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Sony's New Machines May Impact DVD and VOD

20 Apr, 2004 By: John Gaudiosi

Come 2006, Sony will have plenty of choices for consumers interested in playing games.

Expected to launch late this year is the high-end PSX, which will be a combination PlayStation 2, hard-disc drive and satellite TV tuner broadband-enabled device. Then there's the PSP, the portable PlayStation shipping in March 2005 in the United States, which will introduce a new Universal Media Disc (UMD) format for movies, music and games. PlayStation 3 is expected to ship in the fall of 2006.

Sony Computer Entertainment Europe president and CEO David Reeves revealed some new details on Sony's game plans in a recent online interview with the official PlayStation Web site for the United Kingdom — an interview which has since been pulled from the site.

‘PS Two' Extends Platform Lifespan
Reeves said that a new, sexier model of the current PS2, potentially called the “PS Two,” could be shipping to retailers in the next few years, similar to the PS One that Sony introduced to the market after PS2 had launched.

Like the PS One, which is still selling strong at $49, the PS Two (a name which Sony registered for trademark a few months ago) would have the same internal components and functionality of the current PS2, but come in a smaller, sleeker package. This fits in with the 10-year lifecycle plan that Sony Computer Entertainment America SVP Andrew House outlined at Destination PlayStation in Arizona a few weeks ago.

“The PS2's dominant global market share and strong exclusive library pave the way for an extended platform life for an inexpensive PS2 (similar to the PS One) with budget-priced titles sold in mass market channels to the avid and casual gamers in a wide age range,” said video game analyst Billy Pidgeon of the Zelos Group. “Priced and marketed properly, a ‘PS Two' should perform at least as well as has the PS One.”

Reeves said that both PSP and PSX will be shown at this year's E3 show.

Regarding PSP, Sony has increased its internal RAM from 8MB to 30MB, which will push the graphics capabilities of the handheld beyond PS2's capabilities.

Reeves said that “PS3 is intrinsically linked with the PSX.” He also said that Sony is considering releasing two versions of PS3 — one that is for consumers who want to play movies and have better games, and another that acts as a home server with more bells and whistles. He noted that the high-end version could sell for 600 or 700 euros ($730 to $850), while the lower-end game console could sell for around 200 euros ($245).

Preparing for PS3 and Broadband
Pidgeon said that to prepare for the PS3, Sony must maintain strong third-party relationships, ensure the PS3 is easier to develop for than the PS2, and get development kits out sufficiently in advance to deliver quality exclusive titles at launch to follow through on the PS2's momentum.

Reeves also touched on Sony's interest in getting into the broadband distribution of games and movies. He said that Sony's effort to get into this business would take time, but said the business model would resemble the way games are downloaded onto cell phones.

Pidgeon believes that while Sony and Microsoft will increase online content distribution with their next-generation systems, broadband distribution will not be a major channel until the next cycle, circa 2012. In 2006-era consoles, online games will be more prominent, and there will be more built-in home networking features for both PS2 and Xbox Next (also called Xenon).

Sony is talking to movie and music companies regarding its new UMD format for PSP. When the handheld game system launches next year, it is expected to have a strong lineup of exclusive game content as well as both movies and music available on the new discs.

“For Sony to get movie studios to put their films on UMDs is the same challenge as getting other music labels to put their music on UMDs,” said P.J. McNealy, video game analyst for American Technology Research.

Pidgeon said that when Sony has reached an installed base for PSP of tens of millions of units in North America, the device will attract third-party content providers to invest in UMD as a new format. He said it is unlikely that UMD will become a replacement format for DVD, but PSP owners may opt to buy UMD rather than DVD.

Meanwhile, Sony has plenty of content to port to PSP on its own.

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