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BATTLE BETWEEN NINTENDO, SEGA MOVES TO NEXT LEVEL VIDEOGAME KINGPINS TO SQUARE OFF IN JAPAN OVER INTERACTIVE TV

By Published on .

Videogame powerhouses Sega and Nintendo will continue to wage war as the battleground moves to interactive TV.

Nintendo early next year expects to start a videogame channel in Japan to compete with one planned by Sega Digital Communications-a joint venture of Sumitomo Corp., Itochu Corp. and Sega.

Both channels will feature previews of new videogames that viewers can play by connecting their existing videogame hardware to a telephone wire and a special adapter. Sega is now testing a similar service in the U.S.

Nintendo's system will be free to viewers; ads are expected to help cover costs, with the balance picked up by Nintendo, which sees the channel as a marketing tool.

Nintendo is working with Tokyo ad agency Dentsu to develop interactive ad formats for the channel.

In addition to games, Nintendo's channel is likely to include karaoke, English lessons, weather information and a TV program guide.

What Sega will charge for its channel and whether it will include advertising hasn't been determined yet. The U.S. version, now in test, costs about $12 a month and doesn't have ads.

Sega is also hoping to cash in on interactive karaoke. The company plans to start a karaoke network in December that would be available in bars and nightclubs and eventually in consumers' homes.

Sega hopes to sign up at least 20,000 subscribers initially and have 1 million singers participating on the network by the end of 1995.

The company expects to provide similar services in the U.S. and elsewhere in Asia.

"In the future, we plan to install host computers in the U.S. and southeast Asia and develop those markets," said Sega VP Shoichiro Irimajiri.

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