Sony set to make a pre-emptive strike at Microsoft with PS4

One man looks at Sony Corp products at an electronics store in Tokyo December 25, 2012.

Credit: Reuters/Yuriko Nakao

By Tim Kelly and Elizabeth Iverson

TOKYO | Wed Feb 20, 2013 4: 13 am EST

Tokyo (Reuters)-Sony Corp is expected to show off new PlayStation console in Wednesday's pre-emptive strike against Microsoft Corp's bid to make its Xbox world leading hub for home entertainment.

Rare PlayStation event in New York comes amid industry speculation that Microsoft is set to unveil a successor to its Xbox 360, which beats the seven year old PlayStation 3 online network with features such as voice commands in interactive games and superior connectivity for smartphones and tablets.

"Their focus is on creating a beachhead for next-generation consoles, and this is what 20 February is all about," said P.J. McNealy, CEO and founder of digital world research. "The reality is they have been playing catch-up."

Pushing forward the Microsoft Xbox and Nintendo Co Ltd's new Wii U can help revive business hurt Sony Electronics from a deficiency of the hit gadget sales crash TV and convergence of consumer interest about tablets and Smartphones, built by rivals Apple Inc and Samsung Electronics Co., Ltd.

Tablets and Smartphones already represent about 10 percent of the market of $ 80 billion. These mobile devices, analysts predict that within a few years will be as powerful as the current slew of game consoles only.

After six years of Sony's PlayStation sales were just shy of the 67 million Xbox installed base and well behind 100 million Wii sales, analysts said.

Lackluster start in November of a successor to the Wii, Wii U, gives Sony a chance to focus on download Microsoft as all three battle of bringing casual games of tablets and Smartphones. Nintendo cut its target of selling 4 million 5.5 million for the year ending March 31.

TORRENT

Microsoft's response to the threat of casual games is a software that gives users additional content and allows them to surf the Internet from their mobile devices. Xbox already streams Netflix and ESPN and links to tablets and smartphones using the Windows or Apple iOS and Google Inc. on Android. The Sony PS3 online network is funny.

"For Sony, they have to go out and make this event the definitive statement on why PlayStation gamers should adopt or the PlayStation 4 PlayStation Orbis or whatever they end up calling it," said Greg Miller, Executive Editor of PlayStation video game site IGN.com.

Sony's purchase in July of United States cloud based gaming company Gaikai, for $ 380 million hints that the Japanese company will pursue a similar streaming strategy of Microsoft. Sony, industry observers say, may also offer an expanded range of free games to counter the threat of casual games.

Sony, which under its CEO Kazuo Hirai focuses on games, mobile devices and cameras have a hit product. But by betting on PS3 successor, Hirai, whose most profitable business is a life insurance risks deepening electronic consumer losses, since he would have to sell the consoles at below production costs to get a grip on the market.

This choice is made more difficult because the other two pillars of the new Sony's Hirai-cameras and mobile-are a waste of money.

Sony is expected to post a $ 1.4 billion operating profit in the current fiscal year. Though much of this rebound is tipping gains on real estate, including $ 1.1 billion for New York-based.

The PlayStation event in New York begins at 2300 GMT (1800).

($ 1 = 93.5200 Japanese yen)

(Additional reporting by Reiji Murai; editing by Ryan MA)