PS3 Launch Marred by Violence

People wait in a line three city blocks long, some since yesterday morning, to purchase a Playstation 3 Thursday, Nov. 16, 2006, in San Francisco. Die-hard gamers and entrepreneurs prepares to shell out $500 or more for the new PlayStation 3 console that goes on sale Friday, many of them after waiting on line for days despite the likelihood they'd go home empty-handed anyhow. Retailers across the country arranged midnight openings at some stores to sell Sony Corp.'s sleek black or silver machines, which the struggling electronics company hopes will maintain and build its dominant position in the video game industry. (AP Photo/Ben Margot) (Ben Margot - AP)

ISuppli notes that it's common for manufacturers to take a loss on the hardware, calculating that they'll make it up with game sales. Also, component costs should come down in the future.

"Still, the size of Sony's loss per unit is remarkable, even for the video-game console business," iSuppli said.

The company called the console "an engineering masterpiece," more akin to expensive corporate hardware than a consumer-level computer.

In Philadelphia, Glenn Giersdorf had his PS3 up and running but didn't see it as being an immediate step up from Microsoft Corp.'s Xbox 360 console, which went on sale a year ago. He said a new Xbox title, "Gears of War," actually looked a little bit better than the equivalent PS3 game, "Resistance: Fall of Man."

This is natural, Giersdorf said, as games that are available for the launch of a console generally aren't as good as games that come out later, when developers have learned to take advantage of all the features of the hardware.

"By 2008, Sony is going to be showing that the console has more ability and power than the 360," said Giersdorf, 35.

Giersdorf is also getting a Wii, ostensibly for his 4-year-old son.

"That's how I'm kind of selling it to his mom," Giersdorf said.

The launch of the Wii is expected be less dramatic than the PS3 launch, because Nintendo will have about 10 times as many units available as Sony.

Nintendo's fan base is also smaller. It sold 21 million units of its previous console, the GameCube, compared to 110 million for Sony's PlayStation 2. But it's quite possible that the Wii could grab some market share from Sony with its family-friendly games, $250 price tag and innovative motion-sensing controller.

"It's very, very tempting to a parent," said Giersdorf. "The graphics don't look as nice as the PS3 or 360, but the graphics are fine."

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Associated Press Writer Steve Feica contributed to this report from Hartford, Conn.