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Sony's PS3: The Empire Strikes Back


"I'm betting Sony and giving Fish the 8-million console lead"

Video Game enthusiasts are even more atwitter than their hyper-caffeinated norm this week as E3 2006 gets underway way in Gomorrah, California. E3 has become the Big Daddy of gamer conferences; it's where the industry goes to take the wraps off their best products for the coming year.

Like an autoshow for shut-ins.

The big news this year is the semi-unveiling of Sony's (SNE) counter-punch to the Microsoft (MSFT) Xbox360, so memorably rolled-out this year. The full details can be seen here, in a real-time blog kept at during Sony's presser last night. Yup, a real time blog. I imagine there will be crudely rendered graphics of tumbleweeds drifting throughout SimCity all this week with the attention E3 gets in certain social-circles; especially during a console-transition year.

In any event, the PS3 is set for release on November 17, priced at $499 as compared to $399 for a 360. For the extra 100 bucks and a six month wait, buyers of the PS3 get a remote control that responds to spatial movements, an uptick in graphics and, for an extra 50-cents, a small box of Vitamin D milk, to help ward off rickets.

The big question is whether Microsoft's effort to grab market share ahead of the PS3 will allow Mr. Softie to retain the lead, once the PS3 hits the shelves. The PS3 seems to be a better mousetrap and the $100 price spread isn't likely to be much of an obstacle in an industry where next-gen games figure to run about $60 per title (if Electronic Arts (ERTS) and the rest get their way).

For their part, Microsoft is reduced to pushing the 360 into the market as fast as their supply chain permits between now and November. There is skepticism in Redmond that Sony will be able to meet their November 17th deadline. In another example of Microsoft's mangled message to the Street, company executives are citing MSFT's failure to release their own console on time as a reason to expect Sony to miss.

Now... it may be true that Sony misses the 11/17 release date for the PS3. Maybe Microsoft will be right. Still, what does it say when what was once the most feared company on earth is reduced to Hoping (in this case, hoping Sony fails) as a key element of a business plan?

If Sony hits the deadline Microsoft will have gone through their Xbox360 release agonies for nothing. They will have screwed retailers, the gaming software industry, customers and shareholders to get to market first and will still end up with, at best, half the pie despite a 10-million console head-start.

Microsoft may have bottomed, stock-wise, as Fish argues here. The stock could work from here even if Sony beats Microsoft to a pulp in this console war. Microsoft certainly has other businesses a bit more important to their cash-flows than video games.

My money is staying away from Mr. Softie either way and still hating the attitude. Microsoft's official press-conference responding to Sony and revealing 360 developments will be held today at 1pm, West Coast Time. It will be streamed live, of course, and I'm certain real-time comments will be available across the web. For my part, I'll either be heading to the golf course or trying to log into SimWorld for a little opportunistic burgling.
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