| BUSINESSWEEK ONLINE : JANUARY 10, 2000 ISSUE | ||||||||
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| INDUSTRY OUTLOOK 2000 -- INFORMATION
Meet the General Leading Sony's Video-Game Assault You'd think Ken Kutaragi, president of Sony Computer Entertainment Inc., would take it easy and indulge in a favorite pastime -- playing video games. He deserves a break: The PlayStation business he built from scratch is now the Sony Group's biggest cash cow. In the six months of fiscal 1999, ending on Sept. 30, his subsidiary earned almost as much in operating profits as Sony's entire electronics operation, which is 10 times larger in terms of sales. And Sony Computer now rules Game Land, having sold 70 million units worldwide, an industry record, since PlayStation's launch five years ago. But Kutaragi is busier than ever. In the months ahead, he'll be taking the wraps off the new PlayStation 2, a 128-bit machine that boasts mesmerizing graphics and can play DVD-based games and movies. "The first PlayStation succeeded in every way possible," says the 49-year-old computer engineer. "Now, I want to repeat it with PS2 and other sequels." Kutaragi harbors lofty goals. In the years to come, he hopes to position PS2 in living rooms in Asia, North America, and Europe as the digital hub for downloading games, movies, and music sent over broadband networks such as cable. If he succeeds, Sony could emerge as a dominant force in the unfolding world of digital, on-demand entertainment. DREAMCAST NIGHTMARE? Yet its supremacy is hardly a done deal. First, Sony has to fight off Japanese rivals like Sega Enterprises Ltd., which around the world has sold some 3 million units of its Dreamcast, a 128-bit game console capable of delivering near-arcade-quality graphics. Like Sony, Sega envisions a world of multiplayer online games where people will be able to indulge in Matrix-like entertainment. And you can be sure that Nintendo, the company that has given the world Game Boy and Pokemon games, is building its own demolition machine. It has already dropped plenty of hints about its so-called Dolphin project, which analysts believe is aimed at developing a 256-bit machine for 2001. However, Sony could face its most formidable challengers not in Japan but in the U.S. Microsoft is said to be drawing up plans for its own game console and online service in hopes of establishing itself as a hub for deliving digital home entertainment. Kutaragi says he's not concerned. "It's not a case of one company emerging as the sole winner," he says. "We can compliment one another as we create a huge market." SWEET REVENGE. Outspoken and highly creative, Kutaragi isn't your typical manager. He'd probably still be tinkering away in a Sony lab if hadn't been for Nintendo. Back in the late 1980s, he was working on a 32-bit game machine with a CD-ROM drive for Nintendo, then a Sony client and the game industry's titan. When Nintendo suddenly pulled out of the project, a determined Kutaragi convinced senior managers to back his plan to launch the machine and plunge Sony into the unpredictable world of video games. The gamble paid off royally. Today, Kutaragi is one of Sony's top executives, helping President Nobuyuki Idei devise a strategy for the Internet Age. Who know? He may even end up running the entire show. Whatever course his career takes, you can be sure there won't be much time for video games. By Irene M. Kunii in Tokyo _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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