Justin Lee On February 20, 2006 at 9:29 am

The Playstation 3 might be the most powerful console when it comes out, but it appears to the most pricey! Estimated at $900, this may cause a delay in release while Sony finds ways to lower the price.

Sony has been promising a spring launch but has been deliberately vague about exactly when that would be. Analysts have said it could mean anytime between March and the end of Japan’s rainy season in June.

Sony’s shares fell as much as 4.4 percent on Monday after Merrill Lynch said in a research note last week that the PS3’s launch might be delayed by six to 12 months and the cost of production could initially approach $900 per unit.

The shares closed down 3.6 percent at 5,300 yen, underperforming the Tokyo stock market’s electrical machinery index IELEC, which fell 1.85 percent.

Manufacturers typically sell new game consoles at a loss initially to gain market share so they can later make money by selling software — a $25 billion global market.

But the higher-than-expected cost estimate by Merrill means Sony will have to take a much larger loss on each PS3 unit it sells or sacrifice market share to Microsoft, which is selling its Xbox 360 for about $400.

Read the rest on MSNBC.

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