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Sony pins hopes on gaming unit to shore up profits

by Keiichiro Otsuka

Kyodo

Sony Computer Entertainment Inc.’s release of a plethora of software titles in the coming month for the PlayStation 4 will be followed closely by its financially struggling parent company.

As the 2014 Electronics Entertainment Expo, or E3, opened Tuesday, Sony Corp. is betting that the lineup for the successful PS4 will help shore up the division’s bottom line, which has been battered by its money-losing Vaio PC business.

But the electronics maker is likely to face a tough challenge in the game business from U.S. giant Microsoft Corp., which is targeting the same consumer segment with its Xbox One machine.

“We will provide gamers the best place to play,” said SCE President and Group CEO Andrew House, expressing confidence in the upcoming game titles unveiled at a press event Monday ahead of E3′s general opening.

SCE is hoping the games will replicate the kind of attention-grabbing titles that helped it steadily expand sales in the past.

On Monday, a new chapter in Konami’s “Metal Gear Solid” series was unveiled, drawing storms of applause as segments of the game were projected on a big screen.

SCE also presented a preview of a streaming game service dubbed PlayStation Now, which will offer more than 100 titles, starting at $2.99, when it is launched for the PS4 in North America on July 31.

SCE is planning to make the service available to other devices, including TVs, as well as to consumers in Japan and Europe.

In April, SCE said it sold 7 million PS4s globally after its initial release in the United States in November, outpacing Microsoft’s offering. The U.S. company said in April the Xbox One reached the 5 million milestone in global shipments after the U.S. debut in November.

Sony President and CEO Kazuo Hirai is candid about how much the company is counting on the PS4.

“It has the potential of generating a greater profit than the PS2, which was the most successful product in terms of earnings,” he said.

The first PlayStation was released in 1994. The second-generation PS2 debuted in 2000 and sold more than 150 million units worldwide. The PS3 hit the market in 2006 and sold more than 80 million units.

While Sony is anticipating a ¥50 billion consolidated net loss in the year through March 2015, which would be its second year in a row in the red, it is expecting the game and network service division to turn a profit.

Microsoft, meanwhile, started offering a stripped-down version of the Xbox for $399 on Monday in the U.S., matching the PS4′s price.

Microsoft is planning to sell the machine for ¥39,980 before tax when it comes out Sept. 4 in Japan.