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Sega's Net-Capable Game Machine To Get Zipped

Japan's Sega Enterprises Ltd. has announced that it will team up with Iomega Corp. to jointly develop a Zip drive-based external data storage device to enhance its Internet-capable Sega Dreamcast home game system.

Sega's Dreamcast, which features advanced 3-D graphics and sound capabilities, is the first home gaming system to include Internet functionality. Via a 56K-bps modem installed in the Dreamcast unit's base, users can play games with other Dreamcast users online, send/receive e-mail, "chat," and browse the Web.

The Dreamcast system lists for 29,800 yen (US$250). It uses a 128-bit Hitachi processor, customized Microsoft Windows CE operating system, and 64-channel Yamaha sound system.

Launched in Japan on November 27, 1998, Sega sold more than 1 million Dreamcast units to date.

But while Sega was first to market with an Internet-capable game console, the Dreamcast's networking potential has been severely limited by the lack of a large-capacity data storage option -- something the 100-megabyte Zip drive will provide.

"This new product," said Iomega in announcing the signing of a letter of agreement, "will be designed to make Dreamcast the first gaming system versatile enough to bring world-class game playing, Web browsing, and e-mail together in an integrated system."

The price has not yet been determined, but Zip drive-compatible Dreamcast units may begin shipping late this summer. Sega chose to work with Iomega to achieve faster development and minimize the risk inherent in developing a disk storage system on its own.

The tie-up is seen by some as a crucial step for the survival of Sega.

Both Sony (whose PlayStation outsells Dreamcast by 10 to 1) and Nintendo are said to be developing advanced data storage and networking options for their own next-generation game machines, to be released later this year.

"Dreamcast represents a whole new way of thinking at Sega," said Hideki Sato, a Sega Enterprises senior vice president. " We will be able to enhance the potential of Dreamcast further due to the architectural partnership between Iomega and Sega."

With the new emphasis on Internet connectivity, Sega is also taking steps to boosting the online content targeted at Japanese Dreamcast users.

Dreamcast Direct, a home shopping service designed specifically with the needs and interests of Dreamcast console users in mind, will launch on April 27.

And a new Internet game site for Dreamcast users, this one featuring traditional games such as cards, shogi (Japanese chess), and mah-jongg, will open in the summer.

Several major record companies, meanwhile, including Warner Music Japan, Nippon Columbia, and Ponycanyon, have announced that they will sell multimedia CDs that include Internet access software for the Dreamcast system.

These so-called MIL CDs, the first of which are due to be released in July for 1,000-1,500 yen (US$8.40-$12.60) each, will contain music playable on an ordinary CD player, video clips of the featured artists viewable only on a Dreamcast console, and Internet connection software for Dreamcast users.

Net connections made using the software reportedly will be free for the first six months in the hope of luring more users online.

"The Internet strategy is very important to Sega," emphasized Bernard Stolar, president and CEO of Sega of America. "We are dedicated to doing something never before possible on a console -- to connect thousands of players together at one time under the same platform, and create a sense of'community' online for gamers.''

Stolar announced last week that Sega will release the Dreamcast system in the US on September 9, its first new US gaming system since it unveiled the Saturn five years ago.

In the US, Dreamcast will retail for $199, about $50 cheaper than its retail price in Japan.