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Beleaguered Sony Counting on New Game Machine

Beleaguered Sony Counting on New Game Machine
February 24, 2014 9:25AM

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The PS4's much awaited arrival in Sony's home market is the first time Japan did not get a major Sony game machine ahead of other markets. With much riding on the PS4's success, the commercial advantages of targeting overseas markets outweighed the sentimental pull of a home town launch. Analysts say Japan wasn't a priority.

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PlayStation stands out among the long list of famous Sony brands as one that hasn't faded or succumbed to a nimbler competitor. Months after hitting global markets, the latest version of the video-game console is going on sale at midnight in Tokyo, a big shift from times when Sony was ascendant enough to launch flagship products in Japan first.

The PlayStation 4's much awaited arrival in Sony Corp.'s home market is the first time Japan did not get a major Sony game machine ahead of other markets. With much riding on the PS4's success, the commercial advantages of targeting overseas markets outweighed the sentimental pull of a home town launch.

The PS4, Sony's first video-game console in seven years, went on sale in the U.S. and Europe in November. Still, a big crowd of Japanese game fans are expected at the countdown ceremony in Tokyo's fashionable Ginza district.

Sony officials say more time was needed to prepare game software attractive for Japanese, but analysts say Japan wasn't a priority for Sony's game division.

The PS4 has proved a hit so far, selling 4.2 million units last year, outpacing rival Microsoft Corp.'s Xbox One at 3 million.

But analysts say Sony, headed to a 110 billion yen ($1.08 billion) loss for the fiscal year ending March, needs more than a successful game console to reverse its dimming fortunes.

The company rose from humble beginnings in 1946, with just 20 employees, to become one of the first Japanese companies to go global as the country emerged from the debris of its defeat in World War II to become a manufacturing powerhouse.

But in recent years, out of Sony's long list of well-known brands -- Walkman, Vaio, Bravia, Cyber-shot, Handycam, Aibo -- only PlayStation has managed to hold its edge. Its share price is today just one third of its 2008 value.

The Walkman portable audio player lost out to the iPod from Apple Inc. over the last decade, as it fell behind in adopting the MP3 format.

Sony's Bravia TV section, despite boasting the company's top notch image technology, has not made money for 10 years straight, despite repeated promises from executives to make it profitable. The Aibo robot dog was scrapped in 2006, under a massive turnaround program, despite an uproar from fans.

Earlier this month, Sony announced it was selling its Vaio personal computer operations in the latest sign of its problems. It is keeping Bravia but making it a subsidiary company. (continued...)

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