Sony Plans Handheld PlayStation,To License PS2 Technology - Twice

Sony Plans Handheld PlayStation,To License PS2 Technology

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Sony has introduced PSone, a handheld version of its PlayStation game console, and will license the microprocessor technology for PlayStation 2.

Published reports say that Sony will introduce a portable version of the system in the Japanese market on July 7, called PSone. The announcement, which was made in Tokyo, said that PSone will be introduced in the U.S. this fall. The retail price in Japan is 15,000 yen, or around $140. The U.S. price will be determined later. Sony reportedly said it will produce around 6 million units by March 31, 2001.

PSone will have network connection capabilities via mobile phones. However the unit will not be battery operated. It will have to have an electrical connection, either at home or in the car.

Sony's plan to build upon its dominant position in the game console market by licensing out the microprocessor technology for the PlayStation 2, but analysts at Cahners In-Stat Group called the decision less impressive than it sounds.

Gerry Kaufhold, principle analyst for In-Stat, said Sony would be licensing a game technology that would be all but obsolete by the time another vendor obtained the license and brought a product to market. Sony reported last week it expects to start licensing the processor in early 2001.

"Technology moves so fast that by the time a licensed PS2 console is out the PS3 design will be on the drawing board," Kaufhold said.

Game console makers generally follow a two-year development cycle, Kaufhold said.

Sony made this move to preempt a similar announcement from one of the other two game console makers, most likely Sega, according to In-Stat. Sega is in the process creating the SegaNet ISP that would use the Dreamcast console as the home's access point. So it would behoove Sega to have as many set top boxes as possible equipped with its processor, Kaufhold said.

The problem still facing Sony is it has not announced any deals with cable or DSL suppliers.

"What good will a set top box do with the PlayStation2 built into it, if Time-Warner, Cox, or AT&T choose to not provision video game services on their cable TV systems?" Kaufhold said.

Sega has experienced some turmoil of late with the company posting a loss for the third straight year. Late last month it reported net loss of $398 million for the year and this news was followed by the resignation of its president Shoichiro Irimajiri.

Sony did not return phone calls seeking comment.

-- Additional Reporting by Steve Smith

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