PlayStation 2 launches in Japan

Sony takes risks with new vidgame console

TOKYO — Sony’s PlayStation 2 videogame console hit the market in Japan over the weekend as tens of thousands of consumers waited for their chance to buy one of the most highly anticipated new products of the year.

Sony saw a flood of orders for PlayStation 2 shut down its Web site in its first minute of operation, and thousands lined up around electronics stores for days in advance of the product’s launch.

Boasting a high speed microprocessor that can play DVDs, PlayStation 2 is priced at 39,800 yen ($372), and Sony is hoping that the game unit will become a portal through which users can play movies and a terminal for online music distribution and Internet access.

PlayStation 2 is set to hit the U.S. and European markets later this year.

One million units will initially hit the Japanese market along with 11 software titles. Sony has monthly production capacity of 500,000 units and expects to increase software titles for the new game to 27 by the end of the month. PlayStation 2 is backward compatible, so it can play games designed for the old console.

The current PlayStation, which has racked up global sales of more than 70 million units, is the most profitable product produced by Sony. The company’s videogame business, Sony Computer Entertainment, accounted for about 40% of Sony’s overall profit in the last fiscal year; the movie division tallied about 12% of the electronics giant’s profits.

Sony is certain to sell its initial 1 million PlayStation 2 units quickly, but the company is nevertheless taking some risks with its new console.

First of all, Japanese videogame makers are balking at the higher production costs needed to make games that will utilize PlayStation 2’s computing ability. Unlike rival Sega, which also makes games, Sony depends on other companies to provide software.

Japanese journos who specialize in the videogame trade predict that it may take some time before the company develops a killer application for its new console; meanwhile, consumers may balk at its high price.

Secondly, Sony is pushing online sales for its new game, angering the thousands of retailers that are a part of Sony’s family-like group of sales outlets.

Sony also irked its rivals by saying that PlayStation 2 offers DVD playback capabilities that equal those of high-end players. An official from Pioneer scoffed at the claim that the game unit was as good as a Pioneer DVD player. Sony “went too far in saying that PlayStation 2 images are comparable with ours. You can see the difference in quality,” the official told the financial daily Nihon Keizai Shimbun.

Finally, while Japanese enthusiasts are willing to pay close to $400 for a videogame console, it remains to be seen if Americans or Europeans will shell out that kind of money for the high-end game machine.

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