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Sony, Nintendo Sleeping Easy

May 14, 1999

LOS ANGELES (AP) _ With Sega’s latest foray into the $6 billion video game market on display at the industry’s annual gathering attracting hordes of eager gamers, you might think rivals Sony and Nintendo are looking nervously over their shoulders.

Not even close, according to representatives for both companies at the Electronic Entertainment Expo.

Nintendo stole a bit of Sega’s thunder earlier this week, announcing a deal with IBM and Matsushita to create the technology for its next generation console, a 128-bit device currently code-named Dolphin.

In March, industry leader Sony announced it would begin selling the so-called PlayStation II, a DVD-based system which is comparable to the Dolphin’s computing muscle and twice as powerful as Nintendo’s current model, the cartridge-based N64.

And Sony has one huge advantage over its rivals _ all the current PlayStation games work fine on the new machine.

Both products should reach the market late next year, and both use DVD technology as a software medium. ``There won’t be any significant difference in graphics quality,″ said Howard C. Lincoln, chairman of Nintendo of America Inc. ``The fight will be over who can make the best games.″

Prices have not been announced for either machine. The Dreamcast debuts in September for a suggested retail price of $199.99.

Both the PlayStation and N64 currently retail for $129.99, with Sony on top mainly because it has far more games available than Nintendo. Sony charges about $10 a game as a licensing fee, about half Nintendo’s rate, which attracts developers. Also attractive is PlayStation’s CD format, easier to work with than the cartridge Nintendo uses.

Sony, which controls about 60 percent of the U.S. market to 30 percent for Nintendo and about 5 percent for Sega, has few concerns.

``″Industry experts are not generally supporting Dreamcast.″ said Sony vice president Phil Harrison.

Visitors to Sega’s vast display, featuring dozens of hands-on Dreamcast players, gave mixed reviews.

``It’s OK,″ said Joel Goodman of San Diego, as he tried to avoid extermination while playing ``House of the Dead 2.″ ``It’s got high resolution, but I don’t know how it will do against PlayStation II.″ Goodman said he would rent the machine before deciding if he wanted to purchase one.

Christian Magat, 19, of Gardena, was much more positive.

``It’s a great system,″ he said as he pounded on a friend in a Dreamcast version of Virtua Fighter. ``It’s like getting arcade games at home. I have two ordered.″

Perhaps the real question is: How does Sega, whose PlayStation rival Saturn sank like a stone, plan to compete with its bigger, already-entrenched rivals?

It will be the first on the market, giving it time to gain valuable market share. It will also be the first Internet-ready home console, allowing gamers to go online, play against others a continent away and even send e-mail.

However, Electronic Gaming Monthly editor John Davison thinks Sony, with a PlayStation in one of every five American homes, will remain the boss after all the latest systems are in stores. ``As long as Sony prices PSII carefully, they will clean up.″

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