Sony’s New PlayStation Console to Hit Stores by Holidays

Sony Corp. (6758) will start selling the PlayStation 4 in North America on Nov. 15, moving to obtain an early advantage in the largest video-game market against Microsoft Corp.

The $399 player, Sony’s first new console in seven years, will be available in Europe on Nov. 29 and in 32 countries for the Christmas holiday season, Sony Computer Entertainment Chief Executive Officer Andrew House said yesterday in Cologne, Germany, ahead of the annual Gamescom, Europe’s biggest game conference. Orders already top 1 million, he said.

Sony’s plans put the PlayStation 4 in more than double the markets of Microsoft’s $499 Xbox One as the two companies begin a multiyear battle for dominance. Microsoft (MSFT), which initially targeted 21 countries for its debut, last week cut the number to 13 to ensure larger markets have sufficient supplies.

“Sony’s pricing is aggressive,” said Koki Shiraishi, a Tokyo-based analyst at SMBC Nikko Securities. “Sony has a better chance against its rival because it’s setting the console price lower.”

Sony gained 0.5 percent to 1,937 yen in Tokyo trading today and has doubled so far this year.

Smartphone Games

The new consoles from Sony and Microsoft enter a marketplace that has shifted since the last influx toward mobile games played on tablets and smartphones like Apple Inc. (AAPL)’s iPhone. Console makers are betting faster machines with new features, from motion capture to immersive graphics, will entice consumers to spend on hardware as well as games.

The introduction of new consoles is likely to spark consumer appetite and set the video-game market up for a new growth cycle, according to a note from Richard Beaudoux, a Paris-based analyst at Natixis Securities.

“Sony’s set is cheaper than Xbox, so it will be easier to purchase,” said Junya Ayada, an analyst at Daiwa Securities Co. in Tokyo. “The PS4 is said to have gathered over 1 million pre-orders, but the key question is how much will it sell after the launch.”

Sony will discuss its Japan release plans at a Sept. 9 press conference.

The company unveiled the PlayStation 4 in June at E3, the Electronic Entertainment Expo. To counter the mobile threat, Tokyo-based Sony is tying the console to its Vita handheld player. Executives yesterday showed off games for 90 minutes to highlight the robust lineup of available titles, demonstrated how users will be able to use Wi-Fi within the home to play games streamed from the PlayStation 4 and announced a price cut for the Vita.

Price Cut

The Vita’s price was lowered to $199 from $250, Jim Ryan, CEO of Sony Computer Entertainment Europe, said at the event. In Europe, the new price is 199 euros ($267).

Ryan also said the company has forged partnerships in Europe with Deutsche Telekom AG (DTE), Orange SA (ORA), Virgin Media and Ono to sell fast Internet service with graphics power tailored for video-game players.

House also took a dig at Microsoft, which faced a customer backlash over policies that would have restricted the ability to buy, sell and trade used games for the Xbox One, as well as requiring a connection to the Internet.

The Xbox One also may be played without using the Kinect motion-sensing controller, which allows for voice commands, and can identify users. The device is included in the sale price and initially was going to be required to turn on the console.

Message ‘Shifted’

“While others have shifted their message and changed their story, we were consistent in maintaining policies that were fair and in tune with consumer desires,” House said.

Microsoft unveiled its Xbox One console in May. The company hasn’t specified a release date.

Sony probably won’t gain a strong advantage over Microsoft because the Xbox One is likely to go on sale in all of its announced territories Nov. 22, said Michael Pachter, an analyst with Wedbush Morgan Securities in Los Angeles. That means the PlayStation 4 will only be available in the U.S., the largest market, for one week ahead of its rival, and be behind it elsewhere.

Nintendo Co. began selling its most recent console, the Wii U, in November. It sold 160,000 units of the player in the three months ended in June, pushing the total to 3.6 million since its debut in November. In April, the company forecast sales of 9 million in the year ending next March.

Gamescom, due to host more than 275,000 attendees this year according to its organizers, runs from Aug. 21 to Aug. 25.

To contact the reporters on this story: Grace Huang in Tokyo at xhuang66@bloomberg.net; Marie Mawad in Cologne at mmawad1@bloomberg.net; Cliff Edwards in San Francisco at cedwards28@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net; Anthony Palazzo at apalazzo@bloomberg.net; Kenneth Wong at kwong11@bloomberg.net

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