JIN-275 -- Sony's Super Cell

J@pan Inc Magazine Presents:

T H E J @ P A N I N C N E W S L E T T E R

Commentary on the Week's Business, Technology and Cultural News
Issue No. 275
Thursday, June 3, 2004

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@@ VIEWPOINT: Sony's Super Cell

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@@ VIEWPOINT: Sony's Super Cell

Sony has thrown nearly 2 billion dollars into a revolutionary processing
chip that it hopes will transform the face of home entertainment.

Its first role will be as the central processing unit in the PlayStation3
games console -- a machine that we recently learned is slated for release
in early 2006, though Sony is being awfully coy about confirming it. The
hugely powerful chip will eventually be fitted into TV sets and a host
of other consumer electronics devices.

Ken Kutaragi, the brains behind the PlayStation games consoles, believes
that the chip -- codenamed "cell" -- will give future video games machines
the power to animate figures as realistically and smoothly as Golem in the
Lord of the Rings, or the CGI hero in the recent film version of The Hulk.

The chip, he said, means that within a few years the genres of film and
video games will "fused and become indistinguishable."

That strategy is based on trends in the games industry that became
startlingly obvious at the recent E3 videogames trade show. Dominating the
games market is the US company Electronic Arts -- a company that has
achieved its lead by concentrating on generating ultra realistic-looking
games based on films and sports. It is also clear that the cell is being
groomed for some future era where most homes have broadband internet
connections. Its designers believe it will be perfect for managing the
sort of vast online role-playing games that are already starting to
draw armies of addicts.

But here comes the clever bit. Within the next six months, Sony will be
offering video games makers a cell-workstation that will let them start
programming software using the new chip. Behind Sony's strategy is the
theory that by delivering all that graphics power, the process of animating
games characters will be dramatically shortened. Games are far more
complicated than they used to be, and anything that reduces the average
3.5-year development time of each game is, commercially, very attractive
to the industry.

IBM shares the Sony prediction that the chip could become the start of
a revolution that unites the PC, the games console and broadband
entertainment-on-demand services -- and puts it all inside your TV.
"The PC is no longer the driving force in semiconductor innovation,"
said IBM technology director John Kelly, "networking and consumer
electronics applications are driving the evolution of a new
semiconductor industry."

The entire videogame industry has been waiting on tenterhooks for the
end of an extended game of "chicken" between Sony and Microsoft,
producer of the rival Xbox console. Microsoft attributes the limited
success of its first machine to the 18-month headstart it lost to the
PlayStation2, and some pundits speculate that the US company will do
everything in its power to put its Xbox2 machine on the shelves first.
Others believe that both companies see an advantage in holding back a
release and then undercutting their rival on price.

But Sony's ambitions for the chip do not stop with the next-generation
games console, and the Japanese company has already put its plans for a
cell-dominated world into action. In addition to aiming the cell
workstation at games programmers, it will also be pushing it towards
Hollywood studios and filmmakers everywhere, betting that the future
of cinema lies in the increasing use of computer-generated characters
and special effects.

Analysts have remarked on the coincidence that Sony is also currently
pursuing a possible takeover of US film studio Metro-Goldwyn
Meyer, speculating that the Japanese group is engineering a scenario in
which it controls both the hardware and content of cell-enabled TVs.

-- The Editors

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======== Entrepreneur's Handbook Seminar =======
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Time/date: 10:30am, June 26th, 2004
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Price: 15,000 yen prepaid, 20,000 at the door
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Written and edited by Roland Kelts and
Leo Lewis (editors@japaninc.com)


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