Popular upstart challenges leader

GENESIS TRIES TO ZAP NINTENDO A

December 10, 1992|By Boston Globe Staff Writer Michael Dresser contributed to this article.

The biggest battle of the sequels in entertainment history i ringing in the Christmas green. And, surprise, "Home Alone 2" isn't one of the contenders.

Genesis, Sega Enterprises Ltd.'s video game, which is home to Sonic the Hedgehog, one of the highest-profile rodents since Mickey Mouse, is again challenging the Super Nintendo Entertainment System.

And Nintendo Ltd.'s system, starring the acrobatic Super Mario, is struggling to retain that company's leadership of the home video game market.

Super Nintendo was first available last Christmas. But Genesis won over many recession-battered shoppers who were not as crazy as retailers had hoped about either of the expensive systems, which play plug-in game cartridges over a standard TV set.

Genesis, sold since 1989, was by this time last year outselling Super Nintendo 2-to-1, based on its $150 price, which was $50 lower, and its availability of 159 game cartridges, compared with Nintendo's 25.

But this year, both systems could hit the sales jackpot. The video game industry projects sales of $5.9 billion, compared with $4.4 billion last year. For the first time, dollar sales of 16-bit systems such as Genesis and Super Nintendo are expected to surpass eight-bit systems, a nearly decade-old technology, with less computer memory and thus slower and duller games and less-animated graphics.

"Sixteen-bit is a comfortable technology now," says Glenn Rubenstein, who, at age 16, is an industry consultant and video-game columnist for the San Francisco Examiner and for Wizard magazine.

And since last Christmas, price cutting by both companies and a proliferation of game cartridges available for both systems hasmade all the difference.

But Sega has beaten Nintendo to the punch again this Christmas, with its $299 accessory CD-ROM (compact disc-read-only memory) player -- among the costliest game hardware yet -- that can incorporate live video footage, in another leap to storing information other than sound on compact disc.

Sega's CD system has sold out of shipments of 70,000 units sinceits introduction three weeks ago, the company says -- and has generated a buzz even among fans who won't find one under their Christmas tree.

In the Baltimore area, some stores have it; others don't. At the Electronics Boutique in White Marsh Mall, a sales associate said the CD-ROM system was out of stock and "hard to get a hold of" but said he expected a shipment next week. At Babbage's in Columbia Mall, the item was in stock.

Sega's Sonic the Hedgehog 2, a 16-bit game cartridge introduced Nov. 24 amid a $10 million ad blitz, sold more than 400,000 units -- $20 million at retail -- in its first week. That's half again as many units as any other 16-bit game has sold in its first week, Sega says.

Baltimore-area stores said that they were seeing brisk sales of Hedgehog 2. Supplies were holding out better than in other parts of the country.

Even more scarce, Baltimore retailers said, was JVC's "Super Star Wars," a popular game that runs on Super Nintendo. Neither Babbage's nor Electronics Boutique expected more before Christmas.

Nintendo, meanwhile, says its Super Nintendo 16-bit hardware system is outselling Sega Genesis. But once hype gives way to actual sales receipts, it's "just about even," said Jim Silver, associate publisher of The Toy Book, a trade publication.

Random checks of retailers that stock both, including Kay-Bee Toy Stores, the nation's No. 2 specialty toy retailer, confirm a close race.

Nintendo retains greater recognition because of the 30 million Nintendo 8-bit systems sold in the United States by this year. The brand is also carried by 17,000 stores, nearly twice as many stores as for Sega. Nintendo ended 1991 with 70 percent of the video market, compared with Sega's 20 percent. But Sega's 16-bit and CD-ROM scoops "make it the leader, in the mind of many consumers," says Tom Alfonsi, video game buyer for Pittsfield, Mass.-based Kay-Bee.

No matter who wins this year, retailers -- including Wal-Mart Inc. and Kmart Corp., the nation's two largest -- are counting on video games to prime their share of what appears to be a robust rebound in holiday spending.

A rebound may especially bless the $10 billion toy industry, which didn't fare badly even during the recession's nadir. And Sega and Nintendo hardware, including a Nintendo-associated cartridge named Street Fighter 2 (in which players may set their enemies on fire) were the industry's top five toy items last month, based on dollar volume.

"Not only are they the hottest thing: It's another way we'll get people into the stores to buy other toys," says Kay-Bee's Mr. Alfonsi. Video game sales at the 1,300-store chain are up 20 to 30 percent over last year.

Sega and Nintendo's success with 16-bit systems has been a task at which even the dutiful Mario might cringe. The companies sold a combined 3.7 million systems last year, and both companies claimed to own two-thirds of the 16-bit market.

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