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To: Tony Viola who wrote (17315)	3/6/1999 9:22:00 AM
From: E. Graphs	Read Replies (2) \| Respond to of 25814

Is Sony a poser?!....negative spin on PlayStation 11 Sony's Stealthy Shot against Sega in the Video-Game Wars Left behind in the race for a knockout 128-bit console, Sony "announces" one of its own. Someday, it will exist businessweek.com >>...The event had all the marks of a rushed technology announcement. (If this were software, the word "vaporware" might spring to mind.) There was no real hardware prototype on display, although the crowd did get treated to some very slick 3D graphics. Nonetheless, Sony's event was a brilliant ploy to divert video-game fans away from Dreamcast, which has won high marks with players for its flowing, graceful graphics. Indeed, some American news media dutifully reported the Sony announcement as a "product introduction." >>At this juncture, the threat Sony faces is real: By the end of March, in Japan alone, Sega expects to sell 1 million units of its Dreamcast machine, which also processes data in 128-bit chunks. In September, Sega hopes to launch the console in the U.S. That would be a disaster, from Sony's perspective. Hence the hasty announcement of PlayStation II, or "PS2" -- as the technology platform has long been code-named. >>"KICK-ASS MACHINE." Despite Sega's lead, Sony struck an upbeat pose at the Tokyo press event, which did offer several important surprises. "Our new console will be completely backward-compatible, meaning that it'll be possible to play the old games," announced PlayStation creator Ken Kutaragi, vice-president of the game unit Sony Computer Entertainment Inc. "So we think that will encourage sales of both [Sony] hardware and software in the interim." >>It's a big risk, even for a consumer electronics giant with $56 billion in sales. Sony expects to spend about $170 million on a new graphics chip, as well as a microprocessor, dubbed the Emotion Engine, that it's co-developing with Toshiba Corp. Altogether, development costs are expected to soar to $500 million, which includes outlays for technical tools to attract software developers to the platform. What's more, despite the theme of "backwards compatibility" Sony will almost certainly suffer a decline in sales of its current, PlayStation, which so far has sold 50 million units since its 1994 debut. The new device "is a kick-ass machine," says game industry analyst Lisa Spicer, with WestLB Securities in Tokyo. "But profit-wise, it's a negative for Sony." ...<<