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Sony Ready to Take on Facebook for Leadership Place in Virtual Reality Market

Sony Ready to Take on Facebook for Leadership Place in Virtual Reality Market
It just six week that the first virtual-reality headset from Sony would be introduced into the market and Shyhei Yoshida, the head of Sony Corp.’s games development is seemingly happy and demand seems promising. Most customer who own the $399 headset already bought from at retailers around the world haven’t been able to try it out.
Since its so different than anything that’s come before it, it’s almost impossible to predict how customers will react to the new technology, says the 52-year-old Yoshida. The first PlayStation game console introduced more than two decades ago is the closest parallel that he can think of.
"To be honest, we don't know what demand will be. In terms of disruption, this is the most since PS1 and perhaps even greater than that,” said Yoshida at Sony headquarters beside a high-powered demo set for the new devices. 
While the commercial viability of virtual reality is still an open question, it certainly has caught the attention of everyone from Facebook Inc.’s Mark Zuckerberg to President Barack Obama. There have been modest sale of headsets that were brought out by Facebook and Taiwan’s HTC Corp. earlier this year.
Sony can build an initial user base from the more than 40 million PlayStation 4 owners and is pricing its hardware well below rivals’. Music, sporting events, even medicine and virtual education are the areas that company is also planning to go.
The games division at Sony which last year posted its biggest net profit since 2008, is one section that Chief Executive Officer Kazuo Hirai is increasingly relying on to turn around the Japanese company. Yoshida need to make sure that a hole in the group’s finances with unsold inventory is not created by striking a balance between producing enough VR headsets for the anticipated demand.
However the analysts are optimistic about the venture. Goldman Sachs Group Inc. estimates that Sony well be ahead of its primary competitors despite starting months behind and will end up selling at least 1.5 million headsets this year. It also projects that Sony would be able to sell three times as many as HTC's Vive and six times Facebook’s Oculus next year and hit 3 million devices. The reasons cited for Sony’s anticipated edge is the availability of various exclusive content” and the “attractive pricing vs. peers.
In the U.S. and Japan, the pre-orders are already sold out on popular consumer sites, such as Inc.’s portals for the hardware that goes on sale on October 13. Yoshida said his team is working to boost supply as the demand has been “within or above expectations”.
“Sony’s DNA and strength should not be underestimated. They’re well positioned to capitalize on the trend,” said Thomas Husson, an analyst at Forrester Research.

PSVR is “future proof” and the design allows developers to keep squeezing more out of the system for years to come, says Yoshida when asked about how long the headset can stay competitive against newer products expected from rivals. Speculations that Sony will release a more powerful headset next year were also dismissed by him.  

Christopher J. Mitchell

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