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News > Technology
PlayStation 2 on 1/23?
August 13, 1999: 7:29 p.m. ET

Merrill Lynch report points to launch in early 2000 for next-generation console
By Staff Writer Chris Morris
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NEW YORK (CNNfn) - Sony won't officially announce the release date or price of its next generation PlayStation machine for at least a month, but a new analyst report is making some very specific predictions.
     Merrill Lynch says it expects the PlayStation 2 to launch in Japan on Jan. 23, 2000, with a retail list price of 45,000 yen (approximately $390). The U.S. launch, according to the report, would be in September or October of the same year.
     Sony executives won't confirm the report, but they did acknowledge that the dates were in line with earlier announcements by the Japanese electronics giant. The information "certainly didn't come from us," said Phil Harrison, vice president of third party relations and research and development for Sony. "We'll be making our major announcements at the Tokyo Game Show in September."
     The Merrill Lynch report further forecasts a hefty price for games for the PlayStation 2, estimating an average cost of $69. That's substantially higher than current titles for the existing PlayStation, which average around $40. The report predicts the console will have 10 titles coinciding with its launch: three or four new ones, along with six or seven updated versions of existing PlayStation I software.
    
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     Sony has kept a relatively low profile for its next generation machine since the initial announcement on March 2. Even at the Electronic Entertainment Expo, the trade show of the computer and video gaming industries, the company did little to promote the machine, choosing instead to focus on upcoming titles for the current PlayStation.
     Analysts and select media were given private demos of the machine in its infancy, but most show guests saw nothing more than game footage that was released in March.
     The next big splash for the machine comes Sept. 17 at the Tokyo Game Show. It is there that Sony will unveil actual game footage from the machine, as well as a list of some of the titles that will accompany the console to retail. Harrison said the launch plan will be discussed at that time and he expects the release date -- and perhaps the retail price -- to be officially announced as well. However, he added, such decisions are made at the company's corporate offices in Japan.
    
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     The Merrill Lynch report calls for an initial shipment of 400,000 units, a relatively small number. By the end of Sony's third quarter, though, it expects the company to have shipped 1 million of the consoles. The introduction of such a massive new product will result in a short-term financial loss for the gaming division, normally one of Sony's strongest units.
     However, as production of the console becomes less expensive and more software titles are released (Sony gets a percentage of each sale), Merrill Lynch expects the PlayStation 2 business to achieve profitability within a year of its launch.
     The competition in the console gaming industry is about to enter a fevered level. Sega is scheduled to release its Dreamcast console on Sept. 9 and Nintendo has announced plans to release its own next-generation machine worldwide by the end of 2000. The PlayStation is the 500 lb. gorilla of the console gaming industry, though. And the machine's graphics capability, shown at the console's launch announcement, has had industry observers buzzing. Many have likened it to the quality of animation in the Disney film "Toy Story."
    

     Sega has proven there is tremendous demand for next generation consoles, however. The company has already surpassed its goal of pre-selling 200,000 units of the $199 console in the U.S., with a month still to go before the Dreamcast launches. And the company's $100 million marketing campaign has stirred Internet gaming chatter.
     The good numbers weren't enough to ensure stability in Sega's head offices, however. Bernard Stolar, the company's chairman and CEO, abruptly parted ways on Aug. 11. Neither party has talked publicly about the reasons for the split.Back to top

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.