Image: PlayStation 3
Katsumi Kasahara  /  AP
Video game fans try out Sony's PlayStation3 during a two-week-long free trial service at the Sony building in Tokyo. Plagued by production problems, Sony was only able to ready 100,000 units for its Nov. 10 launch in Japan.
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updated 11/10/2006 6:47:58 PM ET 2006-11-10T23:47:58

Sony's PlayStation 3 made its highly anticipated debut to long lines in Japan on Saturday, marking the first launch of what's expected to quickly become a global sellout.

Throngs of people lined up for several hours around Bic Camera, an electronics retailer in downtown Tokyo, to get their hands on one of the video game consoles. It sold out even before the store opened at 7 a.m., and would-be buyers were turned away from the store.

Plagued with production problems, Sony Corp. has managed to ready only 100,000 PlayStation 3 machines in time for its debut in Japan. When it goes on sale in the United States on Nov. 17, some 400,000 PS3 consoles will be available there. The sales date has been pushed back in Europe until March.

"Standing in line today is the only way to make sure I got one," said Takayuki Sato, 30, among the buyers who queued up at Bic Camera, snaking around the building in a complete circle.

The enthusiasm was so great, clerks with megaphones asked the crowd to stop pushing, warning that all sales would end if there were any injuries. The retailer refused to say how many machines it had, but said it could estimate the number of buyers by the length of the line around the building, and knew they had sold out.

Powered by the new "Cell" computer chip and supported by the next-generation video format, Blu-ray disc, the console delivers nearly movie-like graphics and a realistic gaming experience.

But game makers like Sony must recoup the exorbitant development costs for the machines by selling software, and programming its cutting-edge hardware is a costly and time-consuming task. Only five games were on sale for the PS3's Japan launch date.

Sony expects to lose $1.7 billion in its gaming division in the fiscal year through March 2007.

The red ink is coming at a time when the Japanese electronics and entertainment company, known for the Walkman portable audio player and "Spider-Man" movies, is struggling to stage a comeback.

In recent years, Sony has fallen behind in key products like flat-panel TVs and digital music players. But it has been making progress with a two-year revival by getting back to basics in its consumer electronics operations.

But a major fumble in its PS3 business could prove a huge blow at a time when it's seeing its brand image badly tarnished by a massive global recall of lithium-ion batteries for laptops.

In an unprecedented move, Sony slashed the price for the cheaper PS3 model in Japan ahead of its launch by 20 percent to about $420 in what some critics have scorned as a desperate effort to maintain market share in the face of intense competition with Nintendo Co.'s Wii console and Microsoft Corp.'s Xbox 360.

Wii goes on sale Nov. 19 in the U.S. and Dec. 2 in Japan. The Xbox 360 has had a year start.

Tatsuya Mizuno, analyst for Fitch Ratings in Tokyo, believes it will be hard for Sony to maintain the 70 percent market share domination it has built with previous PlayStation consoles, and Sony will likely lose some of that market to rivals, especially Nintendo. Sony has sold more than 200 million PlayStation series machines over the years.

The PS3 was initially promised for worldwide sales for spring this year but was postponed in March to November. In September, the European sales date was delayed by another four months.

Although Sony is sticking to its plan to ship 6 million PS3 machines worldwide by the end of March next year, Mitsuhiro Osawa, analyst for Mizuho Investors Securities Co., thinks Sony may fall short of that target.

"There may not be enough machines to go around, and people will buy Wii and Xbox," Osawa said. "For all you know, it may take Sony five years to get back the money it's invested in PS3, even 10 years if it doesn't watch out."

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