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Could PS3 Complexity Spell Production Problems?

“We've learned the Sony Playstation 3 is not just a game console. It’s a movie platform. It’s also a super-computer," McNealy said, referring to Sony Computer Entertainment president Ken Kutaragi's recent revelations. "This is now the most complex box that’s ever been built in this industry. It’s going to have a Cell processor, it’s going to have a Blu-ray drive. The number of pieces that are going into this box are even more astounding [than the over 1700 parts used in the Xbox 360]."

He continued, "While Sony has certain manufacturing advantages at the end of the day, this is a very complex process, and they’re going to be limited to the yields that they can come up with."

Typically, getting such a complex piece of hardware off the ground always presents difficulties. We don't have to think too far back to recall manufacturing-related shortages of the Xbox 360.

McNealy said that he expects the PS3 ramp-up to hit its stride sometime in 2007. At that point, he said, "the wild-card becomes, [whether or not] people still want to spend six-hundred bucks on the box."

Sony has maintained a PS3 shipment target of 1 million units per month, with a total of 6 million shipped by the end of March 2007. The company intends to have two million units ready for the console's worldwide November launch.

“Sony, we don’t think, is going to be in assembly for another four to six weeks--end of July, early August." McNealy went on to compare the PS3 manufacturing process to the Wii's, saying, "From a manufacturing standpoint, the Wii is a simpler box to make. Architecturally there’s fewer parts. It’s just easier to make.”

McNealy also commented on original Xbox software sales. "We expect the old Xbox software sales to, by and large, go off a cliff this holiday. There’s very little support for them in retail right now. The hardware ramp has slowed down, and there’s no cut to ninety-nine bucks at the end of the product cycle.”

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