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E3 Spotlight Is Nintendo’s

Nintendo of America stole the spotlight from console game industry leaders Sega and Sony at the Electronic Entertainment Expo (E3) with the unveiling of its next-generation game system that will include technology from IBM and Matsushita.

Nintendo said at a pre-E3 press conference that its next-generation game console, dubbed Dolphin, will launch next fall with an IBM CPU and DVD drive, and media from Matsushita.

The news served to steal thunder from Sega’s Dreamcast and from Sony, which was heading to E3 with a strong buzz about the ability of its next-generation system, tentatively called PlayStation II.

Nintendo of America chairman Howard Lincoln said the target was for Nintendo to deliver Dolphin at the end of 2000 at a price that belied its power. “Dolphin will be extremely powerful, but not expensive. It will retail at a mass-market price, and so will its software,” Lincoln said.

To produce the machine Nintendo has turned to IBM to develop an enhanced PowerPC-based processor, in a deal valued at $1 billion by IBM, and to Matsushita to develop and supply the DVD drive and media. A custom graphics chip is being developed by Palo Alto, Calif.-based ArtX.

The CPU, called the Gekko Processor, will be manufactured in IBM Microelectronics’ Burlington, Vt., lab and will run at a clock speed of 400MHz.

The custom graphics engine being developed by ArtX uses DRAM technology and will run at a 200MHz speed. Memory bandwidth, the companies said, will be 3.2GB per second.

“Dolphin games will be DVD, not ROM cartridges,” Lincoln said, unlike current Nintendo 64 games, which are costlier to develop.

Sega was the only company with production next-generation systems at the show. The company confirmed that Dreamcast will arrive September 9 at a suggested retail price of $199. The system will ship with a 56K modem, but it will not include a pack-in game or the Virtual Memory Unit (VMU) – a business card-sized 128K memory card with a built-in LCD screen that enables Dreamcast to be used as a stand-alone portable game.

Sega sales VP Chris Gilbert said the company will also launch an online network, called The Sega Dreamcast Network, but the company has not announced which ISP it will use. In addition to playing online games, Dreamcast Network subscribers can access the Internet, send and receive e-mail, and access chat and discussion rooms.

Gilbert said that 15 Dreamcast games will be available at launch, including first-party titles such as Sonic Adventure, Virtua Fighter 3tb, NFL 2000 and NBA 2000. Games from third-party developers include Soul Calibur from Namco, and Mortal Kombat Gold and NFL Blitz 2000 from Midway.

Sega has a $100 million marketing and promotional budget for Dreamcast, said Gilbert, adding that the company already received 60,000 pre-orders for the system – and could hit 300,000 by the time it ships in September.

Sony made the unusual decision to allow showgoers to play its PlayStation II but not actually see the device, which remained shrouded in mystery beneath a pyramid-shaped display.

Sony’s main focus for the show was new games for the current PlayStation console, which has sold more than 19 million units in North America, according to the company. Sony expects another 7 million units to be sold by March 2000.

New PlayStation games on display at E3 included: Ape Escape, a 3D action/platform game; Gran Tourismo 2, a sports racing title; Omega Boost, a 3D shooter slated for September; Tarzan, an action platform game; and Um Jammer Lammy, a Parappa the Rappa-style musical title.

The show took place against a backdrop of record industry sales. The Interactive Digital Software Association (IDSA) said a recent survey of IDSA executives indicates that console software will grow 15% to 25% this year, with PC games up 10% to 15%. Nintendo, in fact, predicts total industry revenues could reach nearly $7 billion by year’s end.