Thursday, May 13, 1999 Published at 08:39 GMT 09:39 UK
Nintendo intensifies video games battle
Nintendo's Star Wars: the big three console makers are now in game wars
The real-life battle for video game supremacy escalated on Wednesday with Nintendo saying they will launch a powerful new games console by the end of 2000.
Nintendo announced it has agreements with electronics giant Matsushita to provide DVD players and IBM to provide microchips for its new machine.
"The published capabilities of Nintendo's machine are greater even than the next-generation Playstation," says James Snodgrass, deputy editor of Stuff magazine. "And if it has a fully-functional DVD drive, it will have an advantage over the other two machines."
But Nintendo are far behind Playstation in market share and may find it difficult to catch up.
"There are now four million Playstations in the UK and most are less than 18 months old," Mr Snodgrass told BBC News Online. "I'm not sure how many people are going to want to upgrade so soon."
However, he confidently predicts: "There will be a price war."
Sega have already launched their 128-bit machine, Dreamcast, in Japan last November. It will go on sale later this year in the UK at £200, the lowest ever starting price for a new generation machine.
Driven by DVD
Nintendo have revealed that the new console will load games using DVD technology. Matsushita Electric, the company behind the Panasonic, Quasar, and National brands, will supply the DVD hardware.
Putting games on DVDs marks a big change for Nintendo, which until now has used specialized cartridges in its game players. These are fast to use but expensive to manufacture, meaning they are less popular with game developers.
Compact discs and DVD's are cheaper to make and Sony's decision to use CDs was seen as a major reason for the worldwide success of its PlayStation.
Matsushita and Nintendo also said they will collaborate on other home electronics products. This could include a machine that both plays games and shows movies.
"A £200 DVD player is an attractive proposition in its own right," Mr Snodgrass told BBC News Online. "If it can play games as well, its an incredibly attractive proposition."
IBM will build 400 megahertz PowerPC microchips for the console. This is faster than Sony's planned Playstation II, which will run with a 300MHz chip.
However, other technical aspects of the devices will affect performance and Nintendo say their new console will have an 200MHz graphics chip, rivalling its Playstation II equivalent, the emotion engine.
The Nintendo-IBM deal alone is believed to be worth $1bn, though the companies would not confirm this. The value of Nintendo shares rose sharply on Wednesday in response.
Sony and Sega have already made similar link-ups with Toshiba and Microsoft respectively. The companies are not only competing for slices of the annual $6bn game market but for new hybrid technologies.
The next generation of game machines is likely to offer Internet connection and music and video entertainment. The Nintendo-Matsushita link-up is particularly promising and they say they will co-operate on other "digital network-related products and services".