Spring has sprung ... a leak, it seems. Sony ( SNE) will delay the launch of its upcoming PlayStation 3 until early November. Previously, the company had said it planned to release the new game console this spring. Meanwhile, breaking with the company's past practices, Sony plans to roll out the device simultaneously in North America, Europe and Japan. Sony announced the PlayStation 3 delay at a news conference in Tokyo on Wednesday. Ken Kutaragi, who heads Sony's video game operations, blamed the delay on the lack of a final standards for copyright protections and other technologies that are expected to be a part of the next-generation DVD disc at the heart of the PlayStation 3, according to an Associated Press report. The standards for the so-called Blu-ray disc, which will store eight times as much data as a regular DVD disc and enable the sale of movies in high-definition format, were supposed to have been completed last September, Kutaragi said, according to the AP. But now they aren't expected to be done until next month, he said. "I'd like to apologize for the delay," Kutaragi said, according to the AP. "I have been cautious because many people in various areas are banking on the potential of the next-generation DVD." The company seemed to try to cushion the blow of the delay by announcing Wednesday that it will slash the price on its PlayStation Portable handheld game system. The retail price on the popular system will fall from about $250 to about $200 in the U.S. Many analysts had expected Sony to cut the price on the PSP before the holiday season. Price cuts typically juice sales of game systems -- and game titles.
Sony's decision to launch the PlayStation 3 in three markets at once is a risky move that copies the launch plan that Microsoft ( MSFT) followed with its rival Xbox 360 console this past holiday season. Microsoft failed to meet demand for the device during the holidays, particularly in North America, and some analysts have blamed the problem in part on the company's attempt to ship to three markets at the same time. However, Sony could see somewhat better success. The company said it will be able to ship 1 million PlayStation 3 units worldwide at launch, meaning that it could have nearly 2 million out by the end of the year. In contrast, Microsoft shipped 1.5 million Xbox 360s by the end of 2005. Regardless of how well Sony can meet demand this holiday season, its machine will at least be in the market. Some analysts had feared that Microsoft might be able to amass an insurmountable lead in market share for next-generation game consoles if it had another holiday season to itself. The Nihon Keizai Shimbun first reported Sony's decision to delay the PlayStation 3 on Tuesday, citing the problems with reaching an agreement on copyright protection for the Blu-ray format. The ability to play Blu-ray DVD discs is expected to be one of the key features of the PlayStation 3. Many analysts expect the PlayStation 3 to help drive adoption of the new disc format by being the least expensive Blu-ray player on the market when it launches. But copy protection has long been a bone of contention with the new format. Filmmakers and other content creators have been pushing for enhanced copy protection on next-generation DVDs to prevent piracy. Current DVDs use encryption schemes that are easily broken, and content owners argue that this has or could hurt sales. Rumors have been
swirling in recent weeks that Sony would delay the PlayStation 3. Although the company had previously predicted the device will launch this spring, it has not given any more definite launch plans such as the actual date of the release or how much the device will cost at launch. Sony gave no other details about the PlayStation 3's launch. The company has not yet set a price for the device or said how many or which titles will be available for it at launch, or specified when in November it will debut in the various markets. The delayed launch of the PlayStation 3 could be a mixed blessing for video-game publishers, which have been struggling with a rocky transition to new game technology. On the one hand, the delay means that publishers will have to wait longer than expected to see any return on the investments they've made in PlayStation 3 games. On the other hand, they now have a more definitive date for the system's launch, and the system should benefit from the holiday sales season. Shares of Sony were recently up 69 cents, or 1.5%, to $47.20.