TOKYO – For most of the past year, Sony Corp.'s PlayStation 3 video-game console seemed finally to be taking off after a slow start.
The PS3, trailing Nintendo Co.'s Wii and Microsoft Corp.'s Xbox 360 consoles, was closing in on the No. 2 Xbox 360, with new games and quarterly sales growth at twice the speed of 2007.
But early results from the 2008 holiday season aren't promising. U.S. sales of the PS3 fell 19 percent in November from a year earlier, while sales doubled for the Wii console and rose 8 percent for the Xbox 360, according to research firm NPD.
Analysts say they expect PS3 sales for December to be flat or lower than in 2007, while sales for its rivals are likely to rise. And Sony may not reach its goal of selling 10 million PS3 consoles in the fiscal year through March, analysts say.
The sales decline is a heavy blow to Sony, which was banking on the video-game division to provide a bright spot as its core electronics business is hit by the global economic downturn.
Sony in May forecast that its games division would turn a profit this fiscal year after two years of losses since launching the PS3 in 2006. Meanwhile, poor sales of television sets and digital cameras are forcing the company to lay off thousands of staff and close factories.
Sony's strategy of selling a pricey game machine with advanced features and cutting-edge components appears to be backfiring as a deepening recession has U.S. consumers more price-sensitive than ever.
If Sony doesn't close the gap with its rivals, it could risk making the PS3 an afterthought to game publishers, who focus most of their resources on the machines with the most users.
At the end of September, the Wii had a wide lead with nearly 35 million units sold since its launch in 2006 compared with about 22 million Xbox 360 consoles and 17 million PS3 machines.
Nintendo in November sold 2 million Wii machines in the U.S., while Microsoft sold 836,000 Xbox 360s and Sony sold 378,000 PS3s, according to NPD.