FOSTER CITY, Calif. -- Gaming consoles have historically faded from popularity after three years. The makers of the Sony PlayStation, which first appeared in September 1995, are determined to break that trend.
Sony Computer Entertainment America plans to introduce about 100 cutting edge games and a new, handheld PocketStation later this year in an attempt to solidify its hold in the United States, where one out of every six homes has a PlayStation.But serious competition awaits.
"In the video-game industry, the bar clearly has been raised," said Kazuo Hirai, chief operating officer of the Foster City-based Sony Computer Entertainment and the person who is widely credited with the introduction and success of the Sony PlayStation.
Hirai said that huge holiday PlayStation sales -- more than 4 million were purchased in the last two months -- has created a latent demand for software in the marketplace right now. He's planning to meet it.
"Through blockbuster titles for a mainstream audience and a vast array of games suited for niche audiences, we are focusing on the console as the entertainment medium," he said in remarks prepared for analysts at the American International Toy Fair in New York Monday.
"As we have done all along, we will continue to increase the value within the life cycle of the PlayStation by increasing the level of entertainment we bring to consumers.
Since their introduction 3 1/2 years ago, PlayStations have enjoyed unprecedented success. They make up more than two-thirds of the game console market, with more than 50 million consoles worldwide. By the end of this year, owners will have more than 600 titles to choose from, ranging from cute and cuddly kiddie games to ominous shoot-em-up adult killing fantasies.
The fastest selling product in Sony's 50-year history, PlayStations have been trouncing their closest competition, Nintendo of America, which came out with the more powerful Nintendo 64 in 1996. Last year, consumers bought twice as many PlayStations as Nintendo 64s as prices on both dropped to $129.
"Basically, Sony has been able to develop the leadership role in the game console market through its success in attracting top developers and franchises," said Kevin Hause, an industry analyst with International Data Corp.
"Sony has also benefited from its corporate expertise in branding and marketing, which has made not only the PlayStation a success, but also the Walkman and many other products," he said.
University of California, Santa Cruz senior Christine Candelaria was one of millions of Americans to find a PlayStation under her Christmas tree.
"It may be the greatest thing that ever happened to me. It's amazing, it's crazy, I'm totally addicted," said Candelaria, a longtime gameplayer. Industry research shows that the reason consumers pick the less powerful 32-bit PlayStations over the 64-bit Nintendo consoles is because they have almost ten times has many games to choose from. PlayStation games, starting at $20, cost about half that of Nintendo 64.
But analysts say 1999 is going to be tough for Sony. Nintendo is bringing out an array of new sports titles to appeal to adult players who have been opting for PlayStations.
And in November, Sega Enterprises Ltd. and Microsoft Corp. will launch the Dreamcast system with a 128-bit processor in the United States.
"PlayStation has been a tremendous achievement for Sony, but I think they're pretty close to the peak of their cycle," said Jeremy Schwartz, senior analyst at Forrester Research Inc. in Cambridge, Mass. "They've enjoyed a combination of good graphics, good sounds, low price and for its time it had reasonable performance. That could change."
This year Sony Computer Entertainment America will introduce the PocketStation, a handheld extension of the console. Hirai said he hopes the PocketStation, launched in Japan last month, will bring even more PlayStation users. The company has also said it is developing an updated PlayStation, although no release date has been set.
"We started in an interesting position: we were both David and Goliath; the industry newcomer and the corporate giant," said Hirai. "In just three years, Sony Computer Entertainment America climbed from underdog to top dog."