Spot On: The 2006 PlayStation Business Briefing

Extended coverage of Sony Computer Entertainment president Ken Kutaragi's presentation on the PS3 delay, Blu-ray, PSP EyeToy and GPS, and PS2 pricing and penetration.

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TOKYO--Today, the 2006 PlayStation Business Briefing kicked off in Tokyo. With little fanfare, Sony Computer president Ken Kutaragi took the stage to lay out his vision for the future of the PlayStation 2, PSP, and PlayStation 3.

First, Kutaragi talked about the PlayStation 2, telling those present that the console has sold more than 100 million units worldwide. He said the console had an average of 60 percent international market share through its product cycle to date, and that Sony had no plans to change its price point, currently $149 in the US. He also displayed a series of charts that showed the console's household penetration as of December 2006. In Japan, 41 percent of households owned a PS2, compared to 32 percent in the US, and 33 percent in the UK.

However, the subject quickly turned to the PSP and its new price. Kutaragi started that part of his presentation by revealing that the handheld has shipped 15 million cumulative units worldwide since its Japanese debut in December 2004. He underlined the fact that while the handheld is selling less than the Nintendo DS in Japan, it has actually penetrated through the game market faster than the PSone or PS2 in their first 14 months on sale.

To explain differences between the PSP and the DS, Kutaragi displayed a chart that compared the age and gender of the two handhelds' users. The charts showed that the PSP owners are predominantly males between their mid-teens and mid-20s. By contrast, the DS has its strongest following between members of both sexes aged 10 and 15, and it is especially popular among females in their early teens and women aged 40 to 50.

Kutaragi commented that when SCE targeted the mainstream audience in the past, it would be with challenging games such as Parappa the Rapper and Dokodemo Issho. He then proclaimed that from now on, it is his intent to explore and develop parts of the market that haven't been cultivated yet--the same strategy Nintendo has repeatedly said it is taking.

Closing his comments on the user data chart, Kutaragi went on to unveil new peripherals and updates for the PSP. He unveiled two peripherals during the presentation: An add-on USB camera (PSP-300) and a GPS receiver unit (PSP-290).

The first game to use the USB camera, which features a microphone that will support online video chat, will be a PSP version of EyeToy, which is slated for release in September. A month later, SCE will provide a firmware update that gives the PSP video/voice over IP (VVoIP) functionality on its own. Kutaragi also noted that the USB camera could be twisted around, allowing users to shoot pictures and video both away from and toward themselves.

The PSP's GPS receiver uses the standard WGS84 reference system. It can get a satellite fix within 40 seconds after starting, and its coordinates are updated once per second. As the first game to make use of the peripheral, SCE is currently developing a GPS-enabled Hot Shots Golf for an October release. Some data libraries for the GPS receiver have already been released to third-party publishers so they can begin making use of the peripheral in their games.

SCE is also planning a number of software upgrades for the PSP. In spring, the company will add Macromedia Flash Player (version 6.0) to its Web browser, Chinese fonts, and support for playing audio via RSS Channels. A few months later in the summer, the handheld will also get support for video via RSS Channels, and an expansion of its UMD video profiles.

However, the biggest upgrade will come between autumn and winter, when Sony plans to launch its "E-Distribution" digital delivery system, which will allow users to download games onto PSPs. Kutaragi further surprised the audience by revealing that SCE is working on a PSone emulator for the PSP that can run games using a close approximation of the original code. Pending approval from third-party publishers, SCE could offer original PlayStation game downloads to PSP owners by year's end.

While Kutaragi didn't talk much about the connectivity between the PSP and the PS3, he gave a few examples of what might be possible, such as using the PSP as a remote control for the next-generation console. He also said the PS3's screen can be transposed onto the PSP and vice versa via Wi-Fi (or USB).

