Sony 2000 Annual Report Download - page 27

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SONY CORPORATION ANNUAL REPORT 2000
25
Various software developers and publishers in Japan and other countries have continued to
release a steady stream of captivating titles in each region, including such mega-hits as BioHa za rd
3~LAST ESCAPE~ by CAPCOM CO., LTD. in Japan, Fina l Fa nta sy VIII by Square Electronic Arts
L.L.C. of the U.S. in North America, and FIFA 2000 by Electronic Arts Inc. in Europe. SCE’s Gra n
Turismo 2, which was a smash hit in Japan, subsequently became a bestseller in North America
and Europe, lifting worldwide cumulative unit sales of this title over the 5 million mark.
ADVANCED SEMICONDUCTOR FABS AT THE HEART OF PLAYSTATION 2
SCE has established production facilities in Japan for the semiconductors at the heart of
PlayStation 2, a 128-bit CPU called the EmotionEngine and a massively parallel rendering engine
called the Graphics Synthesizer. For the EmotionEngine, SCE formed a joint venture with Toshiba
Corporation, building a new production line with next generation 0.18-0.15 micron process
technology at a Toshiba plant in Oita, Japan. For the Graphics Synthesizer, SCE built Fab1, a
plant adjacent to Sony Nagasaki Corporation, equipped with 0.18 micron embedded process
technology. Initial capital expenditures for the production of the EmotionEngine and the Graphics
Synthesizer, are about ¥130 billion, approximately ¥110 billion of which was incurred during the
year under review. Furthermore, in order to meet the expected enormous demand for PlayStation 2
in Japan, North America, and Europe, SCE decided to make additional investments of approxi-
mately ¥125 billion for both increasing production on the existing lines, as well as construction
of a new Fab2 facility.
PLAYSTATION.COM (JAPAN) BEGINS DIRECT MARKETING
In February 2000, SCE established PlayStation.com (Japan) Inc. (URL: www.jp.playstation.com).
On February 18, 2000, the company began direct sales of products over the Internet (e-commerce),
including PlayStation 2 consoles as well as PlayStation 2 software, DVD-Video software, and
other related products. The new site achieved sales of approximately 500,000 PlayStation 2 con-
soles by the end of March 2000, and has become one of the top e-commerce sites in Japan.
Furthermore, in March 2000, PlayStation.com (Japan) Inc. increased its capital through a
third party allotment from companies including seven content companies, NAMCO LIMITED,
Konami Co., Ltd., SQUARE CO., LTD., ENIX CORPORATION, CAPCOM CO., LTD., Bandai
Co., Ltd., and KOEI Co., Ltd., as well as Seven-Eleven Japan Co., Ltd., Culture Convenience
Club Co., Ltd., DIGICUBE CO., LTD., Happinet Corporation, and NTT DoCoMo, Inc.
MOVING INTO THE BROADBAND NETWORK AGE
SCE is currently preparing for a 2001 start of digital distribution of content (e-distribution) by
using PlayStation 2 as a network terminal. This service, by connecting a PlayStation 2 console to
a broadband network such as a CATV system, is designed to offer wide-ranging forms of enjoy-
ment and enable users to download directly PlayStation 2 software and to engage in interactive
communication. In order to expand the PlayStation and PlayStation 2 formats, SCE plans to
embark on a growing array of broadband network initiatives with a variety of leading partners.