Playstation Strikes Back

The world is in trouble. Big trouble. A virus that first struck western Russia after World War I has spread across the continent, devastating Europe. We're not talking bird flu here, but something from outer space, or hell, that turns humans into horrible, and hard-to-kill, monsters known as the Chimera. Humanity is bracing for annihilation.

But there is a way to save the world—by leading a squad of American warriors to the U.K. to turn back the hideous creatures. It just requires the reflexes of a teenager, a tolerance for digital gore, a pricey high-definition television and, most important, a brand-new Sony PlayStation 3.

The shiny black PS3 is the long-awaited supercomputer sequel to the PS2, which sold more than 100 million units, burned billions of hours and planted an untold number of blisters on thumbs twiddling the joysticks. For Sony, a company lately plagued by depleted profits, post-Walkman iPod envy and flaming laptop batteries, a sequel to that success story would mean more than a dozen "Da Vinci Code" blockbusters. The PS3's promise is to extend digital entertainment into a realm so mesmerizing that your consciousness will be sucked into a virtual world, an experience enhanced by a shared participation with friends and foes around the world via a built-in broadband connection. And there's a bonus: though the price is high for a game machine—$500 for a basic unit and $600 for the one you want, the model with a 60-gigabyte disk drive and Wi-Fi connectivity—it includes a way for the millions who've sprung for gigantic flat-screen TVs to finally use disks that take advantage of all that high def. (Every PS3 will ship with a high-def copy of the Will Ferrell comedy "Talladega Nights.")

The PS3s went on sale in North America and Japan last week. Game pundits have targeted the gory "shooter" game described above, Resistance: Fall of Man, to be the platform's big hit, both for solitary warriors and those who choose to play in online packs of up to 40 players at a time. That is, if there are enough Sony PS3s to go around this Christmas, which there are decidedly not: a measly 400,000 for all of North America, with only a total of a million promised by the end of the year—a tiny fraction of the game-hungry public ready to upgrade their PS2s.

This makes the PS3 this year's toy-store holy grail, despite the fact that there's another high-def console available, Microsoft's Xbox 360. (More on that rivalry in a minute.) Gamers who snared preorders at Toys "R" Us or GameStops filled out their reservations months ago. Still others are frantically bidding on eBay—for prices ranging from $1,500 to more than $2,000. All for a shot at a shiny black box that looks like Darth Vader's medicine cabinet—and is billed as a machine that makes dreams.

We've been to this dance before, haven't we? For decades now, whenever a flashy new game machine appears, techno-pundits swoon, aficionados go into a frenzy and parents descend into the black market to make sure the vaunted gizmo winds up under the tree. What's different now? After getting closer to total immersion with each iteration, we're just about there, thanks largely to the newcomer in the family living room, the flat-panel display that dominates your wall like a drive-in movie screen. In this generation of game consoles, it's all about those HDTVs, supercomputer power and online game play, directed largely at the overgrown adolescent at heart who savors "M-rated" content and "hero moments" where he's the star of an action movie. All that technology translates into eye-popping effects that will jack up the heart rate and dominate IM chats for days afterward. "I've been in this business for 16 years," says Bobby Kotick, CEO of game developer Activision, "and this is the most profound shift in hardware I've ever seen." The PS3, with its power and connectivity, also has the potential to bind together all our media into one powerful living-room hub.

The basics of this dream came from one man, 56-year-old PlayStation inventor Ken Kutaragi, who broke ground 12 years ago by introducing a powerful machine, the PS1, with a high-storage CD drive for bigger games with complicated play and intricate graphics. Kutaragi redefined the game machine as the most muscular computer in the house, and in the process transformed an obscure Tokyo division, Sony Computer Entertainment, into a powerhouse that delivered a huge portion of Sony's profit. Five years ago he followed with the PlayStation 2, with even more powerful chips and a risky adoption of another new disk format: DVD. Now, with the stakes higher than ever—and the most serious competitor yet, Microsoft, having beaten him to market—an exuberant Kutaragi is crowing that after months of delay he has fulfilled his 12-year-old dream to create "the perfect computing system."

"Kutaragi is making a great gamble in a breathtaking effort to take control of the future," says Sony CEO Howard Stringer. In the biggest of his technological bets, Kutaragi worked with a consortium of about 400 engineers from three companies—Sony, IBM and Toshiba—to create what would be not just a game-machine brain but a workhorse for the next generation of computer and consumer-electronics products. He calls it the "cell," a fast processor that can work in parallel with others so that you could drop several cells on a chip to churn trillions of calculations in the time it takes to dodge a dagger thrown by a virtual Genji warrior. In the PS3, the main chip is actually a hydra-headed beast with seven cells working in parallel. The performance of the chip "can be quite spectacular," says Peter Hofstee, IBM's chief scientist on the $400 million project. Hofstee says that the cell delivers 50 times the performance of the mighty G5 PowerPC chip.

Does the cell make a difference when you're shooting aliens with a rocket launcher or going long in Madden Football? Some game developers aren't sure. "The PS3 has more theoretical performance," says John Carmack, co-creator of Doom. "[But] in terms of what's accessible, there's not much difference." Others, like Ted Price of Insomniac Games—the creator of Resistance: Fall of Man—are thrilled. "As we set goals for Resistance, we realized how powerful the PS3 was," he says. Price takes particular pride in details such as the realistic way debris kicks up after a blast (not to mention a steady spray of blood splatters when you blast a creepy foe). "And we're just scratching the surface of what the PS3 can do."

