At Last, PlayStation 3 Outdoes XBox in Unit Sales

Sony Gets More Aggressive to Make Console Stand Out From the Competition

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YORK, Pa. ( -- It's taken nearly two years, but it looks like Sony might be finally turning the corner with its PlayStation 3 video-game console.
According to NPD there are 4.5 million PS3s installed in the U.S.
According to NPD there are 4.5 million PS3s installed in the U.S.

The PS3 beat Microsoft's Xbox 360 in U.S. unit sales for the first time this year in January, and again in February and May, according to NPD Group. The May triumph was its biggest margin -- 209,000 PS3s vs. 360's 187,000 units sold. There are now 4.5 million PS3s installed in the U.S., according to NPD, and more than 12 million worldwide, according to Sony.

Since the beginning of the year, PS3 has been riding a wave of good news, -- including the triumph of its Blu-ray DVD technology, a critical mass of consumers, and a spate of upgraded reviews. But lately Sony itself has gotten more aggressive in helping the system gain traction with new services and features from across its vast electronics and content empire.

What Sony has planned
Just this week Sony said it will add the ability to download movies, beginning in July. That followed reports earlier this month that it will introduce Qore, an interactive online magazine in high definition, and that Sony has brokered its first deal with IGA Worldwide to sell in-game advertising across the PS3 platform.

"What they're trying to do to differentiate from Wii and Xbox requires collaboration across Sony [properties and content]," said Michael Cai, an analyst with Parks Associates. "That's not easy and it takes time. Maybe finally all the pieces are coming together."

Sony seems more upbeat about the PS3 as well. In his blog, PlayStation top marketing executive Peter Dille echoed -- and endorsed -- media and analyst chatter about 2008 being "the year of PlayStation 3."

Too late?
But could it all be too little, too late for PS3? Nintendo's Wii and Xbox 360 have each sold more than 20 million consoles worldwide vs. Sony's 12 million. Of course, Xbox had a one-year head start, but Wii came out just days after the PS3 and has seen impressive sales since Day 1. Sony has so far reportedly lost more than $3 billion on the PS3, though the company this week projected it will be profitable by the end of its fiscal year in March 2009.

"No, it's not too late," said NPD analyst Anita Frazier in an e-mail interview. "All three console manufacturers need to make sure they continue to bring on great content for their platform. ...No one has lost the battle, nor has anyone won the battle. There is plenty of life in this cycle yet to conquer."

And while analysts agree that great games and content are the key to console success, the incremental revenues from movie downloads and in-game advertising being added by Sony can offset costs and are becoming more important across the whole industry.

Advertisers happy
Justin Townsend, CEO of IGA, PS3's first in-game ad partner, has good reason to be optimistic. "Since we announced the deal, the phones have been ringing off the hook," he said. "Advertisers are very happy they can finally put ads across all three platforms."

He believes that the potential of the PS3 as not just a video-game console, but as an entertainment platform, has only begun. "Sony's going to be a force to be reckoned with," Mr. Townsend said. "I think all the pieces they're amassing now will become a cohesive digital strategy for marketing and advertising."

Perhaps odd considering its rising sales, there hasn't been a great deal of marketing behind PS3 of late. The brand's agency is Deutsch, Los Angeles, hired late last year after Sony dumped longtime PlayStation shop TBWA.
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