Sony: PlayStation 3 is Back on Track

Sony's eagerly-awaited but almost completely unavailable new PlayStation 3 (PS3) has been a debacle of sorts this holiday season, but the company maintains that it is still on track to hit its previously stated sales targets. Sony says it will sell 2 million PlayStation 3 consoles by the end of 2006, and 6 million by the end of March 2007.

To hit these numbers, of course, Sony will have to overcome the parts supply issues that have dogged PS3 production. And the company maintains it has done just that. "With the PS3, the bottleneck has been availability of blue lasers but now production of those has been launched in volume," said Sony president and chief executive officer Ryoji Chubachi on Wednesday. "We did take time preparing ourselves but as of today we have reached our target production rate."

Demand for the PS3 has well exceeded the paltry supply Sony has provided to Japan and North America, the two major markets in which the device is now being sold. More problematic for Sony, however, is that the PS3 shortages have proven very beneficial to its competitors. Sales of Microsoft's Xbox 360 are up and Nintendo's recently-released Wii has sold out, like the PS3, though it was available in much higher volume.

For ailing Sony, this holiday season could prove an important milestone. The company is counting on sales of big screen TVs, digital cameras, and even the previous generation PlayStation 2 to make up for shortages of the PS3. But if Sony can get PS3 production moving, and start shipping the device in volume to Europe by 2007, it still has a chance of meeting its sales goals and reasserting itself as the dominant player in the video game market. For this holiday season, however, the consumer electronics giant will have to wait and watch, and hope for a better 2007.

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