Part 1 MSX IS COMING
Tom R. Halfhill, Editor
Selby Bateman, Features Editor
More than a dozen consumer electronics and computer companies—primarily Japanese—are gearing up to enter the U.S. market in early 1985 with new inexpensive home computers designed around the so-called MSX standard. What is MSX, and what does it mean for American computer companies, software publishers, and consumers? We'll examine these questions in this first installment of a special two-part series.
A giant silicon-based question mark is rising on the Far Eastern horizon. The shadow it casts is stalking the U.S. home computer industry, and millions of dollars in future sales hang on how far it creeps. Depending on your point of view, it will either brighten the market for everybody or darken the future for American competitors. One way or the other, its arrival on these shores will help determine the course of the consumer electronics and home computer industries for years to come.
The question mark is something called MSX, and it's an enigma waiting for answers. Will it signal the first successful Japanese invasion of the U.S. home computer market? Will it establish the long-awaited standard among home computers? Will it banish the confusion over home computing and make computers as widely accepted and popular as TV sets and stereos? And finally, how will American manufacturers react to the Japanese invaders? Will they try to beat them, or shrug their shoulders and join them?
Mindful of past Japanese takeovers (or near-takeovers) of the U.S. camera, motorcycle, audio, video, auto, and steel industries, the leading American computer firms are watching MSX very closely. Powerful Japanese consumer electronics companies with such familiar names as Sony, Yamaha, Panasonic, Sanyo, Hitachi, and others have been planning their MSX strategies for more than a year and a half. Their target: the tens of millions of Americans who still haven't bought a home computer, plus millions more who perhaps already own a computer but are confused and frustrated by a mishmash of conflicting nonstandards and incompatibilities.
The secret weapon of MSX is its answer to the dream of practically everyone who has tried to piece together a computer system with today's hardware and software. MSX is a true standard—a coordinated system of hardware and software that is fully compatible across the product lines of competing manufacturers. The beauty of MSX is that any software program on tape, disk, or cartridge which runs on one MSX machine will run on any other. You can plug a Sony MSX program cartridge into a Yamaha or Panasonic MSX computer and it works exactly the same. Or pop a Sanyo MSX tape or disk into a JVC or Hitachi MSX computer. No emulators, no adapters, no confusion.
MSX peripherals are compatible, too. Disk drives, tape drives, printers, modems, joysticks, light pens—any accessory which adheres to the sharply defined MSX standard can be hooked up to any MSX computer. While American consumers and software publishers have had to wrestle with the mutually incompatible systems of Apple, Commodore, Atari, IBM, TRS-80, and others, MSX introduces a common, unified system.
What's more, MSX even offers some compatibility with popular de facto standards. The disk operating system, MSX-DOS, was written by the author of MS-DOS and is format-compatible with MS-DOS. That means an MSX computer can read disks formatted on an IBM PC or PC-compatible. MSX-DOS works almost exactly like MS-DOS, too. MSX-DOS also can run most programs written for the CP/M-80 operating system (opening up a library of thousands of programs, mostly business-oriented). And MSX BASIC is a very powerful and complete language which closely resembles IBM PCjr Cartridge BASIC and TRS-80 Color Computer Extended BASIC.
Most important, MSX isn't just a prototype or an untested product. The first generation of MSX computers made their debut in Japan in November 1983, and by midsummer 1984 more than 265,000 units had been sold, capturing a significant share of Japan's low-end home computer market. Now MSX is moving into Europe. The U.S. market, potentially the most lucrative, is next.
One of the main criticisms of MSX is that it's technologically obsolete compared to the newer 16- and 32-bit personal computers.
On the surface, the MSX concept might appear quite simple. Yet there are interesting paradoxes. First, although Japanese manufacturers are the strongest proponents of MSX, it's not owned by a Japanese company. It was developed by an American company, Microsoft Corporation (MSX stands for Microsoft Extended). The prime force behind MSX development was Kazuhiko "Kaye" Nishi, president of Microsoft's Far East Division. Nishi also cofounded the giant Japanese software and magazine publishing company ASCII-Microsoft, and designed the popular TRS-80 Model 100 portable computer.
Microsoft owns the rights to MSX and licenses the technology to the manufacturers. Since Microsoft announced MSX in Japan in June 1983, it has sold licenses to 16 Japanese and Korean consumer electronics firms, one European electronics giant (Philips), and a U.S. computer company with factories in Hong Kong (Spectra Video).
Microsoft, of course, is virtually a household name—if your household has a personal computer. It was founded in the mid-1970s by two young college students, Bill Gates and Paul Allen, who wrote the first commercial BASIC interpreter for a microcomputer (the Altair). Since then, Microsoft BASIC has become the standard built-in language on nearly all personal computers, including Commodore, IBM, Apple, TRS-80, and numerous others. Microsoft is also the company behind MS-DOS, the most popular operating system for 16-bit personal computers.
