PS3 shortage of stock or demand?

Stan Beer
Thursday, 01 March 2007 09:09

Opinion and Analysis

A Reuters interview with Sony Computer Entertainment America chief executive Jack Tretton, revealed that the company expects shortages of its latest generation console PlayStation 3 to be over by May 2007. The question is, however, is there really still a supply shortage of PS3 consoles or just a shortage of demand.

According to US retail figures for January, the PS3 was only the fourth best console seller, behind Xbox 360, PS2 and front-runner Nintendo Wii, which had its own supply problems. Back then, Sony could use the valid excuse that there was a very real shortage of consoles due to its Blu-ray diode manufacturing problems.

However, as March begins anecdotal evidence begins to filter in about stacks of unsold PS3 sitting on store shelves across the US. While Tretton in his interview attempted to present that as a good sign that the supply problem is beginning to be solved, the issue remains as to whether the consumer interest in PS3 matches the pre-release expectations of Sony.

The two major issues of high price and lack of exclusive games that take advantage of the extraordinary graphics capabilities of PS3 remain. Eventually both will be solved as more PS3 games get delivered and the inevitable console price cuts are announced.

In the meantime, however, Sony which appears to be gaining the upper hand in the high definition video wars, may well have dealt its own PS3 a blow in its quest to press home the advantage with Blu-ray.

Until a couple of days ago, the only way to get a reasonably priced Blu-ray player was to buy the heavily subsidised PS3. Now Sony has slashed the price of its own standalone Blu-ray player to US$599 - the same price as the 60GB PS3.

Thus, high definition video enthusiasts who may have no interest in games now have a choice - they can either buy a bulky PS3 with all the stuff they don't want or need or a sleeker dedicated Blu-ray player for the same price. No doubt some non-gamers will still opt to buy the PS3 just because it offers extra features even if they don't use them. However, others who may well have bought a PS3 will now buy just a Blu-ray player.

Meanwhile, February's consoles sales figures should tell an interesting story, as will each month of 2007 as the year unfolds. At present, the PS2 still outsells PS3. At the end of May, the market will hold Sony and its US boss to their word and the company will no longer be able to use supply issues as an excuse for poor PS3 sales.