Sega-Microsoft home video deal reported Next-generation player said to be the goal

Fun and games

September 09, 1997|By BLOOMBERG NEWS

TOKYO -- Sega Enterprises Ltd. shares rose 5 percent yesterday after a Japanese newspaper said the game-maker will develop a next-generation home video-game player with Microsoft Corp.

A Sega spokeswoman declined to confirm or deny the report. She said her company has been in talks with Microsoft, the world's biggest software maker, "to explore the possibility of tie-ups." She declined to elaborate.

Officials at Microsoft weren't immediately available to comment.

The Nihon Keizai newspaper said Sega and Microsoft will likely sign an agreement in October to jointly manufacture and sell 128-bit game players that will be 10 times more powerful than Saturn, Sega's current top-of-the line machine.

Such a move would pit Microsoft, the world's largest software maker, against Nintendo Co.'s 64-bit Nintendo64 and Sony Corp.'s 32-bit PlayStation in the $15 billion-a-year global video-game market.

Reinier Dobbelmann, an electronics analyst at SBC Warburg Japan Ltd., said it's unlikely Sega would develop a 128-bit machine because it would be too expensive to mass produce a model with those specifications.

"They're considering a number of different things, but nothing is finalized," Dobbelmann said. "Sega's been talking to Microsoft since 1994 and nothing has really come of it."

Sega rose 180 yen to 3,730 in trading of 264,500 shares.

"We're always trying to develop new video-game players. Though we can't say when one will come out," said the Sega spokeswoman, who declined to be identified.

Nikkei said the new Sega machines will use Microsoft's Windows CE operating system, enabling their software to be played on personal computers.

The machines are expected to sell in Japan for about 30,000 yen ($250), the newspaper said.

Pub Date: 9/09/97

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