Sony Stock Drops 3.6 Percent
Monday, February 20th 2006, 10:12 am
By: News On 6
TOKYO (AP) _ Sony shares dropped sharply Monday in Tokyo after an analyst report rekindled concerns the company may delay the sales of its new video game console, although the company denied any change in plans.
The worries stemmed from a Merrill Lynch report late last week highlighting market rumors about a delay in the sales start for the PlayStation 3 video game console, which the Japanese entertainment and electronics manufacturer has promised for spring 2006.
Masami Nakamura, spokeswoman for Sony Computer Entertainment, Sony's game unit, denied changes in the sales date, although the company is not giving date on the launch.
Sony Corp. shares fell 3.64 percent to 5,300 yen (US$45; euro37.60) as the report fanned fears about a possible delay. The overall Tokyo market also dropped, with the Nikkei 225 index falling 1.75 percent to 15,437.93 points.
A delay could undermine Sony's position as it faces intensifying competition from Microsoft Corp., whose Xbox 360 game console has already hit the global market.
Sony dominates home game consoles, especially in Japan and Europe, having sold PlayStation 2 machines 101.4 million worldwide.
Recent game machines are so sophisticated, and competition in the market so intense, that fears about possible delays are relatively common whenever a dramatically upgraded machine, such as the PlayStation 3, is expected to go on sale.
Sony has been struggling to turn around its business under the leadership of Howard Stringer, the first foreigner to head the Tokyo-based company. The game unit is one of the major businesses that Sony is focusing on in its revival effort.
The ``cell'' computer chip that will drive the PlayStation 3 will be a key component in Sony's other planned digital gadgets designed to deliver dazzling video and online entertainment to living rooms.
Last week, a senior executive said the exact date for the sale was still undecided.
``We want to be completely prepared when we bring PlayStation 3 to the marketplace,'' Tetsuhiko Yasuda, managing director of Sony Computer Entertainment Asia, told reporters at the Taipei Game Show.
``Our No. 1 competition is not other companies but counterfeiters. We want to work with governments to stop this,'' Yasuda said without elaborating.