Welcome to Chieftain Inc.'s nightmare or, more specifically, its video board game called Nightmare. Its backers are calling the Australian product the hottest game since Trivial Pursuit, and they'd like to see video stores share in the excitement.

Gene Murtha, general manager of Chieftain, a U.S. company recently formed by the Canadian game company Chieftain Products, says Nightmare was introduced to the U.S. market at the Toy Fair in February and is now available at national retailers such as Wal-mart and Toys'R'Us. A $2.5 million TV advertising campaign is planned for the fourth quarter, including spot buys in major cities.

Murtha draws a sharp distinction between Nightmare and the board games that preceded it in using a videocassette as part of the game play.

Earlier games, he says, "did not have a big impact because the cassette was simply plugged in to the existing game mechanics. The designers said, 'How can we use a video with this?' It was a gimmick. But, in Nightmare, the video is part of the entertainment. The game was built around the video production."

In Australia, where it went on sale last September, Nightmare has sold 100,000 units. Most games there sell 10,000 to 20,000 units. In a test marketing in Toronto last year, it sold 40,000 units in three months. Murtha says Chieftain expects orders of more than 1 million in the U.S. this year.

As with many board games, the object is for players to advance their token by a roll of the dice through a landscape littered with obstacles. With Nightmare, the setting is a graveyard, and the two to six players represent occult beings: a vampire, a werewolf, a zombie, a witch and so on.

The obstacles consist of hazards on the board itself and the stacks of cards labeled Time, Fate and Chance. The cards impose various tasks with a system of rewards and punishments. Players must also collect six keys that protect them from harm. The first player to gain all of these keys and reach the center of the board safely before the tape's 60-minute running time has elapsed is the winner.

But to describe the mechanics does not capture the spirit of Nightmare. What sets it apart is the chillingly grim but fiendishly comic on-cassette host called Tbe Gatekeeper, a figure who resembles the ghoulish narrator of the old EC horror comic Tales From the Crypt.

Seen only in closeup on the tape (produced in 35mm film), The Gatekeeper bellows his commands at the players like a drill sergeant from hell. Picking on "the next player to roll the dice" or "the old one" or "the young one," he sets some new obstacle that costs a player a turn or a visit to "the black hole." As the game progresses, the punishments grow more onerous, and The Gatekeeper's face turns more hideous.

One advantage of Nightmare is its one-hour time limit. But the tape could also become overly familiar with repeated play. Murtha says Nightmare II is in the works and will be hosted by the zombie character from the original. That tape will be available separately for consumers who already have the board and game pieces. The company plans to eventually have each of the six characters host a Nightmare game.

Murtha, whose background includes a stint with the game company Selchow & Righter, which marketed Trivial Pursuit in the U.S. for Chieftain, predicts Nightmare has the potential to be more popular than that trend-setting quiz game. "That's one reason we set up a U.S. company," says Murtha. "We're confident it will be extremely popular."

Chieftain does not set a suggested retail price, but Murtha notes that most stores are selling Nightmare for $39.95 to $49.95. Zombie: Nightmare II is scheduled for Nov. 1 release. A company spokesman said stores would probably sell it for $24.95 to $29.95.

Murtha says Chieftain is just starting to explore distributing Nightmare to video stores, "but it's a market we covet. We think it could become very important for us." He believes the young teen audience that enjoys the exploits of Freddy Krueger on video will find The Gatekeeper equally appealing - and appalling.

Retailers seeking more information may call Bob Chamberlain at Chieftain in Simsbury, Conn. (203) 651-1950.