Sony Set to Launch PlayStation 2

Sony May Overlook Opportunities

Ironically, Sony itself may hamper the PlayStation's moves on the PC. The game console group operates separately from Sony's PC group, which makes VAIO notebooks and desktops.

If the PlayStation and VAIO groups worked together, they could wield close to a knock-out punch, Enderle contends.

For example, if Sony PCs--and only Sony PCs--could also play PlayStation games, the result could be a huge boon for both divisions, he says.

Sony could even "buy Bleem and put it on their PCs," Enderle says, citing a company that sells emulation software that runs original PlayStation games on a PC. Sony is suing Bleem (see "Put PlayStation on a PC").

But Sony's PlayStation and PC business units, which are physically near each other in Japan, continue to work separately. This leaves the PlayStation 2 more vulnerable to competition from other new console systems, such as one from Microsoft.

Microsoft's Challenge

Microsoft's game platform, expected to ship by midyear, will let you play PC games on your TV, Enderle says. The unnamed system--commonly referred to as the Xbox--will cost about $200.

PC game-makers must add a small operating system on their discs for them to run in Microsoft's player. But once developers routinely add this tiny application to their CD-ROMs, packages will appeal to both console and PC game players, he says.

Enderle expects PlayStation 2 will offer more computing power than the Microsoft box.

Despite its PC-like functions, PlayStation's price tag could cast its role. When full-fledged PCs can be had for about $500, would you really pick up a PlayStation 2 for Web-surfing?

Yet, price is volatile. Enderle expects the PlayStation 2 will drop to $199 by year end. Then, the PlayStation 2 versus PC battle "gets more interesting," and the Trojan horse could have a strategic edge.