Sony Set to Launch PlayStation 2

SAN FRANCISCO (03/01/2000) - This week, impatient Japanese video game players are queuing up to be the first in their prefecture to fire up Sony Corp.'s groundbreaking PlayStation 2. Clearly, this is a system worth getting excited about, even though it won't hit U.S. shores for several months. The update to Sony's successful game system boasts an innovative processor and exceptional graphics, plus some stuff you don't expect on the playground.

The power behind the PlayStation 2 is the Emotion Engine, its 300-MHz processor, developed by Sony and Toshiba Corp. This chip handles twice as many floating-point operations per second as a 733-MHz Intel Pentium III, which translates to very good graphics, say analysts at MicroDesign Resources. Sony also includes a high-powered graphics synthesizer chip with 4MB of video memory and 32MB of high-speed Rambus memory.

Externally, Playstation 2 has two controller ports, two memory slots, two Universal Serial Bus ports, Sony's high-speed port, a Type III PC Card slot, an AV multicable output, and an optical digital output. Sony hasn't mentioned a built-in modem; the system will likely support an external modem.

The unit runs PlayStation 2 and original PlayStation games, as well as DVD movies and audio CDs.

The PlayStation 2 costs about $368 in Japan (Sony won't even hint at a U.S. price) and the company says it expects to ship 1 million units in the first week. If that comes true, Sony will be on course to leave Sega in the dust: The Dreamcast sold about 1.5 million units in North America over five months.

PlayStation's Game

But dominating the game console market may be just the beginning of Sony's ambitious plan. Last September, Sony executives said the PlayStation 2 would become a "platform for Internet-based electronic distribution of digital content in 2001." They also noted that one day you'll be able to download content to a Sony hard drive connected to a PlayStation 2 via a network adapter expansion module.

Consider the advent of Web-based applications, the proliferation of e-mail, and the ever-broadening interest in Web content. A game console that can surf and store data could handle an awful lot of tasks that many people do with a home PC.

Shortly after those comments, Sony seemed to stop talking about PlayStation 2.

Representatives from Sony Computer Entertainment America declined comment for this report, and the recent PlayStation 2 festival in Japan offered a peek but little insight.

But perhaps the console speaks for itself. Jeff Brown, director of corporate communications at Electronic Arts (which makes games for both consoles and PCs) says the PlayStation 2 is a very impressive machine.

"This technology will make interactive entertainment a mainstream pastime," he says, after running his own software on the PlayStation 2.

Does PlayStation Challenge PCs?

Mainstream or not, major PC vendors aren't running scared--not from this release, anyway.

"We don't see it replacing the PC," says Brian Zucker, Dimension engineering manager at Dell. The PlayStation 2 complements the home PC, he says.

A game console, even as powerful as PlayStation 2, just can't compete with the flexibility of a PC, Zucker says. Even if PlayStation 2 adds limited Web access, it won't offer even basic PC functions out of the box. To achieve that, you'll have to buy a hard drive and keyboard, he says.

Mark Vena, director of consumer desktop marketing at Compaq, says next-generation consoles aren't a threat to PCs because the two devices appeal to very different crowds, even among gamers. Consoles are for people who want simple, mainstream games, while PCs appeal to game players who want more interaction and sophistication.

And if somebody's looking for Internet access, they'll buy an inexpensive PC that's designed for that task, not a pricey gaming console that offers Web access as an add-on feature, Vena says. "It's very unclear about the cross-over capabilities of traditional consoles into the traditional PC market," he adds.

Then again, the PlayStation 2 could be following an ancient battle strategy, suggests Keith Diefendorff, editor-in-chief of Microprocessor Report. Sony may sneak its digital Trojan horse into homes as a simple gaming console, and then beef it up so it can nudge the PC out of the home stable.

"Sony is out there plotting," Diefendorff says.

Luring the Reluctant

Roughly half of U.S. households have PCs, and the rest are even more resistant to buying a PC than the first half, Diefendorff says.

They aren't as likely to resist a simple game console, and that's where PlayStation 2 could gain a toehold as a PC alternative, Diefendorff says.

The Web interests many people who don't want to learn to use a PC, he adds. For some, "the PC is just scary; for some reason a game console is not," he says.

Then, Sony can easily offer add-ons with service and functions that will let PlayStation 2 perform PC-like functions, he contends.

The Web is making it easier, too. You don't need a hard drive to store Web-based e-mail or to browse.

Dreamcast has a modem, but currently no Web browser or e-mail support, and Sony is learning from Sega's omission, says Rob Enderle, vice president of desktop and mobile technologies for Giga Information Group. Enderle expects Sony to ship the PlayStation 2 with basic Web browser and e-mail functions, likely from a third-party developer.

Sony May Overlook Opportunities

Ironically, Sony itself may hamper the PlayStation's moves on the PC. The game console group operates separately from Sony's PC group, which makes VAIO notebooks and desktops.

If the PlayStation and VAIO groups worked together, they could wield close to a knock-out punch, Enderle contends.

For example, if Sony PCs--and only Sony PCs--could also play PlayStation games, the result could be a huge boon for both divisions, he says.

Sony could even "buy Bleem and put it on their PCs," Enderle says, citing a company that sells emulation software that runs original PlayStation games on a PC. Sony is suing Bleem.

But Sony's PlayStation and PC business units, which are physically near each other in Japan, continue to work separately. This leaves the PlayStation 2 more vulnerable to competition from other new console systems, such as one from Microsoft.

Microsoft's Challenge

Microsoft's game platform, expected to ship by midyear, will let you play PC games on your TV, Enderle says. The unnamed system--commonly referred to as the Xbox--will cost about $200.

PC game-makers must add a small operating system on their discs for them to run in Microsoft's player. But once developers routinely add this tiny application to their CD-ROMs, packages will appeal to both console and PC game players, he says.

Enderle expects PlayStation 2 will offer more computing power than the Microsoft box.

Despite its PC-like functions, PlayStation's price tag could cast its role.

When full-fledged PCs can be had for about $500, would you really pick up a PlayStation 2 for Web-surfing?

Yet, price is volatile. Enderle expects the PlayStation 2 will drop to $199 by year end. Then, the PlayStation 2 versus PC battle "gets more interesting," and the Trojan horse could have a strategic edge.

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