Sony, IBM Pull Double Punch on Microsoft
By Suzanne Deffree -- EDN, May 12, 2004
Microsoft took two punches on Tuesday, one from Sony and a double hit from IBM and the consumer giant.
Following a similar move by Microsoft, Sony Computer Entertainment America Inc. has slashed prices on its video game system, hoping to keep PlayStation's market lead over Xbox.
Effective yesterday, the PlayStation 2 has been lowered to a suggested retail price of $149, a $30 dip in price. Two weeks ago, Microsoft dropped its Xbox $30 to the same price point.
But this week's news looks to keep the Xbox down. Microsoft made its price cut move hoping to up its 14 million unit sales in North America. Sony's PlayStation, meanwhile, already sells to one in every four American households, with Sony expecting the price drop to fuel consumer uptake of PlayStation 2 and further its lead.
"The consumer appetite for our system has been staggering -- over 90 percent of our original PlayStation sales came at $149 or less, and given our current 25 million installed base, the potential growth for PlayStation 2 is promising," said Jack Tretton, executive VP, Sony Computer Entertainment America, in a statement.
The move could be further good news for IBM. IBM chips landed a deal with Sony last year for future devices. That deal's possibilities -- now boosted further with expected increases in PlayStation's demand -- are said to be enough to help IBM fulfill rumors of an expansion to its 300mm fab in upstate New York.
Meanwhile, IBM Tuesday served its own news to Microsoft, making announcements on its Cell technology that has been rumored to be a central focus of PlayStation 3, expected in 2006.
"Cell" is the code-name for an advanced microprocessor under development by Sony, IBM and Toshiba. The technology uses massive data bandwidth and floating point capabilities, coupled with a parallel processing architecture, to deliver what IBM said will be a "quantum-leap innovation to entertainment applications."
Through a deal with Sony, IBM said that it plans to develop a digital content creation environment, the first computing application planned for the Cell processor, with the first prototype Cell-based workstations in Q4.
IBM intends to develop the Cell-based workstations to power digital content creation, while Sony will lead the development of the Cell-based operating environment by providing the architecture, algorithms, middleware and data structure for tools needed to create digital content for movies and computer entertainment applications.
No further production details on Cell were given.
