"Analysts in Japan are warning Sony not to be complacent in the next generation battle with Microsoft. Meanwhile, Famitsu's boss says he does not expect to see a "full line up of games" for the PS3 for at least a year.

Sony's PlayStation business is one of the brightest spots for the company, otherwise troubled by increased competition in the consumer electronics market. Some analysts are concerned that the high price of the machine, the cost of developing games, and Sony's late arrival will lead to diminished market share and lowered profits.

In a Reuters article, Hiroshi Kamide, analyst for KBC Securities said, "The risks are surprisingly higher than people think because unless they can replicate its 70 percent dominant market position, things are going to be very difficult for them going forward."

Hirokazu Hamamura, president of Famitsu added, "PS3 will do very well, but it's said that development costs will be high and it'll take longer to make games, so it's likely that it won't have a full line-up of games until the end of 2006 or the beginning of 2007."

Koichi Hariya, senior analyst at Mizuho Securities said, "Sony has to launch a new game machine every four, five or six years to maintain the game division's strength" adding that PS3 will probably struggle to repeat the high profitability of PS1 and PS2." [more]

Direct Link: Japan Analysts Offer PS3 Warning