Sony Playstation Stumbles Out Of The Gate?

Stocks: (SNE)(MSFT)

According to American Research Technoloogy, Sony is already behind the eight ball on intitial US sales of its PlayStation 3.  Sony was anticipated to ship 400,000 units on the first day the game platform was available.American Research says that number is close to 125,000 to 175,000. The research firm also says that this may put in question of whether Sony can hit its goal of shipping 2 million Playstations worldwide by the end of 2006.

Sony’s near term future and the leadership of Howard Stinger, Sony’s CEO, rest with Playstation. PC battery recalls and losses in the company’s game operations brought the company’s net down 92% in the last reported quarter.The company recently announced that is found defects in its popular digital cameras. Sony’s stock has fallen from over $52 to $39 over the last six months.

The fact that PlayStations sales may not be up to forecast is a blow that Sony can ill-afford. Playstation sales in Europe will be delayed until March. And, Sony is projected to lose $300 on each unit.

Sony is not in real trouble, and if Playstation US sales are well below forecast for the holidays, the company’s board has a tough decision to make. Should Stringer be replaced with a senior Japanese executive? That could be popular in the company’s home market, but solves few problems over the near-term. Or, should Sony break itself into several pieces and sell of some divisions like Playstation? There may be interest across the Pacifit in Redmond. That woul leave Sony with its studio, which also might be sold, and its consumer electronics and finance divisions. And, those might prosper if they were on their own.

Perhaps Sony should be a smaller, by more successful company.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.