PlayStation 2 madness hits US

Retailers opened their doors Thursday to face long lines of customers eager to get their hands on one of a limited supply of Sony's latest high-tech toy.

While most retailers sold out of the $US300 console within minutes, auction sites like EBay still have them, but at a premium. One auction had reached $US1525 at midday Thursday with two hours left to bid.

One reason for all the fuss is the PlayStation 2's appeal to a broad range of consumers. In addition to 128-bit gaming, the unit includes a hard drive expansion slot and a built-in DVD player.

And besides the 26 new titles available for PlayStation 2 at launch, you can play existing PlayStation games on the new console. Of course, that's assuming you can get one.

Promises, Promises

Sony Computer Entertainment originally planned to ship 1 million units for the US launch of PlayStation 2, says Stephanie Iwamasa, spokesperson for Sony Computer Entertainment. But component problems hampered that plan and the company shipped only 500,000 units.

Although Sony wouldn't name specific components, common circuitry is the culprit, says Rob Enderle, a vice president at Giga Information Group. The technology is used in everything from mobile phones to personal digital assistants and PCs, and it's holding up PlayStation 2 production, Enderle says.

"The PlayStation 2 is like a complex computer," Enderle says. "It has subparts which need parts and many of these are shared with other intelligent devices; shortages occur because everyone wants the parts at once."

Sony hasn't intentionally limited supply, agrees Schelley Olhava, an IDC senior analyst. But she suspects components shortages aren't the real problem.

"My feeling is that they just couldn't get the units out," Olhava says. "They're very custom units with a lot to them. Sony is bringing on new plants in Japan to try and meet demand."

Empty Shelves

Meanwhile, word got out that supplies would be short at launch, and eager consumers camped outside electronics stores to nab one of the first units.

US retail chain Best Buy tracked five of its 400 stores -- in Boston; Richmond, Virginia; Minneapolis; and Orlando and Fort Meyers, Florida. Each site averaged 50 to 100 people camped out overnight, some arriving as early as 6 p.m. Wednesday. When the stores opened at 10 a.m. Thursday, some crowds had swollen to 300 people.

Best Buy issued customers tickets as they took places in line. System sales were limited to one per person, with no rain checks. The process "went very smoothly" with no major problems, says Donna Beadle, company spokesperson.

By midday, Best Buy's PlayStation 2 supply was depleted, she says. "We tried to be fair," she says. "But some people were turned away."

Sony plans to ship 100,000 units per week to retailers through the Christmas season, Iwamasa says. By two months after the launch, some 1.3 million units will have entered the North American market, according to the company.

But patience may result in better prices, suggests everyone from analysts to retailers.

"Right now, people are paying a premium for these," Enderle says.

Next in the PlayStation 2 Saga: Got Games?

It's tough enough to get your hands on a PlayStation 2. Despite Sony's release of 26 new games with this product, the latest software may be as tough to get as the hardware.

The PlayStation 2 is a particularly complex machine, and making new games for it is a difficult task, Enderle says.

Despite that complexity, a huge number of vendors are offering new games for the launch, Iwanasa says.

"This launch library is phenomenal," she says, noting that everything from sports to role-playing games are represented. The number of games is significantly larger than was available at the launch of the original PlayStation, she says.

The original Sony PlayStation, which recently received a face-lift and now sells for $US99, has sold more than 27 million units in North America since its September 1995 launch, Iwanasa says.

Another 20 or more titles for the PlayStation 2 are expected to be available by the holidays, estimates IDC's Olhava.

The Competition Goes Online

Sony competitor Sega Electronics beat Sony to the 128-bit punch with its 1999 release of the Dreamcast console. Dreamcast lacks the DVD player expandable hard drive bay and snazzy processor that the PS2 boasts. But Sega is delivering on the promise of online connectivity by Dreamcast, with its SegaNet service, Olhava points out.

"Dreamcast has a dial-up modem built in," Olhava says. "Although it wasn't much at first, Sega now has 100,000 people signed up to play on the SegaNet service."

Although many of those people registered under free trial offers, Sega charges $US21.95 monthly for the service after the introductory period, Olhava adds. "But you can download software for your PC and use SegaNet as your full ISP service," she says.

Sony Eyes the Fast Track

Sony meanwhile, seems to have broadband connectivity in mind for PlayStation 2.

"It doesn't ship with a dial-up modem, but Sony plans to make something available, probably in the form of a hardware broadband connector," Olhava says. Sony is not yet revealing details about the cost and specifications for such a connectivity add-on.

Meanwhile, hot on the heels of PlayStation 2 will be Microsoft's X-Box, which is due for release in 2001. The X-Box is built on a Windows PC-like platform, making it easier to port PC games to the game console. PC game developers may flock to X-Box in order to reach customers who don't have access to PC games, either because don't have a PC or because their system isn't fast enough, Enderle says.

With plans to develop PlayStation 2 into everything from a home entertainment console to a broadband gateway, Sony has high hopes for its latest consumer offering. But keeping up with the enormous demand may be its biggest challenge.

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