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Interview with Ken Kutaragi
Added October 5, 1999

Nikkei Industrial Daily spoke with Ken Kutaragi about the PS2 and networks:

Q: Why hook up PlayStation2 consoles to cable-television networks?
A: Cable-TV networks are very promising because they have the best compatibility with TV sets among broadband systems. They have far bigger capacities than digital subscriber lines or wireless networks. Some 5 million households in Japan already subscribe to cable-TV services. I believe that the Internet will become accessible to 5-10% of the population via cable TV by around 2001.

Q: What do you plan to distribute online?
A: Any content that can be digitized. Game software, to begin with, and then music and movies. Although current electronic-commerce technology allows only electronic orders and purchasing, it is already bringing a great change to the structure of our industry. When the products themselves are digitized and distributed over the Internet, that will revolutionize our way of life. We call this e-distribution.
We have already created a superb content archive for online distribution in cooperation with software developers. E-distribution is no longer a dream. Distributing music over the Internet will become ordinary practice by the end of this year.

Q: How do game machines function as a terminal for such services?
A: Game machines are increasing in number at a rate far outpacing the growth in other consumer electronics. PlayStation has an installed base worldwide of some 60 million units. The console is supported by a wide range of fine software. When PlayStation2 is connected to broadband networks, immediately several thousand software titles will be accessible.

Q: What is your idea of new online-distribution business?
A: The industry will be supported by three layers of people: creators, publishers and distributors. Creators develop content, which publishers put into commercial form and market through sales channels developed by distributors. The industry will be shaped like a pyramid, where the numbers of people involved decline at each level from creators to publishers to distributors. Anybody who is talented can become a content designer. But the number of publishers will eventually be consolidated to around a dozen, and distributors will likely be even fewer in number.
CD-ROMs, which are used as storage media for PlayStation software, have changed the ways game software is distributed. Almost everyone has viewed CD-ROMs as multimedia or large-capacity media, but we have always been aware of their potential as a distribution medium. The same is true of e-distribution. It is a grand experiment to realize our vision of an ideal distribution method.

Q: Will PlayStation2 become an exclusive terminal for online distribution?
A: When hooked up to TV sets, PlayStation2 is the best candidate in terms of user-friendliness to become a standardized terminal for e-distribution. TV sets have a unified standard and interface, making it possible for PlayStation2 to be connected to any model. This simplicity and unity is one of the crucial features for future home-electronic devices. Rapid evolution in personal-computer designs has started to break down such uniformity in the PC standard.

Q: Any particular reason for distributing entertainment content online?
A: Games are a culture. I think there can be as varied and as many cultures as there are people. As Amazon.com has succeeded in selling books through the Internet, we would like to expand our online business by exploiting the variety of content we handle. However, conventional compact discs and digital versatile discs will remain important sales channels for mass distribution.

Q: What about movies?
A: Movies will be distributed in digitized form directly to movie theaters in the near future. Our next dream is to achieve the integration of movies, music and game software.



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