News Analysis: How to turn delay to an advantage

With Sony delaying the long-awaited UK arrival of its PSP console, Claire Murphy investigates what factors PROs have to take into account in keeping consumer interest alive during the wait for the product launch.

European games enthusiasts last month learned that the launch date for the PSP had slipped back so Sony could be sure of maintaining supply of the hotly anticipated product - the first to combine film, music and games - in the US.

While Sony Computer UK head of PR David Wilson refuses to be drawn on the new planned launch date, games industry observers suspect it will be at least June before the portable consoles appear. Some even speculate that Sony may maximise crucial autumn sales by launching in September.

Either way, it is giving arch-rival Nintendo a significant few months of the portable gaming market to itself with its DS console. Launched last month, DS is the fastest-ever-selling console in the UK, shifting 87,000 units in two days.

But the PSP delay succeeded in attracting another crop of headlines - linking supply problems to the fact that consumers are expected to buy the unit in their droves.

Wilson denies there is ever any deliberate policy to postpone a launch simply to add to hype, but accepts that coverage for PSP has been 'tremendous'.

'But the launch delay is only about production issues,' he adds. 'The bottom line for us is that we want to be able to launch in a territory and then maintain supply.'

Explosive launch

Simon Perry, publisher of media technology website Digital-Lifestyles.

info, suspects that Sony's strategy is to build up enough stock for an 'explosive launch' in the US, the publicity from which will fuel demand this side of the Atlantic.

'There is so much currency in becoming the biggest global gaming launch of the year, such as with the launch of the Halo 2 game late last year.

So it makes sense for Sony to concentrate its product supply to the region that can stoke up the largest launch figures,' he says.

Sony is no stranger to the commercial and PR implications of a delay in getting product to market. Last December a ship carrying its PS2 consoles got stuck behind a tanker in the Suez Canal. Sony had to hire Russian cargo planes to rescue the supplies, in order to get them into the hands of eager Christmas shoppers.

Although this caused a two-week delivery delay to European stores, Sony got lucky on the PR front - stories referring to a 'Suez crisis' only started appearing on the day that supplies were re-established. But it cost the company dearly where it matters most - third-quarter profits in its games division plummeted by 37 per cent, attributed largely to the transport delay.

Nevertheless, the Suez tale was so PR-friendly that journalists smelt a rat. 'We were all a bit sceptical about that one, it was so headline-grabbing,' says Edge games editor Margaret Robertson.

The Times consumer editor Valerie Elliott goes further: 'It is difficult to know whether this is a real corporate crisis or a stunt to boost demand.' She even rang Lloyd's, trying (in vain) to find out whether the ship in question actually had any PS2s on board.

While no company would compromise sales figures by deliberately delaying a launch, PROs agree that there are ways to capitalise on the fact that consumers have to wait.

This kind of challenge occurs particularly in highly competitive sectors, such as technology and pharmaceuticals, where new products incorporate a high degree of research and development and attendant risks of glitches.

Companies are often overambitious in efforts to get first-mover advantage.

On Monday, for example, drugs companies Schering and Novartis were forced to admit that they were delaying the application for US Food and Drug Administration approval of their new colon cancer drug for two years after receiving disappointing trial data. As publicly listed companies this release was dictated by the regulatory requirement to announce to the markets any information that could be deemed share-price or profit-sensitive.

Built-in expectations

'It all depends to what extent analysts had already built expectations about a product's launch into their earnings predictions,' says Buchanan Communications director of investor relations Beth Ogilvy.

'If the delay has a significant effect on earnings it is far better to manage expectations downward so the firm can recover more rapidly,' she adds.

Bad news about a major product launch can have an immediate effect on the share price - Apple's dipped by eight per cent in March last year when the company admitted it was putting back the European launch for iPod Mini by three months.

The other priority for PROs managing the publicity surrounding a launch delay is to not lose any potential customers to the competition.

Ketchum London CEO David Gallagher advises explaining exactly why the delay has happened - and giving consumers a new launch date to encourage them to wait for the product: 'Agree a timetable that you can live with, and then live with it. There are only so many times you can miss deadlines before consumers start to believe conspiracy theories.'

Of course, the impression of scarcity can boost a product's appeal. But for Sony's PSP, likely to be a sector-defining item, that hardly seems necessary.

Sony can only hope that European consumers are as willing to wait for PSP as they were for the iPod Mini. And as both brands are targeting similar individuals, at least Apple has introduced the idea of waiting-list chic.

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