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Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times reporter Sharon Chan.

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December 29, 2008 10:45 AM

Sony's PS3 seen losing ground this holiday; Nintendo boosting Wii video

Posted by Benjamin J. Romano

The Wall Street Journal's report today on the woes in Sony's gaming business is likely bringing smiles to faces in Redmond, where rivals Microsoft and Nintendo of America are based.

The article points to the Sony PlayStation 3's U.S. sales decline in November and lower expectations for December sales:

"Analysts say they expect PS3 sales for this month to be flat or lower than last year, while sales for its rivals are likely to rise. And Sony may not reach its goal of selling 10 million PS3 consoles in the fiscal year through March, analysts say.

"The sales decline is a heavy blow to Sony, which was banking on the videogame division to provide a bright spot as its core electronics business is hit by the global economic downturn."

We'll get a picture of how the consoles fared in their third head-to-head Christmas in about two weeks when The NPD Group reports U.S. game sales for December, but even if the report brings good news for Sony, the PS3 faces a bigger problem, as the Journal reports:

"Sony's strategy of selling a pricey game machine with advanced features and cutting-edge components appears to be backfiring as a deepening recession has U.S. consumers more price sensitive than ever.

"If Sony doesn't close the gap with its rivals, it could risk making the PS3 an afterthought to game publishers, who focus most of their resources on the machines with the most users."

Might Sir Howard Stringer, Sony's chief executive, address the company's games division during his speech at the International Consumer Electronics Show on Jan. 8? If he does, you'll read about it here.

Meanwhile, Nintendo is making moves to add more video content to its market-leading Wii console. Reuters reported last week that the company is partnering with a Japanese ad agency to create a video distribution service for the Wii.

The ad agency, Dentsu, and Nintendo aim to begin the new service in Japan in 2009, but timing for other markets has not been set, according to a Dentsu spokesman quoted by Reuters.

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