LOS ANGELES (Reuters) - Sony Corp. on Tuesday said it would beat Microsoft Corp. in the battle of the next generation of video game machines with advanced technology that would outweigh its rival's early start with its Xbox 360.
Sony (6758.T: Quote, Profile, Research) took the wraps off its PlayStation 3 game console on Monday and wasted no time in promoting the advantages of its new microchip, high-resolution graphics and next-generation DVD player.
"We want to pack everything in today and future-proof this as much as possible," said Kazuo Hirai, the head of Sony's U.S. game unit, in an interview.
"It's a box made of future technology as opposed to Xbox 1.5, which seems to be a combination of things available today," added Hirai, president and CEO of Sony Computer Entertainment America.
The PS3 will debut in 2006 while the Microsoft (MSFT.O: Quote, Profile, Research) Xbox 360 will be out in time for the holidays this year.
The U.S. software giant said the Xbox does rely heavily on existing hardware technology, but Microsoft's software expertise will make it easier for developers to create games and keep costs under control.
During the next 18 months, Microsoft, Sony and Nintendo Co. Ltd. (7974.OS: Quote, Profile, Research) all plan to launch sequels to their current consoles, promising better graphics and on-line game play.
Hirai said being first is not necessarily a recipe for success.
"First to market doesn't necessarily guarantee anything in this market. Because if your only objective is to be first to market, you are missing the forest for the trees," said Hirai.
Still, analysts said it seemed unlikely Sony will be able to replicate its dominant position in this upcoming generation of game consoles. PlayStation 2 has outsold Xbox by nearly 4-to-1 since their respective launches.
"It's unrealistic for one company to dominate the market like Sony did last time," said KBC Securities analyst Hiroshi Kamide, who noted that big game publishers like Electronic Arts Inc. (ERTS.O: Quote, Profile, Research) and Square Enix (9684.T: Quote, Profile, Research) are more willing to work with Microsoft this time around.
Sony's Hirai signaled that the PS3 may cost more than the PS2, which launched at $299 in the United States in 2000.
The PS3 will have a Blu-Ray next-generation DVD player. A Blu-Ray recorder now sells for as much as $2,800 in Japan, but the recorders are not being mass produced yet, and the PS3 will include only a player.
Analysts have said that $399 is the maximum most consumers would pay.
"Given the technology that we are packing into the box, as a general thought, I think consumers would be willing to consider a higher price than a previous generation product," said Hirai, who emphasized that nothing had been determined.
Sony would not speculate about the possible impact that talks between Sony and Toshiba -- heading rival groups -- to unify next-generation DVD formats could have in trying to meet its spring 2006 launch date target.
However, Hirai did say Sony's handheld PlayStation Portable (PSP) would work with the PS3.
A gamer could use the PSP to play games on the PS3 using a wireless Internet link. Thus a gamer in a coffee shop with a PSP and wireless Web could conceivably play games on his or her PS3.
"Given that kind of technology power, I think the content creators can come up with some real cool and creative ways to take advantage of that," said Hirai.