Another risky step was the inclusion of one of the two brand-new competing formats of high-definition optical disk, thus thrusting the PS3 into the center of an incredibly frustrating standards war. By making PS3 the first mass-market product to include an HD drive, Kutaragi is out on a limb. But how else could you store the really big games that could make a really big impact? "There was no other choice," says Kaz Hirai, PlayStation's top U.S. executive. "We need to futureproof this console as much as possible." A DVD has a capacity of nine gigabytes, plenty for a game on standard TV. But a Blu-ray disk has about 50 gigabytes' worth of storage. (The competing format, HD-DVD, has about 30 gigs.) Developers are eager to take advantage, especially for games designed to run at the highest resolution, 1080p (that's nirvana for video geeks). "Within a year, you'll see games that fill up all 50 gigs," says Activision's Kotick.

A third technical aspect of the PS3 has some gamers scratching their heads: a wireless handheld controller that looks the same as it did on the PS2, but takes away one beloved feature in exchange for a new one. Gone is the "force feedback" feature that, during crucial moments in game play, makes the controller jump and rumble in your hand, like a rat trying to escape your grip. Sony believes that a new trick will more than compensate: a Sixaxis motion-sensing system that gives players additional control of their on-screen characters by tilting, waving or thrusting the controller.

There is a price to pay for being the first to implement new technologies: it's costly (even at the PS3's high price, Sony sells the units at a considerable loss) and it takes time to get it right. While tweaking the Blu-ray, Sony failed to launch by its original spring deadline, and now faces a Christmas when its biggest fans will either have to win merit badges in urban camping or go into PayPal penury to come up with the moola to outbid competitors for a PS3. Some in the industry also question whether Sony can deliver on its promise of 6 million units by the end of March, when the platform is due out in Europe. "I think it's a challenge for them. If they do it I'll be delighted," says Larry Probst, CEO of software-game giant Electronic Arts. It's a trade-off that comes with Kutaragi's obsessive pursuit of technological superiority. "We love innovation, and in the PlayStation family we want to bring in the future," he says.

To Sony's competitor in Redmond, Washington., the delays and the high price tag of the PS3 come as unexpected gifts. Microsoft always saw its entry into the game-console market as a very long-term strategy, figuring that if its first effort, Xbox, could establish credibility, the current iteration, the $400 Xbox 360, would broaden the market. Besides being the first high-def game console to market, Xbox 360 has as its strong suit the expertly structured online service called Xbox Live, which combines the lust of game-playing with instant-messaging and social networking—a Facebook for the joystick crowd.

Microsoft is focused on pressing its early lead. "Historically, the first company that gets to 10 [million] or 15 million consoles sold has a tremendous advantage," says Robbie Bach, the Microsoft president in charge of Xbox. He hopes to hit that 10 million mark by December, before Sony gets past the eBay stage, though some analysts think that's overly optimistic. "We've got a $200 price advantage, a full supply at retail and 160 games available," says Xbox marketing czar Peter Moore. "Sony will do its job, which is creating excitement around the category. We'll do our job, which is delivering the units to retail."

To counter Sony's inclusion of Blu-ray, Microsoft is rolling out a $200 disk player add-on that serves up high-def movies (but can't be used to run games) on the HD-DVD format. And to establish Xbox 360 as a home-media server, Microsoft announced last week that it would sell TV shows and movies through Xbox Live.

Microsoft's ace in the hole, though, is the next version of the wildly popular Halo game, expected sometime in 2007. More than 6 million people have downloaded the breathtaking movie-style teaser for the game. In the meantime, the company is touting a new title, Gears of War, a shooter with similar blood-splattered thrills as the PS3's Resistance game. Bottom line: Microsoft is making inroads. "While Sony has been the market leader, and it's hard to knock them off their perch, I can imagine that Microsoft is going to pick up market share in this cycle," says Probst of Electronic Arts.

And if the Xbox 360 isn't enough competition for Sony, an old rival is launching a game system that's creating considerable buzz. Nintendo's Wii (pronounced "wheee!") is distinguished by a motion-sensitive controller that goes beyond the PS3 Sixaxis handset—you can play video golf by swinging the controller, which looks like a remote-control unit. Since Wii doesn't have high definition, there won't be games where people swoon at the swaying of every blade of grass in an artificially rendered meadow, nor will you see reflections in the beads of sweat on a virtual NBA player's brow. But it costs only $250, and Nintendo has a knack for developing games that younger kids adore. "We're going after a different kind of consumer," says Nintendo America president Reggie Fils-Aime. "We want to bring gaming back to the masses."

Ultimately, Sony's belief is that the PS3's power will become unmistakable by the midpoint of the five-year life cycle of game consoles, when the developers learn to make the most of the cell chip and the Blu-ray disk. Game mavens are looking ahead at innovative titles such as Lair, a stunning fantasy epic whose buzz hints that it may become the videogame equivalent of "The Lord of the Rings." Lair's developer, Factor 5, has trained its programmers to fully exploit the cell processor to animate entire armies of warriors; the game's intricate detail requires the capacity only the Blu-ray disk can deliver, and by using the Sixaxis controller, the game player can actually "ride" a photo-real dragon. "It's like you're really holding the reins of a dragon," says Factor 5's president, Julian Eggebrecht. "This game wouldn't be possible at all on any other platform."

But this year, when PS3s are harder to come by than dragon's teeth, it's a different story. Just ask James Short, a Kentucky game fan who scanned the Internet "day in and day out" to find opportunities to reserve a PS3 from a retailer, and finally heard that a Toys "R" Us in Lexington was doing a limited presale. He arrived at 5:30 in the afternoon to wait for the next day's 10 a.m. opening, partied with others in line and bought a voucher for one of the seven units that Toys "R" Us will get on launch. And like every other person on line, he sold the voucher on eBay. (Winning bid: $2,000.) This Christmas, he'll play Xbox. PS3 will have to wait.