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"Sony's PlayStation 2: More Than a Game Machine"

Sony, which controls about 60% of the world's game console market, is scheduled to release the US version of the PlayStation 2 on October 26. Interestingly, the new system will be priced the same as the original PlayStation, which launched five years ago at a suggested retail price of $299. This machine is tremendously more powerful with the new Emotion Engine processor and ability to play DVD movies and audio CDs. Sony, planning on future competition from the Microsoft X-Box and Nintendo's Dolphin system, has added support for a hard disk drive and modem to the already loaded PlayStation 2 console. 

Despite recent reports that the system would be shipped with a built-in hard drive and modem, the system will not include either of them as a standard. However, the system is upgradeable and will offer the option to install them as add-on devices. The unit also includes a USB (universal serial bus) port for linking to other devices. Sony had been delaying the decision to incorporate additional hardware components into the PlayStation 2 until it could determine the widespread availability of high-speed Internet connections like DSL. 

The PlayStation 2 was an overnight success in Japan, selling 980,000 units in just the first three days, which was just short of Sony's original estimates. They have now sold 1.8 million of the new consoles in Japan, and Sony expects to sell over 1 million PlayStation 2 units during the US launch. They have estimated an additional 2 million units to ship through March 31, 2001.

For makers of gaming systems, it's not the actual sales revenue from game consoles that is their ultimate goal. They each hope to capture as large of a market share as possible by creating a network of users of their particular systems. In doing so, they establish a large client base to whom they can sell games and other merchandise. The greater numbers of users also attract video game publishers, as it is their support that really drives a market. The developers of video games each pay a licensing fee to the respective game console manufacturer and, without quality games; a console would be useless. It appears that numerous developers are supporting the new system as Sony expects there will be more than 50 PlayStation 2 titles by the end of the year.

The availability of a modem upgrade will be particularly interesting because it may enable a new revenue stream for Sony, which could charge customers who access the Internet through its Sony Communication Network. For instance, Sega Enterprises Dreamcast, a competitor in the game console market, includes a modem as standard hardware. They have now decided to give away the Dreamcast to users who sign a 2 year Internet service contract at a cost of $22 a month. Without a doubt, the additional revenue is an attractive option to console makers.

Perhaps the most interesting feature of the new console is the ability to play games designed for the original PlayStation. Having the ability to play the large number of titles available for the PlayStation should help the sales of the new version and keep existing customers happy. With the impending release of multiple console game systems, it will ultimately be the consumer who determines the winners and losers. One thing is certain -- the upcoming year will be very exciting for new and experienced game players.

  - by Clayton Crooks

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