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Next-Gen PlayStation to Feature Blu-ray

28 Sep, 2004 By: John Gaudiosi

Sony announced at the Tokyo Game Show last week that its as-yet-unnamed next-generation console, oft-termed PlayStation 3, will support Blu-ray Disc.

The next-generation, high-density optical-disc format that enables recording and playback of digital high-definition video signals and programs will give video game developers additional memory to work with video games.

A Blu-ray disc holds 54GB of data, which is six times more than a current DVD can hold. PlayStation 2 and Xbox use DVDs for video games.

The next-generation console, which will have broadband, will play Blu-ray movies and music, in addition to games, just as PS2 plays DVD movies and traditional CDs. There were no details at press time on whether the new console would be backwards-compatible with PS2, which would require the video game system to read traditional DVDs in addition to Blu-ray discs. PS2 launched with backwards-compatibility to the original PlayStation.

Development of key devices — including a single optical pick-up that can read data from all three formats of CD, DVD and Blu-ray — is already happening in the Sony Group. Research and development in optical-disc technology with even larger storage capacity as well as mass-production technology is also moving forward.

With an installed base of more than 27 million PS2s in North America and more than 72 million units shipped worldwide, Sony owns the video game market.

PS3 is expected to launch in 2006.

Sony's Trojan horse use of the Blu-ray technology in its game machines leaves the competing high-definition DVD, promoted by Toshiba and NEC, out of the game loop, although both Microsoft and Nintendo are developing next-generation players.

More PS Plans
Sony also announced a new slimmer, lighter PS2 model, which will be established in the retail channel by Nov. 1. The new PS2 will feature a new look and new box art as well as a built-in Ethernet adapter, but it will retain the $149 price.

“We expect 3.5 million new PS2 units to hit the United States Nov. 1,” said Mike Wallace, video game analyst, UBS. “Since we also expect Xbox supply to be tight this fall due to increasing demand, hardware sales could fall short of actual demand this season.”

There has been no more official news on the PlayStation Portable (PSP) front, although Sony had 22 playable games at the Tokyo Game Show. More than 100 games are in development for the portable game machine, which is expected to ship late this year in Japan and in March 2005 in North America.

“We have heard conflicting reports on the PSP,” said P.J. McNealy, video game analyst for American Technology Research, who said Sony may have had challenges getting the device ready as well as business model problems.

Nintendo First to Market
Nintendo will be the first to market a next-generation portable gaming device. Nintendo DS ships Nov. 21 for $149 in North America, marking the first time the Japanese company will debut a game system outside of Japan. Nintendo DS ships in Japan Dec. 2.

Nintendo DS will ship with “PictoChat,” which allows gamers to share text and pictures wirelessly from DS to DS. In addition, the portable device will ship with a playable demo of the upcoming game Metroid Prime: Hunters. The “First Hunt” demo will allow up to four players to compete wirelessly. DS also has voice-recognition software.

George Harrison, SVP of marketing and corporate communications, Nintendo of America, said the company will ship 4 million hardware units between launch and March 2005. With production already running smoothly, Harrison said Nintendo could ship more product to retail. Analysts believe Nintendo will be able to sell as many units as it ships. “I think the Nintendo DS pricing is solid at $149, and having a $79 price for Game Boy Advance SP puts Nintendo in a good position this holiday season,” McNealy said.

Nintendo is expected to have at least 50 percent of the 4 million units available for North American retailers, which means there should be no shortages of hardware this holiday.

Harrison said Nintendo will back the launch of Nintendo DS with $40 million in marketing for North America, which is the largest campaign for any console launch in the company's history.

Some retailers will feature interactive kiosks that house two Nintendo DS units, so consumers can try out the wireless gaming features and chat capabilities of the dual-screen portable unit.

Reggie Fils-Aime, EVP of sales and marketing for Nintendo, said the company is targeting an older demographic and psychographic with the new handheld. The plan is to aggressively market the device to a broad audience, including older gamers who have traditionally stayed away from GBA.

More than 120 games are in development for the portable Nintendo. Analysts expect DS games to retail for about the same as GBA games. DS is backwards-compatible with all 550 GBA games on the market in single-player gameplay.

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