Sony Tackles Hard Job of Making Software : Entertainment: SEP will play a key role in its parent’s effort to conquer the new and highly contested field known as interactive multimedia.

As Sony Corp. pursues its grand vision of marrying consumer electronics hardware and entertainment software, most of the attention has been focused on the expensive acquisitions of CBS Records and Columbia Pictures.

But the third piece of Sony Software--a recently formed unit called Sony Electronic Publishing (SEP)--may have an even more direct impact on the success or failure of specific new hardware products. And over the long haul, SEP will play a central role in Sony’s effort to conquer the new and highly contested field known as interactive multimedia.

SEP and its unlikely president, a 28-year-old Icelandic novelist and physicist named Olaf Olafsson, clearly have their work cut out for them. For starters, SEP must buy and develop software for a portable information access device called the Data Discman, for a new video game machine called the Play Station, and for the personal computer data storage devices known as CD-ROMs.

The Data Discman, scheduled to be released for the Christmas shopping season, will be a kind of electronic bookshelf, enabling users to call up information from a disc that contains an encyclopedia or a cookbook or a movie guide. Bringing out this software is mainly a question of cutting deals with book publishers, and Olafsson says about 20 titles will be available initially.

Things get more complicated when it comes to machines that, unlike the Data Discman, can handle pictures, sound and even motion video in addition to text. An encyclopedia designed for this kind of device might feature not only a description of, say, an elephant, but also a picture of one running across the savannab, complete with soundtrack.

Computer and consumer electronics firms have been trying for years to figure out how to make and market such a multimedia machine, and a slew of novel offerings are now hitting the market.

Many personal computer companies have lined up behind a set of specifications for a “multimedia” PC, which features sound and graphics capabilities and a CD-ROM player.

In the consumer electronics world, much of the attention has been focused on a technology known as Compact Disc-Interactive (CDI), which is being spearheaded by Philips. Scheduled for release in October after numerous delays, the CDI machine will hook up to a TV set and offer a range of educational and entertainment software. Commodore has a similar system, known as CDTV, on the market already.

While Sony has pledged to support CDI, the new Play Station game machine and a successor to the Data Discman known as the Bookman will offer some of the same capabilities and will probably cost much less than the $1,000 to $1,400 CDI player.

All of these products are strange beasts from the consumer’s point of view, and it will take both compelling software and clever development of distribution channels to make them a success.

Sony Electronic Publishing has several things going for it in this complicated fray. In developing games and other entertainment titles, it can benefit from tie-ins with movies from Sony Pictures and music from Sony Music. It can count on its parent for top-notch hardware, and it can take advantage of Sony’s well-developed distribution channels, since the software will be sold along with the hardware.

Yet Sony has never demonstrated that it can develop its own software, as opposed to buying it from existing firms. Indeed, SEP was built through the acquisition of several electronic publishing and game software companies.

But unlike the record and movie businesses, electronic publishing is a nascent industry where clear leaders have yet to emerge. And Olafsson has the daunting task of proving that Sony can build a software business as successfully as it builds hardware.