When the PlayStation 3 reaches UK shelves it will be horribly late and very expensive. It is expected to retail at up to £425 – you can buy a Microsoft Xbox starter kit for around half that, and Nintendo is also taking a cheap-and-cheerful route with its rival Wii machine.

Meanwhile, it seems hard to believe, but we originally expected to see the PS3 in Japanese stores last spring. Now it will hit Japan and the US in November this year and UK shelves in March 2007. The blame on both counts lies with Sony’s pricey and evidently hard-to-manufacture Blu-ray DVD system.

Initial PS3 shortages will stoke hype and could even increase long-term demand, some onlookers ventured this morning, while the release pushbacks have given games developers valuable time to polish their products – a large number of good PS3 games will be vital. But missing Christmas in Europe is a serious blow for such an expensive toy and Blu-ray is a massive gamble that has already hit Sony hard.

In April, Sony posted a 68 per cent rise in full-year operating profits to ¥191.2 billion (£935m) but hopes that the Japanese electronics-to-media group could finally be staging a concerted recovery were overshadowed by concerns over larger than expected costs for the launch of the PS3.

Sony expects its games division to rack up an operating loss of ¥100 billion this financial year - a spokesman told Times Online that guidance stood today. The hit is expected to cut group profits in half, to ¥100 billion.

But the most serious damage could be reputational. Europe's gaming bloggers, already vexed at being charged more for the PS3 than their American peers, are now seriously upset. "As far as brand loyalty goes I’ve been a die hard customer of Sony," said one relatively muted poster on the Gizmondo site, who claimed to have bought several PlayStations in past years. "Unfortunately this news has put an end to that."

Meanwhile, Blu-ray is proving troublesome elsewhere. In Korea, it was launched last weekend. Or at least the disks were – reportedly, there were no players in the shops to view them on.

The technology will go head-to-head with Toshiba’s rival HD DVD system in a re-run of the video cassette wars of the late 1970s. The omens may not be good. Sony’s pitch for Blu-ray – higher quality at a higher price – sounds similar to that it made for its ill-fated Betamax.

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