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Sony quietly makes plans for PlayStation 2 hard drive

Seagate Technology lands the contract to become the main provider of hard drives for the PlayStation 2, which is looking more and more like a computer every day.

Seagate Technology has landed the contract to become the primary provider of hard drives for Sony's PlayStation 2 game console, which is looking more and more like a computer every day.

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Sneak peek at Xbox
Billy Pidgeon, gaming analyst, Jupiter
Seagate, one of the leaders in manufacturing hard drives for computers, will make two types of hard drives for PlayStation 2, according to sources.

One will be an external hard drive that connects through an open slot in the game console. Another will come in an "internal housing," sources said, which seemingly indicates the drive will be incorporated into the console's body in some future models.

The PS2 was released in the United States in late October. The U.S. version contains an open slot for hard drives and other hardware, but no hard drives have hit the market yet.

With a ready supply of hard drives, Sony will be able to market the system as a vault for MP3 files, digital photos and data-intensive media content--functions currently performed by PCs.

"Good for Seagate," chimed Schelley Olhava, an analyst at IDC.

Sony, which did not immediately return phone calls, has been relatively vague about when add-on hard drives will become available or who will build them. In addition, whether Sony will offer an internal, or built-in, hard drive in some future models has been an open question.

Although Scotts Valley, Calif.-based Seagate will be the primary hard-drive supplier, the contract is not exclusive, said sources. Interestingly, Seagate will supply drives for Microsoft's upcoming Xbox game console.

Meanwhile, communications chipmaker Conexant Systems announced Friday that it has landed the contract to provide chips that will let manufacturers ship PlayStation 2 modems. Capcom, Enix, Konami and other game developers said they are planning Internet-enabled versions of their games compatible with chips from Newport Beach, Calif.-based Conexant.

Ambidextrous entertainment hub
The two deals push forward an underlying strategic ambition at Sony: to transform the PlayStation 2 into an ambidextrous entertainment hub for the living room. Currently, most consumers are buying the system to play games. But because it includes a DVD player, some consumers, especially those in Japan, are using the system to watch movies.

The console could also be used as a pay-per-view gateway for films and TV programs. So what does this have to do with competition with the PC market? Hewlett-Packard's Superdrive, a DVD recorder coming in 2001, will likely perform this function. Gateway and Broadcom are tinkering with video delivery systems.

It is over these applications that Sony and the PC makers could find themselves competing more directly against one another for the hearts of consumers. Usage patterns have yet to be established. By contrast, consumers don't appear to be inclined to migrate from the PC to a console when it comes to Web browsing.

"We know the gamers don't want to use the console as a PC substitute," Olhava said, "The TV is not the most optimal platform for Internet stuff." The game console's Net connection will mostly be used to play games or download game information, which, however, could stoke competition for interactive games.

Although it is still unclear when the first PS2 hard drives will emerge, modems are just around the corner.

Camdus Micro, I-O Data and others have agreed to adopt Conexant's SmartSCM V.90 chipsets for their modems, which should start coming out in the first quarter, said Conexant.

"Internet connectivity is a key value-added feature for PlayStation 2 users, who are looking not only for the ultimate gaming console but also a complete computer entertainment system," said Matt Rhodes, senior vice president and general manager of Conexant's personal computing division.

Seagate representatives declined to comment on the deal, which has yet to be announced.

News.com's David Becker contributed to this report.