Sega Set to Create Baby Day Traders

Tokyo-based Sega Enterprises announced yesterday that it has forged an agreement with brokerage firm Nomura to add share trading to its roster of online games. The announcement is Sega’s latest attempt to bring e-commerce onto its cheap Internet access platform.

Beginning next month, Nomura will provide Japanese users of Sega’s Dreamcast gaming gear with software that will allow them access to its Home Trade online trading web site. The arrangement is expected to extend Nomura’s reach into the Japanese retail market.

A Low-Cost Internet Console

With Dreamcast, Sega may have — inadvertently or not — created the first massively popular, inexpensive Internet access platform. Dreamcast sells in the U.S. for $199 (US$), roundly beating the $500 minimum for a personal computer.

Dreamcast’s 128-bit architecture makes it the first of the new generation of video games, leap-frogging Sony’s PlayStation and Nintendo 64. Sony and Nintendo are expected to introduce next-generation consoles in 2000. Sega’s Dreamcast comes with a 56K modem and has four times the graphics processing power of a Pentium II.

Launching with Big Sales Numbers

Initial sales for Dreamcast, which was released on September 9th, surprised industry experts as well as Sega itself. After a big media buildup, Sega sold over 500 units in the first two weeks. The goal is to sell 700,000 consoles by year-end. The Interactive Digital Software Association says that online gaming is expected to surge to 26.8 million users by 2002.

The AT&T WorldNet Connection

Sega has been lining up partners in a manner that indicates a larger ambition for e-commerce. Last month, Sega signed an alliance with AT&T to provide Internet service for Dreamcast. The agreement allows Sega to market Dreamcast to AT&T WorldNet customers. In addition, AT&T has developed an access plan that includes a free keyboard to make Dreamcast even more surf-ready.

Big Plans for Internet Opportunities

Sega is also partnering with other companies in the U.S., Japan and Europe to leverage its Internet connection. In the U.K., Sega is working on a promotion deal with BSkyB and soccer sponsorships. This arrangement is expected to lead to soccer merchandise sales over the Internet.

Sega has ambitious plans to take the next generation of games straight to the Internet. “Sega is determined to expand its Internet infrastructure, including the use of broadband service and cable delivery,” said Isao Okawa, chairman and CEO of Sega Enterprises, Ltd.

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