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Playstation2 Poised To Play Stateside

by Lauren Wiley

May 24, 2020 | In four months, Sony's long-anticipated gaming supercomputer/DVD and CD player (and eventually Internet gateway) will burst onto the scene in North America. Sony Computer Entertainment America will launch Playstation2 here Oct. 26 with an initial shipment of 1 million units, followed by an additional 2 million through March 2001. The consoles will have a suggested retail price of $299; a controller, multiport and 8MB memory card will be sold for $34 extra, and software titles will be $49 each.

Since its release in 1994, the original Playstation has sold more than 70 million units. As a result, Sony controls more than half of the world's video game market, worth about $13 billion in the United States and Japan alone. In 1998, Playstation sales consisted of 40 percent of Sony's profits. Sony is depending on the success of Playstation's sequel to remain a dominant force. The console already has made a huge splash in Japan. In the first two months of after its March 4 release there, Sony sold 1.8 million units--just shy of the computer giant's goal of 2 million.

The console's 16-inch-tall black and blue tower houses the "Emotion Engine," a chip that generates the polygons used to build 3-D graphics. The original Playstation could generate 360,000 polygons per second; its successor can produce more than 20 million.

Despite its triumphant debut in Japan, there have been several problems. First, customers began complaining that when they saved Ridge Racer V game files, they wiped out the consoles' DVD drivers. The drivers could be replaced by using the Utilities disk, and the company sent out upgraded Utility disk software a week and a half later to correct the glitch, says Molly Smith, Sony Computer Entertainment public relations director. Then came reports that some Japanese consumers found a way to watch North American DVDs using Playstation2. Sony had agreed to manufacture consoles that only could play DVDs sold with regional code for Japan -- one of six codes created to appease Hollywood film makers who feared losing money if foreign audiences bought DVDs when they were released in the United States instead of going to the theater.

Sony's agreement is made even more important to movie studios in light of the lack of DVD penetration in the Japanese market. Because so few homes own DVD players, many consumers are utilizing Playstation 2's DVD capability. A survey by Nikkei Online conducted a month after its release showed that 74 percent of consumers bought the console for both games and DVD movies and that 53 percent bought DVDs to watch using the system. The code flaw was present in just the first million consoles shipped and the problem no longer exists, says Smith, adding that "None of these problems will affect the U.S. launch."

The U.S. market is a lot different from the Japanese one, she says. For example, DVD players are far more common in the States, so the ability to play DVDs may be a less important feature. However, it may still be considered competition to DVD player manufacturers. Smith doesn't consider Playstation2 a threat to the DVD player market. "I would hope that (DVD player manufacturers) would be looking at this as a potential way to broaden the market," she says.

It's the game selection and the audiovisual capabilities of the console that will make or break its success in the U.S. "I think it's going to come down to what sort of compelling entertainment we can offer," Smith says. According to Sony, more than 200 developers have signed license agreements with Sony and close to 300 titles are in development so far. In addition, Playstation2 supports the more than 800 original Playstation games already on the market.

Rumor had it that Sony would include a hard disk drive and a modem in the U.S. Playstation2s to pre-empt the challenge from Microsoft's X-Box game console, which will hit markets in the second half of 2001 complete with an 8GB hard disk drive. Microsoft claims the X-Box will boast graphics chips three times the speed of Playstation2's. Another major competitor, Sega Enterprise, already has sold more than 4 million Dreamcast consoles, a gaming unit with a built-in 56k modem, but no hard drive. Sega announced plans to give away the console to consumers who sign up for its $22-per-month Internet service for two years.

Sony's Smith denies that the company has ever considered installing a modem or drive in its initial shipment of U.S. consoles. Sony does plan to sell a hard disk soon, but will not say when or for how much. As for a modem, Smith says, the company wants to wait for broadband to become more widespread, and that may or may not be before the X-Box premieres. "We need to have a pretty proven installed base out there to log on to our network," she adds.

If Sony succeeds in building that user base, expect to see Playstation3 in 2005.

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