PS3 still a major player for Sony

Stringer: Game console 'will be vital to our future'

Despite the numerous and well-documented problems PlayStation 3 has experienced, the console remains a cornerstone of Sony Corp.'s business, chairman Howard Stringer told shareholders here Thursday, adding that new games this year will give it renewed impetus in the market.

"All the production problems have been solved," a confident Stringer told more than 7,000 investors at the company's annual shareholder meeting. "We are making a comeback already. We always lose money on the hardware initially, and we recover that money gradually. We believe that the PS3 is going forward and will be vital to our future."

Meanwhile, the value of Nintendo Co. Ltd.'s shares has continued to rise as demand for the Wii console system and the DS portable game system remains high.

On Wednesday, with Nintendo shares in Tokyo up 1.4% to ¥44,500 ($359.61), the company's market capitalization stood at ¥6.3 trillion ($50.9 billion) and was closing in on the ¥6.64 trillion ($53.6 billion) claimed by Sony, the world's largest consumer electronics maker.

Sony shareholders apparently were unconvinced of an immediate upswing in the company's fortunes, demanding that Stringer provide a clear plan on how he intends to reverse the losses in the video games division and make up ground on rivals like Apple in the portable music system market.

"We will shift Sony from recovery to profitable growth," he assured them, pointing out that an integrated approach to electronics, games and entertainment made Sony a "dominant company" in the digital age.

Sony has shipped 5.5 million PS3 units in the fiscal year through March, short of the 6 million target previously set and of the 5.8 million Wii units Nintendo has sold.

Stringer said the addition of new game titles and upgrading the networking capability of the PS3 will give it a new edge and get the gaming division back into the black in the near future. In the past year, the game division reported an operating loss of ¥232 billion ($1.88 billion), largely because of problems with PS3.

"Attractive game software is the key to accelerate PS3 growth over the next year," he said, adding that nearly 400 new games are scheduled to hit the market this business year.

Reporting to the same meeting, Sony president Ryoji Chubachi remained optimistic on earnings for the full year. Profit is expected to more than double to a record ¥320 billion ($2.7 billion) from the previous year, thanks to the popularity of Sony's camcorders, liquid crystal televisions and digital cameras.