Ken Kutaragi, president and CEO of Sony Computer Entertainment, revealed to Reuters today that the announcement made by his company about the impending shortfall of available PS3s has hurt Sony. Last week, Sony revealed that there would only be 500,000 units for launch instead of the 2 million-unit target number they were aiming for. In addition, Sony stated that the PS3 launch for Europe would be pushed back until 2007. The production cutbacks were due to the shortage of Blu-ray laser diodes necessary to assemble the PS3s onboard Blu-ray DVD player.
Kutaragi said candidly, "If you asked me if Sony’s strength in hardware was in decline, right now I guess I would have to say that might be true.”
Sony has always maintained that concerns over PS3 production problems were either nothing to worry about, or were properly being addressed. Katargari,s admission is remarkable in that it is one of the first admissions by the top brass at Sony regarding hardware issues with the PS3.
The missed production quotas have industry analysts somewhat shaken in regards to their confidence in Sony. Mitushige Akino, chief fund manager at Ichiyoshi Investments observed, "All of this has raised concerns about whether there is something fundamentally wrong with Sony’s manufacturing process, and it could further damage the Sony brand.”
