Newspaper article St Louis Post-Dispatch (MO)

Video Game Wars Heating Up Game Makers Now Face Competition from Pcs

Newspaper article St Louis Post-Dispatch (MO)

Video Game Wars Heating Up Game Makers Now Face Competition from Pcs

Article excerpt

The video game wars are escalating to another level, with the combatants, much like those in the games, coming out with more sophisticated weapons.

There's also a new enemy attacking on their left flank.

Although big game makers like Sega and Nintendo are expected to have business in the billions of dollars this Christmas, sales are slowing. Consumers, demanding greater power and snazzier graphics, are cooling toward 16-bit game machines. That, plus the entry of smaller players into the market, is forcing Sega and Nintendo to produce the next generation of equipment.

Meanwhile, personal computers, increasingly being used for game-playing, are taking business away.

Industry leader Sega is playing tough to stay on top. In his office at Sega of America, Chief Executive Tom Kalinske put a videotape in his VCR recently and played what he gleefully called a "really nasty" commercial.

The ad, set in a morgue, showed a teen-ager identifying his other-brand video game player, described by an announcer as "cold and stiff."

Burial or cremation? the attendant asked.

"Burn it!" snapped the teen, who's switching to Sega.

"Isn't that fun? I love that," Kalinske said.

Sega's ads with an attitude are part of the company's marketing plan.

Sega is counting heavily this Christmas on its new Genesis 32X, an add-on device that upgrades its basic Sega Genesis and Sega CD players. The company, based in Tokyo, also plans its next-generation Saturn game player. U.S. distribution is set for mid-1995.

Industry observers say it's uncertain who, if anyone, will come out on top of the evolving video game industry.

Nintendo plans new hardware next year. Both it and Sega are facing growing competition from makers including 3DO Co., Atari Corp. and Sony Corp.

Then there are personal computers with CD-ROM drives. Many people buying PCs to link into the Internet are using them to play games like "Myst" and "Doom II." And more computer software is aimed at children and teens, the biggest group of video-game players.

But analysts think Sega could stay on top, given its strengths: good technology, attention to consumers, shrewd marketing and clever advertising. …

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