Sony offers Microsoft free gift as PS3 likely to miss spring launch

Analysts warned a spring debut looked unrealistic because Sony is still waiting for final specifications on some of the key technology that the new console will offer. The company itself admitted that the launch "could be pushed back" if final specifications, which are decided by industry consortiums, are not decided soon.

The Japanese group is aiming to storm our living rooms with the PS3, which will do much more than just play games. Electronics companies are battling to be the first to launch a viable one-stop home entertainment box that will render separate consoles and DVD players obsolete.

Sony hopes that victory for the PS3 will enable it to dictate the future of more than just the video games console market. The machine will feature a Blu-Ray drive, one of two competing technologies vying to replace DVDs in much the same way that VHS fought Betamax to the death all those years ago. The rival format, HD-DVD, is being backed by Microsoft, and appears on the Xbox 360.

A delay by Sony leaves the door wide open for Microsoft to mop up market share with its own next-generation console, the Xbox 360, which hit the shops in the UK in time for last Christmas.

A spokesman for Sony Computer Entertainment yesterday said the PS3 would be "one of the cheapest Blu-Ray players on the market so will accelerate growth into people's homes". The Playstation 2, which was launched in 1999, was one of the first devices to features a DVD drive, helping to fuel the take up of what was then a new technology.

The PS3, which has yet to be priced but is likely to be well under £300, will also offer a range of multimedia functions in addition to playing computer games, including audio and video streaming, digital photo storage, internet access and video chat.

"It has been designed to be the centre point of entertainment for your living room," the spokesman added. He added that the company had not officially abandoned its plans for a spring launch.

Merrill Lynch warned in a research note last week that the cost of making the PS3 was rocketing and could end up being $900 per unit. This means Sony will have to take a huge loss on each console or risk ceding even more market share to Microsoft.

The other new-generation console being primed for the market is Nintendo's Revolution, which is also expected to launch some time later this year.