SharkJumping

As I predicted on March 23 in this post, Sony announced this week that they were cutting their 2006 PS3 sales and production numbers, thus pummeling their stock (see IHT article here).  In addition, they will now not launch the PS3 in Europe until Q2 2007 rather than attempting to carry out a simultaneous global release as they had previously stated.  Sony is holding to its 6M projection by end of Q1 2007, but it's hard to see why that's a credible statement at this point.

None of this is a surprise - there is simply no way to design and manufacture a system this complex in the time frames they were discussing.  This is especially true when Sony is in the midst of a massive laptop battery recall, which makes the emphasis on quality even more important.  Given that Microsoft is increasing its XBox 360 sales projections, and that Nintendo remains firmly committed to its November launch date in volume, the situation at Sony is getting increasingly difficult.  As one can see from the PSP, Sony can still make gorgeous hardware, but the higher price, lack of quality software and the inability to create a compelling online experience is hurting sales vs the Nintendo DS - it looks like PS3 might be heading down the same path.