After arriving in San Francisco and getting to the hotel where we were staying, Emily and myself ran over to the Thirsty Bear for a welcome party Sony was throwing. When we got there, a lot of folks had already left so we almost decided to leave. However, we ran into Daniel Monk Pelfrey a former writer for us at CVGames. We have stayed in touch after he left and he has now started up his own web site–Digital Entertainment News. As the welcome party came to an end, we went all went back to the hotel.

The next day, Sony had us register and we were fed a wonderful breakfast buffet before the morning press conference. Thankfully this year they had plenty of tables and chairs so only a few had to stand up. Last year, I was one of many journalists who had to stand up during the hour and fifteen minute press conference.

Here, Sony does what they always do–let the numbers speak for themselves. What do these numbers say? Quite simply, Sony is completely dominating the industry. But lets take a moment to look at them in a little more detail:

In 2002, the Video Game industry pulled in an astounding 10.3 Billion dollars. The Hollywood box office only pulled in 9.5 billion and DVD & VHS rentals combined only accounted for 8.2 Billion dollars. The only consumer entertainment medium that brings in more cash each year is the Music industry, which pulls in 12.6 Billion dollars, and DVD & VHS sales–that bring in 12.1 billion combined.

This brings up an interesting question. Why is RIAA suing individuals and claiming that P2P is causing them to lose money? The Music industry is the leading consumer entertainment group! How about they acknowledge that people want to be able to choose what songs they buy at a store instead of being forced to pay $17.99 or more per disk. But I digress.

In 2002, Video Game consoles can be found in forty-five percent of households in the US. This accounts for sixty percent of Americans, ages six or older, play video games in the US. That means around 145 million people play video games. And these consumers purchased over 221 million games or about two per household.

You can see from the details how large the gaming industry is. And since the release of the original PSX, Sony has dominated this growing market. This domination continues now in the PS2 generation of hardware with Sony holding a 65% hardware market share–compared to a twenty percent for Xbox and a fifteen percent for the GameCube.

This domination on hardware continues to drive software sales for Sony. But an even more impressive number is that Sony has almost sold a hundred million PSone consoles worldwide and nearly one billion pieces of software on the original system!

Last year, Sony launched the network adapter for the PS2. They are approaching a million registered users and should be well past that figure by the end of the year. They are at 850,000 right now. Both broadband and dial-up users are going online too. Since the PS2 is the only system actively recruiter both sets of users, Sony has seen about fifty-eight percent of their registered users use broadband compared to forty-two percent use dial-up accounts.

As broadband is available to more consumers and as prices go down, GartnerG2 projects by 2007 that thirty eight percent of US households will have broadband in their houses. This is compared to the twenty-two percent percent that are projected to have it in their homes by the end of 2003. GartnerG2 also projects that dial-up users will drop from the projected thirty-seven percent in 2003 to twenty-six percent in 2007. I wonder if anyone at Microsoft is second guessing their plans to push a broadband only solution for the Xbox so soon?

Okay, so we see the figures. But do people have a reason to get their PS2 online? Yes, they do. Sony is now offering a $199.99 package that comes with the PS2 console, a controller, ATV Offroad Fury 2, and the Network Adapter. They will continue to offer the standalone system for $179.99. In addition to this, Sony will release their much anticipated 40 GB Hard Disk Drive (HDD) in March of 2004. This will allow users to save games, copy music and play custom playlists in supported games (like Xbox offers), show digital pictures on their TV, and much more. Sony will include Final Fantasy XI preinstalled on the drive and users can sign up with Square Enix’s PlayOnline service free for a month. After this, users can continue playing the game for $12.95 a month. There will be some other things included on the drive but Sony was not ready to discuss those details yet. Expect an announcement from them around January on this.

The PS2 HDD is very easy to install–much like the Network Adapter, and will also allow users to download content from supported games and save it on the hard drive. Sony wasn’t specific on what will be available, however, they promised something very special for Syphon Filter The Omega Strain and SOCOM 2 in March–when the HDD is released.

Sony and Third Party publishers will now be able to offer players several options to keep their games fresh. Publishers can choose to give free updates, subscription based models, and pay per download plans. Again, Sony wasn’t specific on details, but said that there are publishers pursuing each of these options.

If you were wondering, Final Fantasy XI will not be sold separately at retail. It will only be included on the HDD. While some people may not wish to play and delete it from the HDD, Sony wasn’t real clear on how they could reinstall it later. They will probably include some sort of restore disks that will allow users to install it again. This game marks the second time a franchise will charge a monthly subscription for a MMOG on the PS2. But if Final Fantasy can’t draw PS2 gamers to pay to play, I doubt anything else will.

Sony also released a little information about the PSP. However, they would not be specific about anything except for the following:

  • The unit will come with a rechargeable battery. However, there was no promise on the battery life or if users would be able to purchase additional batteries and change them out.
  • The unit will have 802.11 wireless Internet available to it. However, Sony is still not sure if that will be 802.11A, 802.11B, or 802.11G.
  • The PSP is going to be able to play music using their ATRAC format seen on their MiniDisc players. They are still discussing if the unit will support the MP3 format. In the US, people will be very upset if Sony doesn’t include this feature.
  • The PSP will be able to play back music and movies on their UMD discs that holds three times the capacity of a normal CD. The disk appears to be in some sort of MiniDisk shell and are about the same size of the GameCube.
  • Sony is pushing this new UMD format very hard and are planning it to become the next CD. With this new technology, piracy may become a thing of the past because these disks are going to be virtually impossible to copy. Sony is hoping that the RIAA and Video Industry will consider this format.
  • The PSP will be able to connect to other PSP units via the 802.11 wireless connection in the unit and via USB 2.0 cable from two units. Sony also talked about using USB 2.0 to connect to PC’s and the PS2.
  • The PSP will have a headphones port. Nintendo, are you listening? Why the heck couldn’t you give us this on the GBA SP?
  • The PSP will have a TFT wide-screen that uses either a backlight or frontlight solution. In addition, Sony said that all normal PS2 buttons will be included on the system with one analog stick. Just how they are going to fit all of this on a handheld remains to be seen.
  • While we got some details on the PSP, I was hoping for a bit more. However, Sony is hard at work in finalizing all the features and will debut the system to the world at E3. But this brings up another question. How will Nintendo respond? Could we see their next system being a handheld GameCube? While I doubt this, it is a possibility. With the power of the PSP comparing to and possibly beyond the PS2, Nintendo may have to do this to keep up. Another question to consider to ponder about is the future of Nokia’s N-Gage. Is this system dead before it even launches? The $299.99 price point seems to indicate a yes.

    While some questions were answered, I can’t wait to hear more details on what will be on the HDD and to finally see the PSP in person. I guess we will just have to wait a few more months to discover the answers to our questions.

    By Kaleb Rutherford – 09/18/03

    Screenshots for SCEA Gamers’ Day 2003 Diary Part 3