If a high price isn't bad enough...
Sony's PS3 May Launch With Fewer, Less-Powerful Game Titles
May 16 (Bloomberg) -- Sony Corp.'s PlayStation 3 introduction in November may be hampered by fewer and less-powerful games because the company hasn't given final technical details of the new console, according to video-game publishers.
THQ Inc. decided it didn't have enough information to make a version of ``The Sopranos'' for PS 3, according to Chief Executive Officer Brian Farrell. Other developers will release a first batch of games that don't use all the power of Sony's new Cell processor, Sega of America President Simon Jeffrey said.
Sony's delay in providing details and access to the new chip shortens the time that game-makers have to perfect titles before the PS3 hits store shelves. Some games will be delayed, while others won't have features that take full advantage of the machine's power. With fewer titles ready, video-game companies may make less sales during the Christmas holiday season.
``A lot of developers have not gotten the kits,'' Jeffrey said in an interview last week at the Electronic Entertainment Expo in Los Angeles. ``There certainly will not be a lot of titles available.''
Sony, the world's biggest maker of video-game players, demonstrated the PlayStation 3 for the first time last week and said the console will go on sale in North America on Nov. 17. Versions with a 20-gigabyte hard drive will sell for $499. Machines with a 60-gigabyte drive will cost $599.
PS3 will launch with as many as 15 titles, Kazuo Hirai, chief executive officer of Sony Computer Entertainment, said in an interview last week. Sony is starting to give video-game companies the final prototypes and software, allowing for plenty of time to prepare games for PS3's debut, Hirai said.
``I don't think there will be too much of an issue,'' he said.
Games' Impact
Popular games for the PlayStation 2 helped Sony beat back a challenge from Redmond, Washington-based Microsoft Corp.'s first Xbox in the last round of console wars. A lack of titles limited sales of the original Xbox until ``Halo'' came out. This time, Microsoft will have a one-year head start with its Xbox 360 by the time PS3 arrives. Xbox 360 had 18 games on the day of its launch in November 2005.
``With ongoing strong games sales, we believe the Xbox segment could become profitable in calendar 2007,'' wrote Goldman, Sachs & Co. analyst Rick Sherlund in a research note yesterday. Microsoft, the world's biggest software maker, may cut the price of Xbox 360, which sells for as much as $399, by $100 in the next year to press its advantage, Sherlund wrote.
Some publishers are unwilling to risk the high cost of developing for the new console until they know more about its capabilities, said Mike Hickey, a video-games analyst for Janco Partners in Greenwood Village, Colorado.
Development Costs
``Developing for Sony's platform is incrementally more complex than what you're looking at for Microsoft or Nintendo,'' Hickey said. ``With costs that could go over $25 million a game, you're not seeing third-party content where it needs to be at this stage to have a successful launch.''
Shares of Tokyo-based Sony fell 90 yen to 5,240 yen in Tokyo yesterday and have gained 8.7 percent this year.
Developers need the design information to decide what new features they can put into games. The development kits give publishers a working version of the machine with similar processors, hard drives and other components. They are updated until Sony settles on a final version.
A particular concern, Jeffrey said, is that developers haven't been given Sony's new Cell processor for evaluation.
The chip will make the console about 35 times faster than the PlayStation 2 and will render details such as how a light reflects in a character's eye, or strands of hair moving after a gust of wind. PlayStation 3 also includes a high-density disk with about 10 times the storage capacity of a DVD.
`Too Risky'
THQ is releasing versions of ``The Sopranos,'' based on the HBO television series, for PS2 and for Xbox 360, Farrell, 52, said. Calabasas Hills, California-based THQ balked at developing the game for PS3 until more information becomes available, he said.
``It was too risky to do it,'' Farrell said in an interview. ``It made no sense.''
Not everyone is complaining. Robert Kotick, chief executive officer of Santa Monica, California-based Activision Inc., the second-largest U.S. video-game developer, said his company hasn't had problems developing with the kits Sony provided.
``While we may not have the final, final hardware, we know what the processor's capacity is,'' Kotick, 43, said in an interview. ``We have active development under way.''
Bigger rival Electronic Arts Inc., No. 1 in the U.S., hasn't had problems creating PS3 titles either, President Paul Lee said.
``We're happy with the development kits,'' he said.
Late Kits
Microsoft also was late getting the final Xbox 360 kits to developers, UbiSoft Entertainment SA Chief Executive Officer Yves Guillemot said in an interview. He said Montreuil-Sous-Bois, France-based UbiSoft, Europe's second-largest maker of video games, is proceeding with development for PS3.
``We won't be able to take advantage of all the components of the machine, but it was the same last year,'' Guillemot said. ``It's a challenge for the publishers.''
Sony, the second-largest maker of consumer electronics, had 64 percent of the market for the previous generation of consoles, Merrill Lynch & Co.'s Kash Rangan said in a May 2 note. Microsoft garnered 16 percent and Nintendo Co. had 13 percent. Kyoto-based Nintendo, maker of the GameCube, will begin selling its new Wii console in the fourth quarter.
It's easier for larger game publishers to develop titles for the new console because they can assign more people to study the prototypes and figure out how to use the capacity, said Jeff Brown, spokesman for Redwood City, California-based Electronic Arts. Electronic Arts has more than 5,000 employees at its development studios. Tokyo-based Sega has about 50.
First-generation games offered for the new PlayStation won't use more than 20 percent of the Cell chip's capabilities, Kotick said. That's typical for a new platform because developers need several years to learn how to use the technology, he said.
``This is the most sophisticated piece of consumer hardware ever,'' he said.
