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AT&T Spending $5(m) on Video Games
From: Paul Robinson <TDARCOS () MCIMAIL COM>
Date: Sat, 31 Jul 1993 12:04:59 -0400 (EDT)
Summary from {Washington Post}, Page D8, July 29: In "Game for a Multimedia Opportunity" Cindy Skryzcki describes AT&T's purchase on July 28 for US $5 million of a 20% stake in the Sierra Network, a computer system that allows users to play games against each other; the description was that the network resembles "an electronic amusement park." The photograph above the article shows a fuzzy image of several buildings in a park setting, apparently taken off of a computer screen. As part of the deal, the network has been renamed ImagiNation Network Inc, and AT&T, which has the right to obtain a controlling interest, said it would spend at least another $3 million to develop more programming for the system. The article says this is part of AT&T's strategy "to be a major player in an emerging industry called multimedia, where computers, communications technology, consumer electronics and entertainment converge." AT&T is involved with other game related companies including 3DO, Sega and PF Magic. Sierra's interest is what AT&T can provide: the phone network which can allow much better interactive entertainment; the other two things needed are the programming and the delivery into the home. "AT&T is now working on all three." The other reason for its owner to be interested is the $12 million it has spent on the system and was still losing money. AT&T has gotten involved in a number of ventures, including video phones, personal communicators (which merge a fax machine, cellular phone and E-Mail), video-on-demand and interactive shopping. AT&T has done a "major management reorganization" and was surveying its employees "to find out if there was a market for interactive programming using regular phone lines." AT&T is also working on a special modem to send voice and data simultaneously. (Isn't that what ISDN is supposed to do?) But apparently AT&T doesn't want too much read into this move; an AT&T vice president said it is not "AT&T's definitive move in interactive networks" but AT&T is talking to Hollywood about some things that could be done. The owner of the system is a small California Company called Sierra On-Line Inc., which made US $43 million in revenue last year. Another 20% of the system was also sold for US $5 million to General Atlantic Partners, a New York investment firm. Sierra has also signed an agreement with Prodigy to allow its two million subscribers access to Sierra's games. SIDEBAR: Here are some of AT&T's 1993 investments in interactive multimedia: Jan 7: Joins with other companies to form 3DO to create interactive Compact Discs; Jun 1: Creates Video Server as a means to provide video on demand; Jun 2: Joins with Viacom to announce plans for two-way cable to allow services such as video on demand; Jun 3: Joins with Sega to make video games accessible via phone lines; Jul 28: Buys 20% of the Sierra Network. Analysis of the situation: A few years ago some other company did the same thing, e.g. allow people to connect to a system and access video games and the equivalent. The company went bankrupt because people couldn't see paying a monthly fee for access to video games when you can purchase them once. Access to other people might be more valuable, I'm not sure. I don't know if this sort of thing is capable of being done on a paying basis. I do know that if it is, it has to be low enough in cost to encourage people to use it, yet not so low that the operators can't make a profit on it. Paul Robinson - TDARCOS () MCIMAIL COM ------------------------------
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