Sony Playstation 3 rollout cutbacks: bad news, but good risk management

Last month, I noted that Sony's launch preparation for its Playstation 3 appeared to be ahead of the pace Microsoft set last year with its Xbox 360 launch. However, that hasn't made Sony immune to setbacks to its schedule. According to the International Herald Tribune, European sales of Sony's PlayStation 3 will be delayed until March. Further, because of a shortage of blue lasers, production will be reduced from initial goals. Sony had planned to have 2 million units available for world-wide launch in November; now, that number has been cut back to 500,000, of which 400,000 will be for the US market and 100,000 for Japan. By the end of the year, Sony now hopes to ship 2 million Playstation 3s, where it had previously planned to ship 4 million. Projections for sales by the end of Sony's fiscal year of March 31, 2007 remain at six million.

While this is clearly bad news for Sony, I have to give Sony some credit for focusing their efforts on just two markets instead of attempting a world-wide launch with limited stock as Microsoft did last year. Europe's panoply of languages, tarifs, voltages, and regulatory standards poses much larger marketing and distribution challenges than the somewhat more homogeneous markets of Japan and the US. With only two languages, one voltage, and two regulatory environments for the initial rollouts, Sony should be able to put more of its energy into debugging, production, and marketing efforts in the two markets where it will launch. While it doesn't change the bad news of short supplies and poor production, it at least maximizes the odds of good customer experiences with the units they do have.

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