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Games publishers stuffed up by PS3 delays

Panic on the streets
Thu Mar 09 2006, 14:47
ANALYSTS ARE predicting that big games publishing houses are going to get a good kicking in the long-term financials due to the PlayStation 3 delays.

The current ETA for the PS3 is sometime before Christmas and Susquehanna Financial Group analysts Jason Kraft and Chris Kwak have told that this will be a serious long term threat to games publishers.

This is not for obvious reasons. Kraft and Kwak say that the publishers will regenerate the revenue they lose to a PS3 delay. But what will be more permanent are the price cuts they are going to need when the machines do hit the shops.

It is possible that games players will be more apathetic by the time the PS3 arrives and will have switched alliance to the Xbox360. This will mean that all the cash that the publishing houses have spent on developing the next-generation PS3s is less likely to be returned.

One way around this will be to cut the cost of software to draw punters back. In fact, EA is doing this with the current-gen versions of The Godfather, Black and Fight Night Round 3.

But such drastic measures may cost the publishers more than 35 percent of their revenue, Kraft and Kwak warn, here. µ


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