Sony seeks PlayStation 2 licensees

States again its interest in Palm's business model

By Tony Smith, 14th October 2000

Magic Quadrant for Enterprise Backup/Recovery

Sony has again called for partners to help it leverage its PlayStation 2 games console as a gateway to the Internet for homes, capable of hooking up all your consumer electronics kit to the Net.

"We are seeking a way for PlayStation 2 to be used as the home gateway," Shinichi Okamoto, Sony Computer Entertainment's VP, said at the CEATEC electronics show in Tokyo. "We will work on commercialisation or will ask someone to work on commercialisation [of such kit]."

Earlier this year, Sony said it is interested in talking to companies who want to license the PlayStation 2's core technologies. "The PlayStation 2 should be opened to the outside world," Ken Kutaragi, head of Sony Computer Entertainment and widely regarded as the father of the PlayStation, told the Wall Street Journal last June. "We hope that all of our partners will start thinking about using our technology."

Okamoto's comments would appear to be a restatement of that policy.

Sony's licensing move is a canny one. For a start, it opens new revenue streams, both from technology licenses and from sales of the Emotion Engine processor that powers the PlayStation. Around the time of Kutaragi's comments to the WSJ, Sony said it was spending ¥125 billion ($1.1 billion) ramping up Emotion Engine production. That's primarily to ensure Sony has enough chips for its own machines, but it will clearly want to maintain peak production, and that means finding other buyers too.

Then there's the lesson of Palm. Sony's interest in the PDA maker goes beyond its PalmOS licence - it likes the way Palm has built up a market-dominating platform by widening the availability of its technology. Sony would like to do the same with the PlayStation 2, particularly now it's going to go head-to-head with Microsoft and X-box for the console market.

If Palm's strategy can beat Microsoft in the PDA world, it can work in the home digital entertainment arena - or so Sony clearly hopes.

Using the PlayStation 2 as a hub for Net-enabled home appliances has always been part of the gameplan, though of late it's been downplayed in favour of the console's gaming abilities. PlayStation 2 won't come into its own as a Net gateway until next year, when Sony hopes there will be sufficient broadband home Net connections out there to promote PlayStation as a complete digital entertainment - not only games but movies and music - delivery system. ®