But the fact that Microsoft has always been at the cutting edge of a very fast-moving marketplace raises another paradox: It has based MSX on the Zilog Z80A microprocessor (an 8-bit central processing unit), the Texas Instruments 9918A video chip (16 colors, 32 programmable sprites), the General Instruments programmable sound generator (three channels, eight octaves), 32K of ROM, and 16K to 64K of internal RAM. The technology is solid, versatile, cheap—and old. In fact, one of the main criticisms of MSX is that it's technologically obsolete compared to the newer 16- and 32-bit personal computers starting to appear.
Ironically, however, the low-end MSX computers (which will probably sell for around $200 or less) can be hooked up to everything from digital televisions and sophisticated light pens to powerful music synthesizers, laserdisc players, and a variety of other high-tech peripherals. If what really counts in a computer is not the technology inside it, but the applications you can squeeze out of it, then the MSX machines may actually seem more advanced than today's home computers—especially to consumers who won't know an 8-bit chip from a Frito.
The GoldStar FC-200 MSX Personal Computer, a Korean creation. The keyboard layout is very similar on all MSX computers. Notice the editing keys, cursor keypad, and preprogrammed special function keys. The hatch at the upper right conceals the ROM cartridge slot. The hole next to it is a light pen holder.
Experience in the market-place lends credence to this theory. For instance, although Apple II-series computers have changed relatively little since 1977 and are as technologically obsolete as MSX computers, the vast selection of quality software and expansion hardware helps to keep the Apple IIe and IIc very popular, even at high-end prices. It's apparent that people perceive the value of a computer in the tasks it can perform, not the circuitry it's made of.
If this principle holds true for MSX machines, their old technology may not be a handicap. Who will worry about the 8-bit CPU if MSX home computers are the only ones on the market that can blend computer graphics and videodisc images on your TV screen for super-realistic videogames and educational programs? Who will care about the limited three-channel tone generator if the MSX computers are the only ones that can be easily and economically converted into state-of-the-art polyphonic music synthesizers? Technical-minded hobbyists might care, but the MSX companies aren't hunting for that market. They have a much bigger game in mind.
Dated though it may be, the MSX technology will be tied to modern marketing strategies which could radically change the way home computers are sold. You can expect that part of this strategy will be to avoid the tiresome bits-and-bytes sales pitches and confusing comparisons that chase people out of the store. All the big MSX backers are consumer electronics companies, not computer companies. They're accustomed to mass-marketing TV sets, stereos, and videocassette recorders, and that's the way they'll try to sell MSX home computers.
Consider the sheer marketing strength of 18 companies selling what is essentially the same computer simultaneously. Industry observers were impressed earlier this year when IBM budgeted an estimated $40 million for an advertising campaign to launch the PCjr. IBM is one of the few companies that could afford such a sum. Apple budgeted $20 million to introduce the IIc, and even more for the Macintosh. Yet if the 18 MSX companies averaged, say, $5 million each for advertising and promotion, it would have the same impact as a competitor's $90 million campaign. If they each chipped in $10 million, it would be a $180 million campaign. When you figure in the MSX advertising from independent software publishers and the likelihood of additional MSX licensees, you can see why MSX is a marketing force to be reckoned with.
"The success of MSX really boils down to the number of companies that can, during a relatively short period of time, make their product introductions into the U.S.," says Ron Hisogi, manager of Far East business development for Microsoft. "In other words, having two companies selling MSX computers in the U.S. will not be as effective as if ten companies come here and say, ‘We are here with these MSX machines. This is what our respective products do.’ That would carry a lot more weight. Critical mass is really a key to making sure MSX takes off."
Most, but not necessarily all, of the 18 MSX companies will probably market MSX computers in the U.S. next year. Microsoft would like to see them enter the U.S. market soon, and indications are that it will most likely happen at the January 1985 Consumer Electronics Show (CES) in Las Vegas. At last June's CES in Chicago, MSX machines were already on display at booths run by three Korean manufacturers—Daewoo, GoldStar, and Samsung—and a Japanese company, JVC. One evening during CES, Microsoft held a private showing of Japanese MSX machines for selected third-party developers at Chicago's chic Javon Restaurant. The party, hosted by Microsoft's Bill Gates, also was intended to lure more manufacturers into the fold.
To date, the MSX licensees include the three Korean companies mentioned above, Philips (The Netherlands), Spectra-Video, and the following Japanese consumer electronics firms: Canon, Fujitsu, General, Hitachi, Kyocera, Mitsubishi, Matsushita (also known as National or Panasonic), Pioneer, Sanyo, Sony, Toshiba, Victor (JVC), and Yamaha.
