The Amazing Video Game Boom

Kid stuff has become serious business as Hollywood and Silicon Valley race to attract a new generation to the information highway

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The most closely watched video-game event of the season is not a game at all, but the arrival of a new game player. Next week Panasonic will introduce a VCR-size black box called REAL Multiplayer, designed by the hot Silicon Valley start-up company 3DO. With a 32-bit processor, packing twice the punch of the 16-bit Super Nintendo and Sega Genesis systems, and two special-purpose graphics chips, the Multiplayer is the most powerful video-game system ever marketed to the home. That in itself is no guarantee of anything. Other companies have tried and failed to use sheer power to steal the hearts and minds of the Nintendo generation, and this machine carries the added disadvantage of a price tag seven times as large as that of a Sega or Nintendo. But the industry -- and Wall Street -- is taking 3DO seriously, in large part because the company is backed by some of the biggest players in the information-highway business and headed by one of America's most charismatic entrepreneurs.

Trip Hawkins, founder and chairman of 3DO, was one of the first to see that Hollywood and the video-game industry were headed toward a happy collision. With his salesman patter and show-biz smile, he has for years been telling anyone who would listen that video arcades were more popular than movie houses -- and he would rattle off the numbers to prove it. As chairman of Electronic Arts, a leading maker of video games (and the first to treat its programmers like rock stars), he also railed against the electronics industry for failing to agree on a single video-game standard -- a failure that kept the industry locked in the Beta-versus-VHS stage. When nobody appeared interested in building the machine of his dreams, he set out to build it himself. He kept thinking, he says, of an old New Yorker cartoon showing two vultures sitting glumly on a limb. "I'm sick and tired of waiting," one says to the other. "Let's go kill something."

Hawkins set out to combine the visual power of a Hollywood movie with the interactivity of a video game. His solution, whether it succeeds in the marketplace or not, points in the direction that all interactive media are likely to go.

Hawkins will sell his games on compact discs -- the same silver platters that have taken over the music business and been adapted as storage devices for machines built by Sega, Philips, Commodore and all the major computer manufacturers. But unlike most of his competitors, Hawkins sees CDs as a temporary solution. Ultimately, he says, interactive motion pictures will be delivered to home game machines not on a disc but through the fiber-optic networks being built by cable and telephone companies. This summer he announced plans to sell a new version of the Multiplayer that plugs directly into a coaxial cable, where it can serve both as a cable TV and VCR controller and as a gateway to the information highway.

It was in part the clarity of Hawkins vision of that highway, and how video games fit on it, that made him so attractive to investors -- and to more than 350 of the cleverest video-game designers in the business. His early backers include AT&T, Time Warner and Matsushita (which owns Panasonic and Universal, one of the biggest Hollywood studios).

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