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RealNetworks finds home in PlayStation 2

RealNetworks' audio and video software will be included in Sony's gaming system, as the two companies prepare for increased competition from Microsoft.

Sony and RealNetworks will announce Wednesday that they will be teaming to bring streaming audio and video to Sony's PlayStation 2 gaming system.

At the Electronic Entertainment Expo (E3) gaming conference in Los Angeles, the two companies will announce a nonexclusive partnership.

"This is a nonexclusive partnership with Sony to get RealNetworks technology built into PlayStation 2," said RealNetworks spokesman Joe Cerrell. "This is a huge win that shows we're delivering on our commitment to get RealNetworks technology off of the PC and onto other platforms."

For Sony the alliance is a pre-emptive strike against Microsoft and its upcoming Xbox gaming system. For RealNetworks the agreement is another part of its beyond-the-PC strategy, in which the company is trying to embed its software in devices other than PCs.

Sony will include RealNetworks' RealPlayer and RealJukebox software on hard drives that can be added to PlayStation 2 consoles. The drives are available in Japan and are expected to hit the United States this year.

To aid developers in the creation of applications using RealNetworks' software, Sony will include RealNetworks' software developer tools with its own software development kit.

According to Jai Jaisimha, a director of consumer appliances at RealNetworks, consumers will be able to view video on demand, download music to be played off the PlayStation 2, and use the console as an Internet radio.

RealNetworks' software will be added to the drives in the fall, and applications will be available in the months that follow, according to Jaisimha.

Sony has shipped more than 10 million PlayStation 2 units worldwide since the console's Japanese introduction in March of last year.

"The PlayStation 2 is

Gartner analyst Robert Batchelder says that given Microsoft's ambitions to be both a media and a game company, it's clear why Sony would choose RealNetworks to bring streaming audio and video to its PlayStation 2.

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already out there in broad use," said Jaisimha, "and this will only help to fuel our beyond-the-PC strategy."

The PlayStation 2's lead rival, Microsoft's Xbox, has not even hit store shelves, but news of its official ship date and pricing are expected this week at E3. Analysts expect the pricing to be in the $300 range to remain competitive with the PlayStation 2.

With the muscle of software behemoth Microsoft behind it, as well as a $500 million marketing budget, the Xbox is expected to make a big splash.

RealNetworks also counts Microsoft as a competitor in the media player arena on the PC.

Both Sony and Microsoft view their gaming systems as entertainment hubs of the future home enabling more than just games, also allowing owners to surf the Web, play online games, and gather news and information.

On Tuesday, AOL Time Warner and Sony announced they will work together to combine AOL Internet features such as instant messaging, chat and e-mail with the PlayStation 2. Sony will provide the network adapter for PlayStation 2 that will let consumers access AOL Internet features and play Net-enabled games.

The RealPlayer will be included in Nokia's upcoming Media Terminal, which will be released in the United States early next year. The Media Terminal is an Internet appliance, and the RealPlayer will allow the device to stream video.