

Sales could be affected by product shortages which Tretton says he anticipates will not be drastic.

"I'd say we are able to meet somewhere between 80-90 percent demand, based on how things are trending," he said.

PSP sales are 20-30 percent ahead of plan and are well placed to meet the Japanese company's target of 15 million units sold.

Starting in the mid-1990s, Sony dominated the global video game industry for a decade, but sales of the PS3 have lagged behind Nintendo Co Ltd's Wii console. It now has to come to grips with a recent price cut for Microsoft Corp's Xbox 360, its other main rival.

Other industry players suggest the $22 billion video game industry may be relatively shielded from the economy's troubles. Specifically, he says that multimedia devices like the PS3 and PSP have multiple uses and therefore can be enjoyed by members of an entire family.

Tretton thinks people are going to question every dollar that they spend, but they are going to look for value in return. "The entertainment value ... with PlayStation 3 compares very favorably to other entertainment choices."

And as economic concerns grow, that optimism hasn't protected Sony's shares from declining sharply. Sony shares trading on the New York Stock Exchange have declined some 20 percent in the past month.

Sony Corp's stock decline was hastened by Wall Street analyst's downgrades in mid-September, due to concerns over the outlook for Sony's over major electronics operations, including its flat TV, mobile phone and digital camera businesses.


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