Sony challenges channel with online games store

Electronics giant Sony has set up an Internet store to sell its video games online, throwing the future of its traditional channel into doubt.

Electronics giant Sony has set up an Internet store to sell its video games online, throwing the future of its traditional channel into doubt.

Playstation.com, the company's e-business arm, was launched in Japan last week and is expected to be repeated across Europe.

Sony will challenge its established dealer channel and use the Internet in the increasingly volatile video games business.

"Sony's announcement is not a surprise," said Jeremy Davies, a senior partner at Context. Davies claims that selling games online is the future and that in the long term resellers will not be able to sustain a business by selling games alone.

"In the short term for dealers in the UK it will be alright because of the Internet's slow penetration in this country," he said. "However, others will follow Sony, and as Web connections speed up dealers will have to look at changing their business models. The traditional dealer role of just selling games is definitely coming to an end."

Playstation.com offers customers only Playstation games and hardware, but the online store will also sell Sony CDs and DVDs.

The e-commerce unit, under Sony's wholly-owned subsidiary Sony Computer Entertainment, has been set up with 11 companies, including software vendors and convenience store company 7-Eleven Japan. The 11 firms will have a combined 20 per cent stake in the e-commerce division.