News Column

FOCUS: Struggling Sony counts on gaming unit in face of Microsoft challenge

June 10, 2014

Keiichiro Otsuka



Sony Computer Entertainment Inc.'s release of a plethora of software titles in the coming month for its PlayStation 4 machine will likely be followed closely by its financially struggling parent company.

As the 2014 Electronics Entertainment Expo, or E3, opened Tuesday, Sony Corp. is betting that the software lineup for SCE's successful game console will help shore up its bottom line, being chiefly eroded by charges linked to the closure of its money-losing Vaio PC business.

But the Japanese electronics maker is likely to face a tough challenge in the game business from U.S. software giant Microsoft Corp., which is targeting the same consumer segment as the PS4 with its Xbox One machine.

"We will provide gamers the best place to play," said SCE President and Group CEO Andrew House, expressing confidence in the upcoming game titles unwrapped at a press event on Monday ahead of the general opening of E3.

SCE is hoping the games will replicate the kind of attention-grabbing titles that helped it steadily expand sales in the past.

On Monday, a new title of "Metal Gear Solid" by Konami Digital Entertainment Inc. was unveiled, drawing storms of applause as segments of the game were projected on a big screen.

SCE also presented a preview of a streaming game service dubbed PlayStation Now, which will offer games from $2.99, initially only for the PS4, with more than 100 titles when it is launched in North America on July 31.

SCE is planning to make the service available to other devices including TVs as well as in Japan and Europe.

In April, SCE said PS4 sold 7 million units globally after its initial release in the United States in November, outpacing Microsoft's Xbox One. The U.S. company said in April that Xbox One reached the 5 million milestone in global shipments after the U.S. debut in November.

Sony President and CEO Kazuo Hirai is candid about expressing hopes for how the PS4 could turn around the company's fortunes. "It has the potential of generating a greater profit than PS2, which was the most successful product in terms of earnings," he said.

PlayStation was first released in 1994. The second generation machine, PS2, debuted in 2000 and sold more than 150 million units worldwide. The PS3 hit the market in 2006 and sold more than 80 million units.

While Sony is anticipating a 50 billion yen consolidated net loss in the year through March 2015, a second consecutive loss-making year, it is expecting the game and network service division to swing into black, counting on expanded PS4 sales.

Microsoft, meanwhile, effectively trimmed the retail price of Xbox One on Monday in the United Sates to $399 by offering a version stripped of a peripheral device to match the PS4's price.

Microsoft is planning a competitive pricing at a tax-excluded 39,980 yen when it releases the machine Sept. 4 in Japan, where PS4 has been around since February.

The U.S. company has lined up entertainment titles with a focus on auto racing, battles and adventure series -- genres appealing to gaming fanatics. Takashi Sensui, a Microsoft Japan executive, was bullish about the prospects of Xbox One in Japan, saying, "We would like to sell as many units as possible. We hope Japanese users will have fun."

Although the PS4 has maintained an edge in initial sales, the jury is still out about whether SCE will continue to attract gamers away from the Microsoft machine and provide a blessing to its struggling parent.



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Source: Japan Economic Newswire


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