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Sony monitoring PlayStation ‘issues’ as sales top 1 million in product debut

By Grace Huang
Bloomberg News

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Sony Corp. sold more than 1 million PlayStation 4 consoles in North America during the first 24 hours of sales, though the company said some buyers reported having “issues” with the new gaming device.

The record sales, which top initial results for the predecessor PlayStation 3 in 2006, come as Chief Executive Officer Kazuo Hirai tries to make the video game console the centerpiece of a corporate turnaround strategy.

Pressure has intensified on Hirai after the company last month surprised investors by reporting an unexpected second-quarter financial loss.

Sony is getting a head start on competing for the attention of game players with Microsoft Corp., which is releasing its Xbox One later this week.

The Tokyo-based electronics maker has priced its console at $399, or $100 less than the Microsoft machine, as it seeks an edge in the $93 billion-a-year industry before the Christmas shopping season.

“PS4 sales are better than expected,” Koki Shiraishi, an analyst at SMBC Nikko Securities Inc. in Tokyo, said. “More importantly, I am watching the penetration into the market one month after its release.”

Sony is aware that some consumers have reported issues with their PS4 systems and is closely monitoring for additional reports, said Satoshi Fukuoka, a Tokyo-based spokesman.

“We think these are isolated incidents and represent a very small percentage of total units shipped to consumers to date,” Fukuoka said, declining to elaborate on what the problems were. The company is still making and shipping the consoles, he said.

Nintendo Co. also faced criticism last year after its new Wii U console required an immediate update out of the box, and some consumers complained their machine was damaged during the process.

Sony will have adequate supplies of the PS4 through Christmas and stands by earlier projections for sales of 5 million units by March, said Jack Tretton, president and chief executive officer of the company’s U.S. computer entertainment division, on Nov. 11.

Sales between 500,000 and 1 million units would signal a “strong launch,” said Shunsuke Tsuchiya, a Tokyo-based analyst at Credit Suisse, in a note Thursday, the day before the PS4 went on sale.

Sony is employing a newer, faster type of memory that could provide an edge with graphics and help win over hardcore game players. The company also will benefit from efforts to woo independent developers, said Andrew House, head of Sony’s worldwide game operation.

Both Sony and Microsoft are responding to shifts in the video game industry, especially the loss of players to tablets and mobile phones. To spur sales, Sony and Microsoft are offering powerful Web-connected consoles capable of delivering games and entertainment, such as TV, films and music.

Sony’s previous version of the console, the PS3, sold 197,000 consoles in the first month after it was released in the U.S. on Nov. 17, 2006, according to a report at that time by NPD Group, which tracked sales of video games and consoles.


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