Why the Console War is Over

Sony blames the delay on a manufacturing problem with the PS3’s untested and expensive Blu-ray optical drive. “This became a typical result of not knowing what to expect with a brand-new component,” Sony executive Ken Kutaragi, the head of the company’s game division, said. “This was a completely unexpected problem. There’s nothing I can say except, ‘I’m sorry.'”

You could say, “Game over.” Sony has suffered embarrassment after embarrassment with the PS3 and its troubled Blu-ray hardware. This latest delay and the lowered availability estimates mean that the company will lose out on crucial revenues and momentum during the holiday selling season.

Meanwhile, Sony’s key competitor, Microsoft, has already taken advantage of this situation. Last year, Microsoft pulled off a simultaneous worldwide launch for the Xbox 360, though availability of the next-generation console was tight until early 2007. Microsoft, as you might expect, offered words of encouragement to its stumbling rival. Sort of.

“We know how challenging it is to pull off a global launch, so it’s not surprising that Sony has backed away from their previously announced launch plan, due to the unproven technology they are trying to pack in to their console,” Microsoft Xbox U.K. boss Neil Thompson said. “Europe remains a priority for us. That is why gamers have been able to experience Xbox 360 [there] from day one, and why we’re confident we’re going to have a great Christmas–regardless of what competitors are or are not in the market.”

Although Microsoft still says has reached its goal of 10 million Xbox 360 consoles sold worldwide, Sony’s goals, suddenly, are much less lofty. The company offered only 2 million PS3 units to the U.S. and Japanese markets, less than half of what it previously promised. And just 400,000 consoles were available on November 17, the day the PS3 launched in the United States.

Regardless of who has the better technology, the better price-point, or better games, parents and children alike can’t get enough of Nintendo. If it wasn’t the Wii, it was the DS and GBA. Hands down, Nintendo products were the most impossible to get last holiday season, and supplies of these sought-after systems continue to be short. But, this isn’t an argument about why the DS and GBA have sold so well. The Wii has come from behind and clearly won the race.