Playstation 3 Launch Up to a Year Away?

Sony says it is still launching the Playstation 3 this spring in the first part of 2006, but Merrill Lynch has thrown some cold water on the fire.

Analyst Hitoshi Kuriyama of Merrill Lynch in Japan has reported that launch of the PS3 could be delayed by six to twelve months, according to the Financial Times. Such a delay would mean the gaming platform wouldn’t appear in Japan until the latter half of 2006, and wouldn’t launch in the U.S. until 2007.

The main reasons for a delay would appear to be high production costs and unfinished technical specifications.

Merrill Lynch analysts in San Francisco have estimated the materials and manufacturing costs of the PS3 could approach $900 per unit (including $230 for the Cell processor and $350 for the Blu-Ray drive), falling to $320 per unit three years after launch. The cost-per-unit implications for the Playstation are irksome: in order to compete with Microsoft’s pricing on the Xbox 360, Sony would either have to drastically discount the sale price to match the roughly $400 retail price of Xbox 360 systems, and/or limit the number of Playstation 3 consoles released to market to two to three million to limit up-front losses while the consoles are at their most expensive to produce. Manufacturers