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The Honolulu Advertiser
Posted on: Wednesday, May 16, 2001

AOL, Sony to offer PlayStation service

By Leslie Gornstein
Associated Press Business Writer

LOS ANGELES — Sony Computer Entertainment is teaming with America Online to offer high-speed Internet access, hoping the deal gives Sony's PlayStation 2 an edge over rival consoles by Microsoft and Nintendo.

The Sony PlayStation 2 console and controle unit were announced eight months ago.

Associated Press

Using accessories expected to debut in December, the 3 million PlayStation 2 owners in North America will be able to chat electronically and exchange instant messages and e-mails with other players, executives at both companies said.

"If you are playing a strategy or mission-based game and you need to chat strategy with your teammates, you can do that," said Kazuo Hirai, president of Sony Computer Entertainment America, based in Foster City, Calif.

AOL and Sony executives said the companies will host demonstrations of their joint technology this week during the Electronic Entertainment Expo in Los Angeles. Neither company would disclose the financial arrangements of the deal.

In doing so, they hope to trump major rivals Microsoft and Nintendo, which will offer their own game boxes in time for the holidays.

Introduced in October, the PlayStation 2 will battle for holiday dollars with Microsoft's Xbox and Nintendo's GameCube, both due out later this year.

Nintendo's new GameCube is due for release later this year.

Associated Press

Online access is expected to play a major part in that console war, analysts said. And the stakes are high: Computer and video games now represent a $10.5 billion industry that eventually could rival the market for movies, according to a trade organization study.

The Xbox is expected to ship with Internet access built in. Nintendo's GameCube is expected to ship with adapters that will work with a 56k modem or a broadband connection.

PlayStation 2 customers will have to buy a modem to get the AOL service. The Sony-AOL arrangement doesn't limit AOL from dealing with other console makers and also will allow players to use the AOL-owned Netscape Web browser on the PlayStation 2.

Competitors highlighted that difference when asked about the Sony announcement Monday.

"With PS2, consumers are going to be asked to purchase a hard drive separately and an adapter separately, and video gamers just don't go out and buy this stuff in mass quantities," said David Hufford, a marketing manager at Microsoft.

He also criticized Sony's focus on typed communication, saying the future of video gaming lies in voice communication over high-speed networks.

Xbox users should not expect full-service Internet access until 2002, Hufford said.

Microsoft's new Xbox console and control units are also exptected to be released later this year.

Associated Press

AOL and Sony also are releasing their technology to game developers, who are expected to design new titles around the software. For instance, a war game might use AOL chat technology to allow players to taunt each other as they do virtual battle.

The resulting games will be crucial in determining whether the strategic partnership pays off, said analyst P.J. McNealy of Dataquest, a technology research company.

"Just because Internet browsing capability is tied into the PlayStation 2 — that doesn't make it a killer (application)," McNealy said. "What will do it is great multiplayer games."

The deal also holds critical value to AOL, which is trying to increase its customer base of 29 million.

"This is the first instance of the 'AOL Anywhere' strategy of providing compelling content on as many devices as possible," said Peter Ashkin, president of product strategy at AOL, which is based in Dulles, Va.

Sony in December plans to release a new hard drive, network adapter, liquid crystal display, mouse and keyboard for PlayStation 2 that can be used to run AOL. A price for the items and for the Internet service has not been set, Hirai said.