What's New in Game Console Market
Sony Unveils PlayStation 3 Details
Kodak Focuses on Digital Printing in Japan
AIST Develops Super-Fine Inkjet Technology
Shiko Electric Launches Dye-Sublimation Digital Printer
Matsushita Develops World First Transparent-Panel Speaker
Chinese Firm Commercializes 2M-Pixel DSC

Sony Computer Entertainment and Microsoft, competing fiercely in the home video game market, are both quietly looking to outsource production of their hardware to cost-competitive OEM manufacturers. A source in Taiwan reported on March 22, 2002, that Microsoft had issued an Xbox assembly contract to Winstron and Hon-Hai, both of Taiwan. Winstron is expected to assembly 70-80 percent of the volume, expected to be in the range of 400,000 to 700,000 units a month; Hon-Hai will assemble the remaining. Solectron has announced that it was awarded an Xbox repair contract in Japan and Australia. Solectron already provides repair services to the Xbox units sold in the North American markets. Up to this point, Flextronics of Singapore has been manufacturing the Xbox at its Mexican and Hungarian plants.

Sony, on the other hand, is reportedly already having its two major OEM contractors in Taiwan produce the PlayStation 2 in their Chinese plants. According to a source in Taiwan, Sony outsourced assembly of the PlayStation 2 to several OEM manufacturers in Taiwan in the latter half of 2001, including Flexconn Electronics (the registered trade name of Hon Hai Precision Industry) and Asustek. Sony is shipping, on average, 2 million PS2 units each month, with 75-85 percent produced by the subcontractors in Taiwan.

Similarly, Nintendo, which is selling its GameCube console for $199.95, is looking to move its production operation to China in order to be more cost competitive. Nintendo's executive told Reuters that the company is likely to slash GameCube's price tag later this year if Sony sharply reduces the price of PlayStation 2 to match the GameCube's price. PlayStation 2 currently retails for $299. On February 22, 2002, Sony revealed to Mainichi Newspaper that the company is considering another price cut for PlayStation 2, in order to fight the competition with Xbox and GameCube. PlayStation 2 originally retailed for 39800 yen ($306 @ yen 130/$US 1), went through two price reductions in Japan, to 35,000 yen ($269), and then to 2,9800 yen ($229) over a 20 month period.

Despite Microsoft's determination, the Xbox is not selling as well as the PC software giant had hoped for in regions other than United States. According to Enterbrain, a Japanese game magazine publisher, Microsoft sold only 190,092 units of Xbox in Japan between February 22, the release date, and March 31, 2002, even though the company had prepared 250,000 units for the Japanese debut. Industry analysts expect Microsoft to slash the Xbox price to promote sales, particularly nearing the 2002 Christmas season. A cutthroat price war, unusual among the three game hardware heavyweights, may be inevitable. [M. Robertson, Portelligent]

Mr. Shinichi Okamoto, CTO of Sony Computer Entertainment (SCEI), unveiled elements of the PlayStation 3 in his keynote speech at the recent GDC, Game Developers Conference in San Jose. PlayStation 3, or PlayStation Distributed Environment, includes the following elements.
-New processor architecture called Cell, being co-developed by SCEI, IBM and Toshiba;
-Distributed computing concept, an evolved version of the Grid Computing protocol;
-Autonomic computing functionality;
-Linux-based OS;
-New man/machine interface; and
-Scalability from PlayStation terminals to a server equipped with several tens of thousand Cells.

Cell is presumably a chip containing multiple processor cores, equivalent DRAM memory, a network interface, and an autonomic computing function. Cell will run Linux-based distributed computing, utilizing the open source community Globus grid protocol. Cell will be adopted not only by the PlayStation box, but also by the network backend and other clients; the distributed OS will cover the entire network. In other words, although the game is played on a box at home, its data and data processing will be performed over the network, not on the local CPU. Therefore, performance and data that are not tied to the PlayStation 3 box will be available.

