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Monday, August 15, 2005

2007 PS3 Release?

2007 PS3 Release?

"Buried in an analyst's memo, written shortly after last week's Electronic Arts earnings call, was a hidden gem. According to the widely read team at Wedbush Morgan Securities, Sony may delay the release of the PlayStation 3 until 2007--if exactly the right conditions prevail.

Currently, the console is slated to appear in Japan before the end of that company's fiscal year--March 31, 2006--and in North America before the end of 2006.

Given the right set of circumstances, however, that release window (at least in North America) could intentionally lag until after the 2006 holiday buying season.

In a research memo sent to investors, Wedbush senior analyst Michael Pachter set up the following scene for a delayed PS3 launch. It starts with the current-generation Xbox being priced down to $149 post-Xbox 360 launch, but no lower. Concurrent with that situation--an Xbox 360 at an unspecified price and the backward-compatible Xbox at $149--Sony would drop the price of the PlayStation 2 to $99.

There are two components to that pricing strategy: the first is that a $99 PS2 would offer a significant distraction as the 360 launches. As Pachter states: "We believe that the company will attempt to disrupt the Xbox 360 launch with a price cut, and as a result may succeed in diverting attention away from the higher-priced next-generation console." [more]


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