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PlayStation VR goes on sale as Sony bets the headset will continue momentum for the PS4

Sony is expecting that its PlayStation VR headset to sell "hundreds of thousands" units after its launch Thursday and the company is ramping up production capacity to deal with the expected demand, the European chief executive of electronic giant's gaming division told CNBC.

PlayStation VR is Sony's first foray into virtual reality and needs to be linked to a PlayStation 4 to work. Sony is hoping the $399 device will help continue the strong momentum its gaming unit has enjoyed amid a slowdown in other areas such as smartphones.

Jim Ryan, president and chief executive of Sony Computer Entertainment Europe, told CNBC on Thursday that the company is expecting strong sales.

"We know from the data we have from pre-orders that the interest we have is significant," Ryan said in a TV interview, adding that at launch, sales will be in the "many hundreds of thousands".

PlayStation VR could sell around 2.6 million units this year, according to SuperData research. Sony is a strong position given that it already has an install base of over 40 million PlayStation 4 consoles, so even a small take-up of the VR headset could bring in additional revenues for the gaming unit.

But with demand strong, Sony will need to keep up with strong production and supply, something that has been taken into account.

"We know that the replenishment cycle is a good one...