Tuesday's deal between
AOL Time Warner
sure sounds cool. But by the time it has any impact,
Tomb Raider's Lara Croft may be traveling to her adventures on a senior citizen's discount.
On the eve of the video-game industry's most important annual trade show, the companies announced that they would team up to offer the
service, as well as games incorporating AOL-like features, on Sony's PlayStation 2 game machine. Though the alliance looks like a clear challenge to
, which is making a big splash with its Xbox system at the
Electronic Entertainment Expo, it may take two or three years for that threat to materialize.
AOL Time Warner's shares rose 2 cents Tuesday to $51.62, while Sony rose $1.47 to $78.55 and Microsoft fell 34 cents to $68.38.
The Distant Future
While the companies intend to add AOL features such as instant messaging to PlayStation 2 games and also hope to offer a fully featured version of the service for the console, AOL has yet to determine what these services will look like, says AOL spokeswoman Anne Bentley. AOL is showing a "concept demo" of the service at E3, she says, but it will also have to do focus group testing to find out exactly what users will find compelling on the AOL/PlayStation 2 combo. It's reasonable to assume that it might take a year to develop the services, she says, but she points out that the company has worked more quickly than that in the past, taking only a few months between its announcement of new access devices with
and their actual introduction.
But the calendar for integrating chat or email into games, as opposed to developing a PlayStation 2-friendly AOL service, may take longer. Sony intends to come out with a software developer's kit for integrating AOL features into games by late winter, says Bentley. But according to Eric Goldberg, a 24-year veteran of the gaming business who is now president of
, it will take another three to six months for software developers to integrate those features, whatever they may be, into previously existing games. Designing a new game with these features from the ground up will take about a year, Goldberg estimates.
The biggest handicap for the new service, however, will be the hardware, says Goldberg. To enable the new features, Sony says it will be selling -- perhaps as early as this year -- Internet connection accessories, including a modem, keyboard, mouse, monitor and disk drive. But experience in the video-game market suggests that only about 5% of game users will go out and buy such accessories, says Goldberg. The key mistake that Sony has made is to not build the modem directly into the PlayStation 2, says Goldberg. "It's a great press release," he says. "But it's not real, in terms of having any real effect for the next two or three years."
By the time Sony and AOL's Internet-connected gaming platform could take off, two other gaming platforms will be well ahead of it, Goldberg says. One of those is the Internet-connected personal computer, which is in tens of millions of homes in the U.S. The other is Internet-connected cell phones and other devices, says Goldberg, whose company is focused on wireless game technology. By the end of the year, 8 million to 10 million cell-phone users in the U.S. will be subscribing to Internet access, he says.
Of course, it's not like video-game players haven't had the chance to connect to the Internet via machines before. Several years ago at a previous E3,
demonstrated such a service via one of its game machines. But the service never took off.
Given the timing of the announcement and the likely lag before product introduction, it might appear that AOL and Sony timed their announcement to steal Microsoft's Xbox-induced thunder. "Not at all," says Bentley. "This isn't in response to Microsoft. We don't do that."
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