Do most of those names sound familiar? They should. They practically dominate the U.S. market for TV sets, audio equipment, videodisc players, videocassette recorders, and other consumer products. And the companies themselves are banking on that name recognition, too.
Some critics spot a potential flaw in the ambitious MSX marketing strategy. What if the unified approach and attempt to establish a true standard backfires? How can so many manufacturers compete by selling the same computer?
The MSX companies have a response: the same way they compete by selling TV sets, stereos, VCRs, cameras, and other virtually identical consumer products. Each computer will be slightly differentiated by extra features or enhancements which are related to the company's particular strengths in the consumer electronics field.
Yamaha, for example, will offer an optional plug-in music synthesizer and piano-style keyboard which converts its MSX YIS503 computer into the equivalent of a sophisticated Yamaha DX7 polyphonic music synthesizer. The computer becomes a real musical instrument which puts even the Commodore 64 SID chip to shame. And if you can't play a note, don't worry; an optional bar code reader lets you feed popular tunes into the synthesizer for playback. Then you can modify the music almost any way you want, changing the beat, tempo, pitch, or instrumentation. If you want to play along, you can do that too—a keyboard display on the screen even shows beginners which note to play next.
The General Corporation, a Japanese firm known for its high-quality TV sets, has another angle. It manufactures a TV with a built-in MSX computer. "You plug a detachable keyboard into it and it turns into an MSX machine," explains Microsoft's Hisogi. "The nice thing is that the cartridge slot, the printer port, and all of that are integral parts of the TV set itself." The 14-inch TV, selling in Japan for the equivalent of about $550, houses the tuner and MSX system behind a three-inch panel below the screen.
Sanyo might emphasize its high-quality light pen system with the MPC-10 32K computer. Sony's HitBit 64K machine has built-in productivity software. Pioneer's Palcom PX-7 contains a video interface which mixes computer graphics and laserdisc images on the same screen. And the list goes on.
" Victor has an MSX machine [the 32K HC-6] that has an RGB transposing unit," says Hisogi. "You can actually take images created from a personal computer and superimpose them on an RGB monitor in conjunction with a videodisc player. It also has the capability to be used for a monitoring station to control your audio and video equipment."
In a recent demonstration at COMPUTE!, the Pioneer PX-7 MSX computer was interfaced with a laserdisc player. Using a joystick, you controlled a computer-generated space fighter (a sprite) while zooming through stunning scenes stored on the laserdisc. You could shoot at enemy spacecraft and maneuver through harrowing canyons on alien planets. It was like leaping into Star Wars. The images were every bit as good as those in the latest videodisc arcade games.
This screen photo from Step Up, a cartridge-based arcade game from GoldStar, shows an example of MSX graphics (the blurred images are fast-moving sprites which could not be frozen by the camera.)
The PX-7, by the way, revealed something else about MSX marketing strategy—it didn't resemble a traditional home computer at all. Rack-styled to match Pioneer's audio and video components, it looked more like a front-loading VCR or stereo receiver. To use it as a computer, you plug in a detachable keyboard on an extension cord.
Despite all the development work and market planning that has been invested in MSX, its success is hardly guaranteed. The U.S. home computer market is as volatile as it is lucrative; as many fortunes have been lost as won. In mid-1983, the sky seemed the limit. By mid-1984, the adolescent-like growth started leveling off as the industry matured. Experienced companies such as Texas Instruments and Mattel have been knocked out of the fight completely. Coleco is fighting an uphill battle. Atari, which had everything going for it two years ago, is severely weakened. Even mighty IBM, which seemed a shoo-in last year, stumbled embarrassingly in the home market with its PCjr. Is MSX a year too late? Why has introduction into the U.S. been delayed until 1985?
"All of them [the Japanese companies] had one thing in mind, and that was to cultivate their own domestic market-place—that's Japan," explains Hisogi. "The second reason, I believe, is because it's true that about the time MSX was introduced in Japan, the home computer market was going through a major shakeup, at least for the United States. I believe many Japanese manufacturers said, ‘Well, let's wait and see until the dust settles.’ "
As the U.S. marketplace continues to race along on its own course—with 64K home computers beginning to give way to 128K machines, and 8-bit chips to 16- and 32-bit CPUs—many industry observers still contend that memory limitations and dated technology will doom the new MSX computers before they even arrive. Hisogi disagrees: "I don't think the manufacturers that are bringing MSX machines into the U.S. will even try to market 16K or 32K computers. They already have 64K machines … and adding RAM is not a big deal. I would suspect that they will study the competitive environment here and determine that no one practically sells any 32K or 16K machines. And I believe they will try to match their configurations to the point where they can effectively compete."
Next month, Part 2 takes you inside MSX and reveals some of the technical features which make it a versatile, workable standard. We'll also analyze the performance of a typical MSX computer.