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A new home computer standard?

A NEW COME COMPUTER STANDARD? The last time Electronic Arts' Trip Hawkins promised to "bet his company" on a new machine, it was the Commodore Amiga (Soft*letter, 10/31/85). Fortunately, Hawkins hedged his bet by keeping his developers busy on other platforms as well, so the Amiga's lackluster sales didn't have much impact on EA's fortunes. But now Hawkins has a new bet: 16-bit videogame machines. And, as usual, his bet raises some fascinating questions.

"I now believe the PC is pretty much a dead issue as a consumer market," Hawkins told us last week. Except for some home office applications, he predicts, the dominant platform for consumer software is likely to be some variation on 16-bit videogame machines, probably linked with CD-ROM technology.

Hawkins points out that the penetration of 8-bit videogame machines (which offer a relatively limited entertainment experience) has already vastly outstripped PC sales into homes. By the end of 1990, Hawkins expects the installed base of 8-bit machines (mostly Nintendos) in the U.S. to reach 30 million. "Just about every household that has a boy in it will have a machine."

More importantly, he says, a new generation of 16-bit machines seems likely to achieve even greater penetration by attracting adults and girls. Hawkins notes that the new 16-bit Sega Genesis has achieved first-year cartridge sales that will reach about a million units this year, a level that already makes the Sega market as big as the much older PC games business. (Moreover, Hawkins points out that there are currently only about 40 titles competing for consumer dollars in the Sega market, compared to over 500 PC entertainment titles, so the videogame business is potentially more lucrative.)

As videogame players become increasingly powerful, Hawkins also expects to see a shift away from cartridge media. "CD-ROM technology will become the primary storage medium for next-generation videogame machines," he predicts. Currently, the high production costs of cartridge titles "forces companies to focus on the core of the market," he adds. "CDS are cheaper to make, so it will be cheaper to explore new markets."

Hawkins' own company--which recently became a Nintendo licensee and has started development work on Sega titles--is poised to take advantage of the videogame market, Hawkins promises. "We want to be the leader when the next generation takes off." It's less clear how a robust videogame platform might affect the rest of the industry. Will videogame machines acquire keyboards, more internal memory, and other PC-like features? Will this huge installed base of consumer hardware turn out to be a significant multimedia environment? Will next-generation videogame machines even become the standard platform for (gasp) school software?

We haven't a clue how this scenario will really play out, of course. But if Trip Hawkins has bet on the right platform, the consumer software business may be due for some real surprises.
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Copyright 1990, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:16-bit video-game machines
Publication:Soft-Letter
Date:May 7, 1990
Words:477
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