The performance target of PlayStation 3 is 1,000 times greater than the PlayStation 2. According to Mr. Okamoto's presentation, 1000x performance can be achieved in 2005, using distributed computing and concurrent parallel processing. Rumor has it that PlayStation 3 will be a monster with enormous graphics power. Sony is acknowledging that its graphics features will be superb, but the company is also heralding increased simulation and AI processing performances. Of course, it will be equipped with broadband network connection features. Sony is positioning the third generation PlayStation to do away with a limited performance concept that is shackled to the box and the software. Sony's marketing concept is "The Network is PlayStation," enabling theoretically unlimited performance. [M. Robertson, Portelligent]

On April 4, 2002, Mr. Kazuyoshi Hori, CEO of Kodak Japan, announced at a press conference that Kodak's Japanese subsidiary would undertake a strategic shift from sales of digital cameras to an emphasis on providing digital printing infrastructure and systems available through so-called DPE ("Development, Printing, and Enlargement") stores. While Kodak enjoys a substantial share of the digital camera market in North America, it has not gained similar traction in Japan. In remarks made at the "Kodak e-Revolution 2002" exhibition in Japan, Mr. Hori stated that "Kodak Japan is not obsessed with the sale of digital camera hardware. We're content to have other companies sell the cameras, but we want to dominate the digital printing business."

Kodak's "Easy Store Solutions" offering is designed to strengthen the capability of DPE stores to handle requests for the printing of digital photographs and images. Currently, according to Kodak Japan, 70 percent of digital still camera prints are printed by consumers in their homes. In 2005, however, Kodak is forecasting that 60 percent of digital still camera printing will be ordered at stores or via Internet-based printing services. [M. Robertson, Portelligent]

The Nano Technology Research Division of the National Institute of Advanced Industrial Science and Technology (AIST) of Japan has developed super-fine inkjet technology, according to an institute press release April 1, 2002. The technology is based on a new method, different from either the commonly used piezo or thermal methods used in existing printers. By adopting a metal nano-particle paste developed by Harima Chemical as the ink, the technology allows the drawing of super-fine wiring patterns (several micron meter level) directly onto the substrate. The new technology is expected to bring innovation to surface-mount technology, continuing in the miniaturization of electronic devices, and speeding up the development and manufacturing period for those products. The new technology can be also applied to other areas such as bio, optical and super-fine processing technologies. The Institute will solicit participation from the private sector for the joint research toward commercialization of the new technology.

A Japanese press release with pictures is located at http://www.aist.go.jp/aist_j/press_release/pr20020401/pr20020401.html. [M. Robertson, Portelligent]

Shiko Electric, an affiliate of the Kobe Steel Group, has announced that it would launch a dye-sublimation method digital printer, the COLOR PET, at the end of April 2002 for 19,800 yen ($152 @ yen 130/$US 1). Shinko Electric is a leading OEM supplier of dye-sublimation printers for business use. The new printer is strategically priced to compete with ink jet printers, as the company is reentering the consumer printer market after 50 years. The COLOR PET features 306 dpi, 16.7 million colors, and can print at 994 x 1410 dpi. A ribbon cassette and 25 sheets of paper will be sold as a set for $1,250 yen ($10). The company plans to ship 100,000 units in the first year. [M. Robertson, Portelligent]

Matsushita Electric Industrial Co., Ltd., and Matsushita Electronic Components have developed the world's first transparent speaker, the Sound Window, which generates sounds by vibrating a clear panel with air pressure. The companies adopted the transparent panel as a vibration board, and developed the Aero Drive technology, which vibrates panels with pressure from a driver, which is attached to the backside of the panel with approximately 100 microns of space in between them. Because sound pressure is transmitted throughout the panel, the technology is not dependant on the shape of the panel. For example, the clear film of an LCD touch panel used in a PDA could also be used as a speaker. Compared to a conventional speaker, The Sound Window is weak in producing the upper register sound range, but it consumes very little power, about 1/25 of a conventional speaker. The companies plan to commercialize the speaker before the end of 2002. A picture of the prototype is located at http://www.matsushita.co.jp/corp/news/official.data/data.dir/jn020327-1/jn020327-1-1.jpg. [M. Robertson, Portelligent]

Founder Information Co., Ltd. of China released two new models of digital still cameras, both of which are compact, fashionable, and easy to operate. The PHOTOPOWER225 is the first digital still camera manufactured by a Chinese firm that has over two million pixels. Founder Information positions its digital still camera operation as an important aspect of its strategy to evole into an IT conglomerate. The company hopes to become one of the top three digital still camera suppliers in the Chinese market within two years. [M. Robertson, Portelligent]