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Sony into games market

The PlayStation, Sony's long-awaited "new generation" video game console which company insiders call the most important new product since the Walkman, will be launched in Europe at a retail price of pounds 299.

Backed by a pounds 20m advertising campaign in the UK, the PlayStation marks Sony's entry into the computer game mass market, in direct competition with rivals Sega and Nintendo.

Analysts say the company needs a hit; the strong yen, coupled with Sony's high manufacturing cost base in Japan, have combined to squeeze profits in 1994 and 1995.

Already a runaway success in Japan, where a million units have been sold since introduction last December, the PlayStation was launched earlier this year in the all-important US market. UK director of computer entertainment equipment, Ray Maguire, said the company hopes to sell a million consoles in both the US and Europe by 1997.

Analysts said the battle among the three Japanese manufacturers might lead to a price war, as each attempts to establish its format as a new industry standard. Sega's Saturn, a CD-based system like the PlayStation, was launched in the UK last month, retailing for pounds 399. Some analysts believe Sega may slash its prices to compete with Sony, although the company denies this.

Nintendo has put off introduction of its 64-bit cartridge-based new console until 1996, partly due to the high value of the yen against the dollar.

War of the consoles, page 16