Like his American counterparts, Kutaragi said SCE plans to expand sales of its PSP with new price cuts. In Japan, the company will begin offering the ceramic white color model PSP without the value-pack accessories at the price of 20,790 yen ($177). North America is also getting a price cut starting March 22, when gamers will be able to pick up the portable for just $199, versus the $249 Value Pack currently available. In Europe, the price will drop to 199 euros ($239).

Kutaragi then turned his attention to the subject the audience had been most waiting to hear about--the PlayStation 3. After confirming that the console would launch worldwide in November 2006, he said Sony is planning to produce at least 1 million PS3s a month and to ship 6 million cumulative units by March 31, 2007--a higher production capacity than the PS2's launch.

However, Kutaragi admitted the new schedule would present a challenge for SCE, since the company has never released a machine simultaneously internationally. "It will take 50 to 60 days to ship to some locations by sea, and it will take time to ship to some other locations by land," he said. "We expect that it will be extremely difficult to plan out the PS3's production and shipment, but we will do our best."

Kutaragi also confirmed that the main obstacle to the PS3's completion has been the finalization of the next-generation Blu-ray disc standard, which the console uses. "We initially announced at last year's E3 that the PlayStation 3 will be released this spring," explained Kutaragi. "[But] back then, we were expecting the Blu-Ray's specs to be finalized by the end of August [2005]."

While Kutaragi didn't say it directly, his slide show clearly displayed that copyright protection was the final component that slowed the finalization of Blu-ray's specs. The Blu-ray will use the AACS (Advanced Access Content System) copyright management system, much like its rival, HD-DVD.

Blu-ray may have hindered Sony's plans to debut the PS3 in the spring, but the disc format remains one of the key components for the PlayStation 3. SCE plans to release all PS3 games on Blu-ray Discs (BDs), since current DVDs have weak copy protection by comparison.

SCE estimates its initial BD production capacity at around 10 million units a month. By region, it will be 2.5 million units in Japan, 2.5 million units in Europe, and 5 million units in North America. Kutaragi assured publishers that the cost of pressing a BD-ROM is not as expensive as previously reported, saying that it won't be much more than pressing dual-layered DVDs.

Kutaragi also reiterated that that the PS3's internal media drive will not be a low-end BD player with limited functionality. "The PS3 will feature a BD Player that is up to the latest specifications," he said. "Although some people may think that the PS3 will be a poor man's BD player, it uses the Cell chip, RSX [graphics card], and High-Definition Multimedia Interface [HDMI]. We believe it will be the most cutting-edge player on the market."

Game publishers will also soon begin receiving new versions of PS3 development kits. In April, SCE will distribute DEH-R103X, which features a finalized Cell CPU and RSX GPU. A month later, another kit named DEH-R104X will be shipped, and it will feature a finalized BD-drive and controller--though Kutaragi carefully avoided the subject of the controller.

Both PS3 SDKs will be on loan only, and the final PS3 development kit will not be offered to publishers for purchase until sometime around July. A price hasn't been set for the final kit, though according to Kutaragi it will be "similar to the price of the PS2's development kit when it was initially released."

Aside from the new announcements, Kutaragi took some extra time to stress that SCE is serious about backward compatibility for the PS3. For those thinking the PS3's backward compatibility will work like that of Microsoft's Xbox 360, he emphasized that "the PS3 will feature backwards compatibility with PS and PS2 games from day one."

"I'm emphasizing this because, from what I hear, there are some platforms that haven't been able to completely do this," he said. "It's costly in terms of hardware, but we'd rather [invest] firmly on compatibility from the beginning, rather than to have issues later on."

That said, Kutaragi also commented that SCE is having trouble in some games that don't follow the TRC (Technical Requirement Check) guidelines provided by SCE. He said that backward compatibility isn't always possible when games use the hardware in unexpected ways, saying, "Either it's accidental or on purpose; there's actually a lot of games that don't follow the TRC." Kutaragi used today's conference to ask publishers to follow the TRC guidelines when developing games so that backward compatibility will not be an issue with future PlayStations.

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