Manufacturers of audio/video systems were shocked last September when SCE disclosed that Playstation 2 would have a DVD-Video player function. A single console offering both game and DVD-Video functions at a price of 39,800 yen (about $365) could make Playstation 2 a strong competitor to dedicated DVD products. Sony hasn't yet announced the U.S. market price of Playstation 2.

SCE is preparing to ship one-million Playstation 2 units in its first week of availability.

When SCE announced its plans for DVD-Video at its introduction of Playstation 2 last September, observers said the picture quality of DVD on a Playstation 2 would not match that of dedicated DVD-Video players, which employ a hardwired decoder chip, while Playstation 2 processes DVD-Video in software. But at its demonstration Thursday, SCE compared the DVD-Video playback function to high-end DVD-Video players from Matsushita, Pioneer and Sony. Ken Kutaragi, president of SCE, said the interlaced scanning reproduction of the DVD-Video feature compared well with the quality of the high-end players.

"Picture quality is better than DVD-Video players in the same price range as Playstation 2 and in some case competitive with high-end ones, too," said Reiji Asakura, an audio/video critic and vice chairman of the Society of Picture Quality Engineers.

SCE said software processing of DVD-Video is an advantage because upgrades can be done via a software distribution. SCE said it intends to add progressive scan (525p) output capability to Playstation 2's DVD-Video function within half a year. That capability is available now only on top-end DVD-Video players.

SCE said it has taken measures against cracking the copy protection abilities of the DVD-Video decoder software, but declined to detail that scheme.

The DVD-Video driver software will be provided in a memory card and CD-ROM, which will be shipped with the game console, the company said.