Sony Corp may lose grip in next game consoles war with Microsoft

Tokyo, Nov 21 | Updated: Nov 22 2005, 05:32am hrs
Sony Corp the maker of Playstation game consoles, may lose its iron grip on the market for game machines as rival Microsoft Corp launches a new model just in time for the holiday season.

Microsofts new Xbox 360 will debut in the United States on Tuesday and in Europe and Japan in Dec, while Sony is not expected to launch its upgraded Playstation, PS3, until next spring.

Analysts and game fans say PS3 is the sexier game machine with twice the processing speed of Xbox 360, next-generation DVD technology Blu-ray, and seven control pads that can connect wirelessly to the console.

But Xbox 360 will have the advantage of being in time for the holidays with an initial line-up of 18 games including surefire hits like Need for Speed Most Wanted, Ridge Racer 6 and Madden NFL 06.

Sony, the worlds second-largest consumer electronics maker that dominates the console market with its Playstation 2 (PS2), may lose more than 20 percentage points of its 70 percent market share with much of that going to Microsoft. The risks are surprisingly higher than people think because unless they can replicate its 70% dominant market position, things are going to be very difficult for them going forward, said Hiroshi Kamide, a Tokyo-based game analyst for KBC Securities.

Sony has a market share of roughly 70% and Microsoft and Nintendo Co Ltd, which plans to launch its upgraded version some time next year, each hold 15% each.

The risks to the companys healthiest business would come at a time when the overall group is struggling to turn itself around after its mainstay consumer electronics business stumbled. Wedbush Morgan Securities said in an industry report in July that it expected worldwide PS3 and Xbox 360 sales to be tied at 23 million units each in 2007.

We will launch according to our own agenda and strategy, said a spokeswoman for Sony Computer Entertainment, adding that it planned to compete this year with a diverse line-up of PS2 and Playstation portable games.

Sony has not disclosed the price of its PS3, but analysts expect it to be the most expensive console ever, costing as much as $500 versus PS1 and PS2s $300 price tag when they debuted in the United States in 1995 and 2000.

Reuters