US stock-brokerage firm Merrill Lynch has published a report predicting the launch of the PlayStation 3 could be delayed by 6 to 12 months from its current 2006 window, resulting in a September/October launch in Japan and a late 2006 or early 2007 launch in the US.
The report sent Sony stocks in Japan and Wall Street sinking this week, falling by 3.6 percent and 2.8 percent respectively.
"We wrote last November that Sony's design choices for the PS3 had resulted in an expensive and difficult-to-manufacture product," read the report, "and we think that we're seeing the consequences of those choices play out now. In particular, we think the problem points are the Sony Cell processor and the Blu-ray drive." Merrill Lynch also cited heat-generation issues with PS3 hardware and the far-from-finished state of most games for the platform as factors.
The fires of unease were fuelled further by another component of the report, which predicted the manufacturing cost of the console could be much higher than previous estimates of around US$500 per unit.
"Our updated analysis indicates that the initial bill of [production] materials for PS3 could approach US$900," read the report. The report said that the production cost of a single Cell processor will be US$230 at launch, with the Blu-ray drive setting Sony back US$350 per unit. If that estimate is correct, that means the PS3 would have to sell for around US$775-US$800 to maintain a US$125-US$100 per-unit-loss similar to that of Microsoft's Xbox 360.
Merrill Lynch expects PS3 production costs will start falling after 2007, when Sony can shift the Cell chip's manufacture from the complex 90nm process to the more cost-effective 65mn process. Scaling Blu-ray to other devices will also bring down the drive's price. Merrill Lynch predicts that the PS3's production cost will fall to US$320 in the three years after its launch, by which time the Cell will only cost US$60 per unit and the Blu-ray drive US$100 per unit.
In Japan, Sony Computer Entertainment spokesman Kei Sakaguchi flatly denied that there would be any delay to Bloomberg News and other press outlets, saying, "there isn't any change in our plan to release the console in spring 2006".
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