PlayStation 2 arrives in US

Initial shortages will amount to a small, short-term problem for Sony's new game console, analysts say. The real challenge is competition. Can you say Xbox?
Written by Richard Shim, Contributor

The PlayStation video game console has been one of the most successful products in the history of consumer electronics, and Sony had planned to build on that success with its PlayStation 2.

With only 500,000 units available to US retailers by Thursday's launch, and a pre-order-only rollout in the UK, that won't happen immediately. That's the bad news. The good news, analysts say, is that consumers have short memories. "Twelve months from now, people will have forgotten about this," said Gartner Group analyst P.J. McNealy. "The majority of the 75-some-odd-million owners of the original PlayStation will remain loyal."

The PlayStation 2 incorporates home-entertainment features designed to expand its audience beyond hard-core gamers. Games for the original PlayStation can be played on PlayStation 2.

Blaming a component shortage, Sony last month said it would ship half as many units to the US as it originally promised by the 26 October launch date, plus 100,000 units per week until the end of 2000. That may make the PlayStation 2 hard to find this holiday season, but analysts say it won't hurt the long-term success of the system.

The UK launch is 24 November.

In the short term, that will be a big deal, McNealy said. Consumers have been anxiously waiting for the system, and no one wants to wait to get something for the holidays. But he said Sony could withstand the hit.

Sony officials have said they expect to reach their global target of 10m units sold worldwide by the end of the company's fiscal year in March 2001. Nearly 4m units have already shipped in Japan, where the device has been on sale since March. In fact, some analysts predict sales will reach beyond 10 million units globally.

In a report from UBS Warburg, the financial services group of UBS AG, analyst Masahiro Ono estimated Sony would exceed its 10 million shipment target to hit 11.1 million, followed by 18.7 million in fiscal year 2001 and 27.9 million in fiscal year 2002.

By year end, UBS Warburg predicted PlayStation 2 shipments could near 35 million units.

The PlayStation 2 may have more to contend with than supply issues, however. Microsoft's Xbox is expected to give all game-console manufacturers a headache. "If you think that Sega and this supply issue is giving them competition, wait until Xbox," said McNealy. "2001 will be a fun year."

The PlayStation 2 will have to contend with the Xbox's high-end specs -- starting with a 733MHz Pentium III processor, 64MB of system and graphics memory, and a 100Mbit/s Ethernet connection.

The PlayStation 2 will be armed with a 300MHz 128-bit processor, 32MB of system memory, and 4MB of graphics memory. The 56Kbps modem that was originally included in the system's specs will be available as an add-on.

Hardware isn't everything, according to Forrester Research senior analyst Jeremy Schwartz. "Console gaming is not the same as PC gaming in either hardware or software," said Schwartz. Branding and support from gaming publishers are also important.

Schwartz added that Xbox does not have the strong brand that others in the gaming industry have because it is the newcomer to the field. Xbox also may not have the support of gaming publishers including Electronics Arts, the leading game publisher in the business.

For complete console and PC gaming news, see Gamespot UK.

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