Sony bets more than video game unit on PS3 success

With the launch of its PlayStation 3 video game console six months away, Sony is gearing up for an all-out battle to put the electronics and entertainment conglomerate back on a growth path. At stake is not just pole position in the $25 billion video game industry, but dominance in the next generation of DVDs, the commercial viability of Sony’s Cell microchips and possibly control over living-room electronics around the world.

Sony’s new console, equipped with a Blu-ray next-generation disc drive and powered by the Cell microchip, is slated for early November release, setting the stage for a three-way showdown with Microsoft Corp.’s already-released Xbox 360 and Nintendo Co. Ltd.’s upcoming Wii.

Toshiba launched the world’s first next-generation optical disc players in March, but Sony hopes PlayStation 3 sales will turn the tide in Blu-ray’s favor. Sony also counts on robust sales of PlayStation 3 for boosting output and reduce production cost of Cell microchips, co-developed with Toshiba and International Business Machines Corp. to drive advanced digital electronics.

Reuters