Nec, sega see bright future in more-sophisticated gaming

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In the videogame wars, NEC and Sega are taking two different strategies to win over new customers and keep old ones wanting more: NEC is relying on its cutting-edge CD-ROM technology while Sega's emphasis is on developing exciting videogames that every kid wants to own.

Now that NEC, Sega and Nintendo all have introduced 16-bit systems, says Nancy O'Brien, marketing manager at NEC, the next push will be the CD-ROM player, a device that NEC was the first game manufacturer to market in late 1989.

Speaking at the InterTainment '91 seminar recently held in Los Angeles, O'Brien predicted, "By 1994, the preferred format will be CD-ROM" because of the format's ability to offer greater realism.

Games on CD-ROM (compact disc with read-only memory) can use live-action video and computer graphics to create a realistic picture, but they are expensive and take much more time to produce than cartridge software. In addition, CD-ROM players cost more than twice as much as most cartridge players. NEC's CD-ROM accessory to its base unit was introduced in 1989 at $399, which was dropped to $299 last year. Its base cartridge unit costs $99.

"Price is a potential barrier," O'Brien says, "and many parents won't go higher than $100 for a player." However, NEC's CD-ROM sales have tripled since the price reduction, she notes, estimating that 50,000 players have been sold in the U.S. and 500,000 have been sold in Japan.

Sega's director of marketing, Al Nilsen, predicts an "explosive growth period for videogames, and there's not much inventory out there." The company will have 150 titles for its 16-bit Genesis system in stores by Christmas to satisfy the demand.

Instead of concentrating on new game-player units, Nilsen explains, the company is focusing on improving the games themselves, for both CD-ROM and cartridge formats.

As an example, although San Francisco 49er quarter-back Joe Montana is sidelined for the season, Sega's Joe Montana's Football videogame is getting jazzed up. The improved game, called Joe Montana II: Sports Talk Football, features a digitized continuous play-by-play voice, 50 offensive and defensive plays, instant replay and full player statistics. The new game is scheduled to be in stores by Thanksgiving.

Introduced last December, Joe Montana's Football has sold 250,000 units. This year, however, Sega's Sonic the Hedgehog has sold 400,000 units, becoming the company's biggest-selling game ever. Sonic has been on store shelves since mid-June.

"Consumers need a reason to buy, and software has to be a |must have' item," he says. "We're committed to enhancing the game-play experience."

Nilsen says Sega plans to launch a CD-ROM adapter unit in Japan this month, priced at $340. The adapter connects to Genesis game units and will be introduced in the U.S. at January's Consumer Electronic Show. A price has not yet been determined for the U.S. market, but plans are to begin shipping by mid-1992.

"Consumers are different. Some want to buy CD-ROM adapters because of the technology aspect," he explains. "Others need great software. The adapter allows them to do both."

The company does not have any CD-ROM software ready to go into stores, Nilsen says, but it has a "major effort" under way to develop games to fit the technology.

The Genesis cartridge system retails for $149, repriced from its original $189. Nilsen notes that "sales have gone through the roof," with some retailers reporting that the system has outsold the new Super Nintendo Entertainment System (Super NES) by two to one.

"CD-ROM is not going to take over cartridge sales overnight," he says. "It will be more of an evolution than a revolution."

PHOTO : * Sega adds second Montana title to videogame lineup.