According to Merrill Lynch analysts quoted in the Financial Times on Sunday, Sony’s next-generation PlayStation 3 video game console might not make an appearance in key markets this year and could cost the company $900 per unit to produce.

Sony had originally indicated a spring launch for its console in Japan and expected a North American launch in November.  But now, Hitoshi Kuriyama of Merrill Lynch in Japan said there are reports that the PS3 could be delayed by between six and 12 months.

This could be to avoid the steep financial losses Sony would incur trying to subsidize the prices of its unit to avoid low sales.  It looks like Bill and Microsoft will have a huge market share by then with XBox leading the way. 

My guess is that this could be the exit door for Sony and PS to step-out of the industry.