The $6.5 billion videogame industry is suddenly exploding with new gaming platform formats shaking up the marketplace for titans Sega and Nintendo.
A platform is the hardware system that drives the videogame software, and the latest is from Sony Corp. of America, which last week described its fast new 32-bit PlayStation machine, arriving in Japan this year and the U.S. next year.
PlayStation will collide head-on with the new generation of faster videogame hardware from Sega of America, Nintendo of America and others.
The rising cacophony of competition now includes upstart 3DO Co., which is racing to get as many as four new 32-bit-speed videogaming machines out by the holiday season, and struggling Atari Corp. with its speedy 64-bit Jaguar machine.
Then add to that millions of souped-up personal computers rapidly entering consumers' homes.
The PC threat is a new worry for videogame marketers. Most consumer PCs sold this year will feature CD-ROM drives and better sound, enhancing their game-playing capabilities.
"Sega and Nintendo are facing an explosion of new platforms, including PCs, which are a growing part of the gaming market," said Scot Ciccarelli, a videogame analyst for Gerard Klauer Mattison, New York. "But all of these platforms cannot coexist, and there's going to be bloodshed ahead."
While Nintendo and Sega deeply fear the arrival of home entertainment powerhouse Sony, apparently the client conflict issue has been resolved for Nintendo agency Leo Burnett USA, Chicago, which also handles Sony Corp. Sony said last week the new Sony Computer Entertainment of America division, created to market PlayStation, likely will be handled by Cliff Freeman & Partners, New York, agency for the Sony Imagesoft software development unit.
Anxiety is rising as marketers prepare for the Consumer Electronics Show in Chicago next month, where the latest systems will be unveiled. By next year, the current crop of 16-bit machines, including Sega Genesis and Nintendo Super NES, will be headed for extinction and new leaders may be in charge.
Nintendo, scorched last year by archrival Sega's zippy advertising and array of high tech videogame hardware add-ons-including the Sega CD and Virtual Reality units-vows to even the score. The marketer is amassing a powerful arsenal of new software and hardware, including a new exclusive partnership with Mortal Kombat developer Acclaim Entertainment.
Nintendo will try to regain the leadership position with its first major image ad campaign, set to break this summer from Burnett.
At the CES, Nintendo will unveil its long-awaited 64-bit system, code-named Project Reality, bowing in arcades this fall and shipping to retailers for home use late next year for less than $250.
But Sega this fall will one-up Nintendo again. Sega will offer a 32-bit add-on unit for its 16-bit Genesis machine to keep techno-junkies happy until its higher-power new videogame-code-named Saturn-arrives.
The $149 32-bit Super 32X is expected to hit retailers' shelves before Christmas, and Sega clearly expects it to make as big a killing as the Sega CD-ROM unit offered in late 1992 to Sega's core users.
The $229 Sega CD, pooh-poohed by Nin- tendo, is the key reason Sega leaped ahead of Nintendo in market share last year. In 1993, Sega scored a 57% share vs. Nintendo's 43%, according to NPD Research, Port Washington, N.Y.
Sega last month laid another new gizmo on the market, the $399 CDX, combining Genesis with the Sega CD in one portable module that also functions as a compact disc player.
In the midst of this scramble is Redwood City, Calif.-based 3DO, which tried to cut through the clutter of incompatible new platforms with an interactive home entertainment format that would allow people to interchange software between different units.
After its stock price peaked last October, 3DO has come under intense pressure. The only 3DO product to hit the market so far, the pricey $499 Panasonic Real 3DO Interactive Multiplayer, has had lackluster results, despite offering a "smart box" technology equal to 32-bit speed and 50 times faster than Sega Genesis or Nintendo Super NES.
But analysts aren't counting out 3DO yet. The company began talking directly to consumers last month in its first TV advertising, from Butler, Shine & Stern, Sausalito, Calif. And it's now offering more than 40 different CD-ROM videogame titles compatible with new machines coming this fall from various manufacturers.