Commentary: PlayStation could be Net access leader

See news story: Sony boosts chip production to fuel more game machines

By Tom Austin, Gartner Analyst

Three questions arise regarding the future use of game console devices for Internet access:

•  Will a large number of people eventually access the Internet using something other than a traditional Windows-Intel PC?

•  If that happens, will a large number of those non-PC access devices be based on PlayStation-type game console technology?

•  If so, can Sony get a large percentage of that market?

Of those three questions, the first is highly likely, the second is moderately likely, and the third depends on how Sony handles its licensing deals.

Sony can make all three more probable if it makes the right choices. If that happens, Sony has a strong shot at being an Internet access leader in what promises to be a mass-market Internet boom over the next few years.

Many companies already have plans and products for non-PC Internet access, including traditional PC makers such as Compaq Computer and IBM.

Some of those products are "thin PCs" that retain the Windows-Intel architecture or feature new hardware but retain a PC-like form factor. At the other end of the spectrum, handheld devices and cell phones have begun to offer access to a limited number of Internet sites that can deliver content to their tiny screens.

Devices based on game console technology fall in the middle of the spectrum and include a variety of Internet appliances, such as TV set-top boxes, dedicated email terminals and game consoles themselves.

Gartner predicts that by 2004, the non-PC devices will be a major force in user access to Internet-based applications and will trigger an explosion in Internet-based applications that will link customers, suppliers, consumers and business partners.

The coming boom is a significant growth opportunity for Sony. A significant number of PlayStation users already play multiplayer games on the Internet.

Licensing the PlayStation technology will not only spur an increase in Internet-based multiplayer gaming, it will trigger a flood of investments in other applications that can make use of those powerful systems. PlayStation technology can form the basis of many different types of Internet appliances, including TV set-top boxes, email terminals and stand-alone Web browsers connected in wired and wireless ways.

The set-top box arena is perhaps the most promising of those and a natural target for a company that owns a major record label as well as a Hollywood film studio.

Sony will either partner with, or end up competing with, major vendors of cable-access hardware, such as General Instrument (owned by Motorola) and Scientific-Atlanta to produce a new generation of multipurpose, Internet-accessible set-top boxes.

The set-top opportunity is not lost on Sony. It just closed a deal to produce and market TiVo's hard disk-based digital video recorder, which receives its program schedule over an Internet hookup.

However, Sony must handle those deals skillfully. If the company charges too much or imposes onerous restrictions to protect its game console market, it will inhibit rather than enable the growth in mass-access devices and lose the chance to be a technological and entrepreneurial leader.

On the other hand, if Sony is generous with its technology and creative in applying it, the company stands a good chance of becoming a major winner in the mass-market Internet era.

Entire contents, Copyright © 2000 Gartner Group, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.