Shortages of the PlayStation 3 (PS3) video game console should be resolved by May, Sony Computer Entertainment America chief executive Jack Tretton told Reuters in an interview Tuesday. The console remains a hard-to-get item in some areas of the country, according to the Sony executive.
“April or May is when we feel like we’re going to catch up to demand and have product fully in stock across North America and stay there,” Tretton stated. “Our goal is to fill shelves across the United States. Our goal is not to have empty shelves; it’s to have full shelves. If we have empty shelves, that’s one less consumer who could have bought a PlayStation 3.”
However, Tretton’s assertion of a PS3 shortage belies reports that Sony’s problem is not an inability to meet demand for the console but rather a dearth of buyers. Many gaming Web sites and analysts have noted that many retailers have PS3s in stock.
When he was asked about the discrepancy, Tretton responded that full shelves were “a testament to the fact that we’ve been able to manufacture and ship units on a greater pace than any previous console.”
Solutions or Delusions?
In January at the Consumer Electronics Show in Las Vegas, Sony announced that it had shipped one million PS3 consoles to North America. That announcement, however, was followed in February by an NPD sales report that ranked the PS3 third in sales of next-generation game consoles in January 2007 as well as overall sales since November, when both the PS3 and Nintendo’s Wii launched.
According to NPD, the Wii came in No. 1 with 436,000 units sold, while Microsoft’s Xbox 360 and the PS3 came in second and third with 294,000 and 244,000 units sold, respectively. Total all-time sales for the three consoles places the Xbox 360 in the lead with 4.8 million units after over a year on the market. The Wii is second with 1.5 million consoles sold, and the PS3 comes in third with 937,000 consoles in the hands of gamers.
During the first six to nine months after the release of the PS3, expectations were that the console would “fly off the shelves,” In-Stat principal analyst Brian O’Rourke told TechNewsWorld. He predicted that it would not be until the third quarter of 2007, after early adopters had gone on a buying spree, that the market would become more competitive. However, O’Rourke acknowledged the competitive moment seems to have arrived earlier than anticipated.
“The Wii, for example — when it launched, you couldn’t find it,” he stated. “You can find the PS3. I think it is selling pretty quickly. I don’t think this means [retailers] will have PS3s on the shelf gathering dust, exactly. I still think it will sell, but they are not selling every unit on the first day.”
1 Million and Counting
In the interview, Tretton told Reuters that the company was “on track to ship 2 million PlayStation 3s to retailers by the end of March. In total, Sony expects to have shipped some 6 million consoles worldwide by the end of March, following the launch of the PS3 in Europe.
“We’re in pretty good shape to do that,” Tretton said. “The early returns are quite favorable.”
Fully stocked shelves are a good sign, since neither Sony nor retailers will have to confront long lines of consumers unable to purchase the console, O’Rourke noted. “It’s a positive thing if the biggest retailers are stocked with PS3s,” he said.
From First to Third
The shipment numbers for the PS3 were greater than those for its predecessor, the PlayStation 2, after the same amount of time in the market, Mike Goodman, principal analyst at Yankee Group, told TechNewsWorld.
After a year, however, circumstances may change.
“That said, if you look at where Sony was after the first calendar year for the PS2 versus where we anticipate the PS3 being — they’re not going to be even close,” he said. “While they got off to a nice little start, and certainly Europe will give them a boost when they launch there, they are going to lag far behind the PS2 in terms of shipments at similar points in time.”
“They will also lag behind both Nintendo and Microsoft,” Goodman added.
Sony’s slide from No. 1 to No. 3 in the gaming console market is in part due to the one-year wait between its expected launch of the PS3 and the actual launch. The console’s hefty US$500 to $600 price tag also serves to inhibit sales.
Down, Not Out
While the Wii has done far better than expected, in the long run sales of the Wii and Xbox 360 will begin to flounder in the next few years, Goodman said. That will open the door for the PS3 to regain its former stature in the console world, he added.
“I’m not convinced that the Wii has legs,” Goodman explained. “Nintendo does well for about two years and then starts to crater, and I’m not convinced that that won’t happen again.”
Now, in the early stages of the Wii, Nintendo has been successful in attracting new console users and gamers from other consoles, but as prices come down on the PS3 and the Xbox 360, the Wii will not be as compelling, he continued. Games are the driving force to a particular console, and the Xbox 360 and PS3 will be “vastly superior” to the Wii in terms of games and hardware.
“Is having a funky controller going to be enough to attract an audience away from a lower price and vastly superior games?” Goodman questioned.
In the short- to mid-term, Sony is between a rock and a hard place, he stated. “By like 2011, 2012, I believe Sony will have regained its console crown.”
Ultimately, Sony will be king of the console hill once again after it lowers the price of the PS3, Goodman predicted. “The only thing that will do that is time. It will probably be two to three years before the mass market will really begin adopting this thing. That means that right about the time the Wii and Xbox 360 begin to slip, you should see the PS3 going strong.”