The Wall Street Journal Monday, April 24, 1995 Page A2 ---------- HIGHLIGHTS ---------- - The PlayStation will be introduced to the U.S. market "early this fall" The cost will be "well under $400," according to Sony. Kmart, WalMart and Toys "R" Us are expected to sell the PlayStation. - Sony will market the PlayStation as "better-priced system" than the Sega Saturn. - Mortal Kombat III will come out this October for the SNES, Genesis, handhelds, IBM PC and PlayStation. The Sony has exclusive next generation system rights to MKIII for six months. In other words, the PlayStation has a six month head start on sales of MKIII over the Saturn and Ultra 64. - Sony will no longer make games for the SNES and Genesis. - 700,000 PlayStations have been sold in Japan. - Sony Imagesoft and Psygnosis will probably be merged into a new division: Sony Interactive Entertainment. - Sony's future CD-ROMS for the PC will be ports of PlayStation games. Table included in the article: ------------------------------- U.S. Video Game Market for 1994 ------------------------------- Sales, in millions of dollars; units, in millions Game Retail Hardware Retail Hardware Wholesale Wholesale Software Sales Number of Units Software Sales # of Units Sega $892 8.1 $1,800 49.8 Nintendo $554 7.8 $1,500 42.4 3DO $84 0.2 43 1.2 Atari $50 0.3 35 1.5 Source: Lee S. Isgur at Jeffries & Co. ------- Sony Is Dropping Output of Video Games For Rivals to Focus on Its Own System by Jeffrey A. Trachtenberg, Staff Reporter of The Wall Street Journal Sony Corp., in a bid to establish itself as one of the world's premier videogame makets and hardware suppliers, is dropping its production of games for competitors like Sega and Nintendo to focus on its own new PlayStation game system. "We're now betting everything on the PlayStation," said Olaf Olafsson, president of Sony Electronic Publishing, which oversees Sony's software operations. "This was our intention from the very beginning, but it took us time to build a business." Sony introduced its PlayStation in December in Tokyo and will roll it out early this fall in the U.S. The PlayStation is a latecomer to a business already dominated by Japanese companies Sega Enterprises Ltd. and Nintendo Co. But the PlayStaion has won rave reviews and sold an impressive 700,000 units in Japan, and many industry experts say they think Sony has a good shot at success in the U.S. market as well. Second Loss Sony's move, which includes a sweeping reorganization of its software business, follows on the heels of Sony Electronic Publishing's second loss since it was created in 1991. Sony didn't disclose the size of the loss. One division, Sony Imagesoft, last year dedicated most of its efforts to making titles for the Sega CD game format, including "Mickey Mania" and "Jeopardy" while another unit, Psygnosis, made titles for 16-bit video games and numerous CD-ROM games. Those categories were weaker than expected. Mr. Olafsson's division, Sony Electronic Publishing, is expected to merge the Sony Imagesoft and Psygnosis divisions into a new entity called Sony Interactive Entertainment. Sony Interactive in the U.S. will likely be headed by Kelly Flock, the current president of Sony Imagesoft. As part of the reorganization, Sony will shaply curtail its creation of CD-ROM titles, the games that play on home computers rather than dedicated videogame systems. Although Sony Electronic Publishing had some success with "The Haldemann Diaries," its other CD-ROM titles were less well received, including one on earthquakes that was narrated by newsman Ted Koppel. Sony's future CD-ROMS will be game titles modeled after those games that prove succeessful on the PlayStation format. The PlayStation will come on the U.S. market just as its competitors are introducing more powerful game machines. Sega, for example, is launching the debut Sega Saturn, and Nintendo is expected to debut the Ultra 64 later this year. But Sony will pitch its system to consumers as a better-priced system than Sega, with more exciting graphics and sound, and a strong lineup of games. Among its first titles will be "Mortal Kombat III," the much-anticipated successor to the first two "Mortal Kombat" games, both of which were violent, bloody -- and extrememly successful. Neil Nicastro, president of WMS Industriews Inc., the Chicago-based game company that owns the rights to "Mortal Kombat III," says Sony will have the rights exclusively for six months on the 32-bit platform. When "Mortal Kombat III" is launched in October, it also will be available for all 16-bit videogame players, handheld game players, and CD-ROMs for personal computers. "We've got great confidence that the PlayStation's launch will be successful," said Mr. Nicastro. "From a player's standpoint, it gives a real arcade experience." Sony's Mr. Olafsson said that he expects the machine to be priced well under $400 in this country, despite the weakness of the dollar against the yen. "We know that price is a major issue for consumers," he added. Many of this country's top software companies are making titles for the PlayStation, among them Crystal Dynamics Inc. and Electronic Arts Inc. A virtual Who's Who of American retailing is expected to carry the game player, including Kmart Corp., Wal-Mart Stores Corp., and Toys "R" Us Inc.