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In the early 1990s, Sony made a decision to enter the videogame market when the industry was dominated by two companies, Sega and Nintendo. Within two months of the launch of its PlayStation console in 1994, more than 300,000 units were sold in the US, almost doubled the installed base of the Sega Corporation’s Saturn console.
The PlayStation changed the landscape of the videogame industry by using compact-disc technology rather than the cartridge system, giving players better graphics and sound quality. With the initially success, Sony quickly installed itself in the market that had been foreign to the company just a year before (Luh 2003, p.109).
By the time the PlayStation 2 was introduced in 2000, Sony had already established itself as the industry leader. Currently, more than 500 million PlayStations have been sold worldwide. Its success is the result of several factors; a head start in launching the PlayStation 2 earlier than its two rivals; its support for older games written for the original PlayStation console; its ability to function as a DVD player; and Sony's close partnerships with videogame publishers, which ensured a stream of popular titles. All of this enabled Sony to garner a 70% global market share (The Economist 2005).
With each new generation of consoles, new features were introduced. The PS2 has a built-in DVD player and comes with a network adapter that allows players to get connected to the internet (Luh 2003, p.112).
Videogames are a major source of profits for Sony. Sony Computer Entertainment, maker of the game console, accounts for about a third of its operating income (Dvorak and Wingfield, 2005, p.3).
In May 2005, Sony unveiled its next-generation console, the PlayStation 3 (PS3), at the annual Electronic Entertainment Expo (E3) videogames trade show in Los Angles (Lester, 2005, p.26).
The PS3 will have computer and entertainment media capabilities, and is touted as part of Sony’s plan to capture the entire living room. Technological convergence is one important feature of the new console, as it allows for downloading of music, movies and videoconferencing. It will also have internet and network capabilities, and be able to generate high-definition, cinematic-quality graphics With the PS3, Sony also plans to expand its target audience to beyond the traditional gamers (Sheffield 2005, p.4).
The new console is base on a new processor called Cell. Sony calls it a “supercomputer on a chip�?, and it is expected to be more than ten times more powerful than current PC chips. Compared to the PS2, the new console is expected to run at 35 times faster (Lewis 2005, p.126).
The PS3 has a built-in DVD player based on the new Blu-ray technology developed by Sony. Blu-ray discs can store 25GB or 50 GB of data per disc, for single and dual layer media respectively (Cross 2005, p.91). This is several times the capacity of today’s DVD discs. The console also uses Bluetooth wireless networking to connect up to seven controllers. The PS3 will work closely with the PlayStation Portable (PSP) handheld media device, and it has a slot for a removable hard drive. Sony has been vague about plans to exploit the broadband capabilities of the PS3, including the possibility that it could deliver Sony music, Sony movies, and Sony television shows directly to consumers (Lewis 2005, p.126).
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Choo KeeFong 01:44, 28 Oct 2005 (EST)
