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Sony Unveils PSX Console

The game unit will feature a DVD and music player and personal video recorder.

May 29, 2003|Alex Pham and P.J. Huffstutter | Times Staff Writers

Consumer electronics giant Sony Corp. unveiled an all-in-one audio and video device Wednesday in its effort to shape the future of home entertainment -- and pull itself out of a slump -- by taking advantage of its immensely popular PlayStation 2 video game console.

Called PSX, the box will combine the functions of a PS2, a DVD player and recorder, a digital music player, a television tuner and a personal video recorder that can store 60 hours of TV programming.

Sony competitors such as Microsoft Corp. are pursuing a similar strategy, assuming people want fewer, simpler and more versatile entertainment devices in their living rooms. Microsoft is adding several new functions to its Xbox game console.

"Consumers want fewer boxes that do more things because they face increasing daunting problems with hooking all this stuff up," said Larry Gerbrandt, an analyst with Kagan World Media, a consulting firm in Carmel, Calif. "That means having more things in a single box."

PSX will piggyback on one of Sony's most successful products: the PlayStation. Sony has sold more than 96 million original PlayStations and more than 50 million PS2s worldwide since introducing them in 1995 and 2000, respectively.

"Sony's going through one of the most popular sockets on the planet, and that's the PlayStation socket," said Rick Doherty, research director of consulting firm Envisioneering Group.

Sony declined to give a retail price for PSX, which will debut in Japan this year and in the United States in 2004. Doherty estimated that the machine could be profitably priced at $400; the PS2 sells for $180.

Consumer electronics companies have for years tried to find the perfect blend of functionality and simplicity, and some analysts say all-in-one boxes such as the PSX remain too complicated.

"Some of these devices are getting extraordinarily complex, especially when you add hard disk drives, which tend to break down more frequently because they have moving parts," Gerbrandt said. "Still, this is definitely the trend -- toward boxes that can serve as the home's media center."

For Sony, the PSX move is unusual: It has followed the traditional video game industry formula of waiting five years before introducing next-generation game consoles. Just two weeks ago, Sony surprised the video game industry by announcing its entry into the portable entertainment market in 2004 with a game, movie and music player the size of two decks of cards.

Sony executives have insisted that even with the PSX on the way, they still plan to introduce a more powerful PlayStation 3 sometime this decade, but they have declined to disclose any details.

The company is under intense pressure to add some immediate glitz to its portfolio of products. The PSX announcement followed last month's surprisingly weak earnings report for Sony's last fiscal year. And the company warned that the future looks equally difficult.

Sales in Sony's core electronics business dropped 6.5% in its fiscal year ended March 31. Although that business accounted for 66% of the company's overall sales, it contributed only 22% of Sony's operating income. By comparison, Sony's PlayStation business accounted for 13% of overall sales but 61% of operating income.

Wednesday's news comes on the heels of a widespread reorganization, designed in part to create stronger ties between Sony's entertainment and device businesses -- as well as stronger links between its Tokyo headquarters and the executives who run its successful North American units.

Ken Kutaragi, the controversial president and chief executive of Sony Computer Entertainment Inc. and the driving force behind PlayStation, took on the duties of corporate executive deputy president in March. That move enhanced his standing as a potential successor to Sony's corporate chief executive, Nobuyuki Idei, 65.

It also was an effort to draw Kutaragi, 52, who was given a free hand in running his PlayStation unit, back into Sony's corporate fold. In turn, the company hopes that some of the PlayStation magic will rub off onto other Sony products.

*

All in one

Sony unveiled plans for PSX, a console that would perform a number of home entertainment functions. It would:

* Play and record DVDs

* Play PlayStation video games

* Play MP3 digital music

* Act as a TV tune and personal video recorder

* Have a 120-gig hard drive

* Connect to the Internet via ethernet port

* Have a USB 2.0 port to connect to other devices

* Cost: TBA

* Debut: TBA

Source: Sony Corp.

Times staff writer Jon Healey contributed to this report.

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