Sony PS2 a Trojan Horse for the Post-PC Age

Computergram International, Oct 20, 1999

Sony Corp's forthcoming Playstation 2 console is viewed by the company as a Trojan horse for the post-PC age. After its initial launch in March 2000, the games console will be positioned as an internet gateway and digital media content provider for the home. In 2001 it will launch a digital distribution venture, called e- Distribution, which will distribute games software, music and films via a broadband cable TV networks.

The Playstation 2 will have an internal 56K modem as standard but the broadband distribution strategy will require some additional hardware for the machine. First, Sony will release a 50Gb hard drive to store digital content. Then it will release a cable modem to allow users to access the games, movies and music. Sony eventually sees the networked download replacing CD-ROMs and DVDs as it principle sales mechanism.

However, according to the Nikkei Electronics, Sony could face problems establishing the console in its traditional games field. The company had been planning to release the console in Japan in December 1999 but delayed the launch until next March, because of there would only be ten titles available for the machine. Some analysts also wonder what kind of margins Sony will make on the machine, which will sell for 39,800 Yen ($372) when it is released, less than the cost of the CPU and graphics processor. Over time, Sony expects the price to drop to around 20,000 Yen ($187). However, Sony is planning to sell the console as a loss leader and make profits on DVDs, CD-ROMs and later, network downloads.