The (Internet) Game's the Thing

Forest LINTON

Almost everyone agrees that Japan has not made much of an impact on the worldwide software market. At least, not yet. Many wonder, too, whether Japan will be able to compete in the global online services market, but I believe that there are several areas in which Japan could easily capture a large chunk of business.

A few months back, I discussed Japan's potential for becoming a major player in online publishing. That column discussed the huge potential market for Japanese animation, but another "killer application" for Japan could be online gaming. American startups like TEN are trying to create online gaming networks, but it is the Japanese companies that rule the current home gaming markets. This gives Japan the inside track in future gaming systems.

Every day, high-speed bandwidth is more of a reality as the data infrastructure expands and becomes available to the common man. At least, that is what the Japanese game makers are betting on. All of the big gaming companies -- Sega, Sony, and Nintendo -- are involved in new online projects.

Sega recently announced that it will introduce a kit for connecting its popular Sega Saturn to the Internet in Japan. The kit, which will sell for JPY14,800, includes software and a 14.4K-bps
modem. With it, users will be able to access the Internet, browse the World Wide Web, and also allow play against other gamers across the Net.

Sega and Mitsubishi Electric have formed a new joint venture, Virtual Game Center, which will offer online games via the Internet from November. Details are still sketchy, but Sega users will most likely use the above-mentioned connect kit to play against other Sega users on the Internet.

Netscape recently announced the formation of a new company, Navio, which will produce software for the forthcoming wave of cheap Internet appliances and TVs that promise Internet connectivity for every household. It is commonly believed that gaming will be a primary selling point for cheap Internet appliances and, already, Sega and Nintendo, plus electronic giants Sony and NEC, have signed on as partners in the new venture.

Sony, in particular, is setting itself up for a future gaming network. It currently operates two large Internet service providers, Sinfony and So-Net. So-Net, with its extensive infrastructure that doubles as a private network, is notable for its large number of local access points. It will be no surprise to anyone when Sony announces a connection kit for its popular Playstation game unit, and a gaming service available over So-Net.

Of these companies, I think that Sony is positioned to profit the most from its game expertise for the long term. Sony is taking a very vertical approach, as it will own both the hardware network and the gaming machines, whereas Sega and Nintendo will have to lease time on various networks.

Netscape, Microsoft escalate browser battle

Netscape has long enjoyed a commanding lead in the battle of the web browsers -- a lead it has held since the release of Netscape Navigator 1.0 in early 1994. At times, Netscape's market share has been estimated to be as high as 85%, and it has as many as 30 million users (including corporate intranet users not connected to the Internet).

However, Netscape is no longer the only major participant in this high-stakes game. Although a late entrant into the browser field, Microsoft has recently made some strong strides forward with its Internet Explorer.

Japan, quickly on its way to becoming the 2nd largest country on the Internet, and in the process of gearing up for
corporate intranet installation, is a key market in the browser battle. It was in Japan that Netscape formed its first
foreign subsidiary, and Japanese was the first non-roman language to be supported. Japan has also proven a key revenue-generating market.

The release of version 3.0 by both companies offers comparable feature sets and operating performance. With 3.0, Explorer has joined Navigator on retail shelves. Expect very aggressive street pricing, which will further put pressure on Netscape's market share.

Explorer 3.0 brings good support of Japanese, and a localized version with menus and dialogs in full Japanese. It supports 27 languages, more than any other browser. However, Navigator is available on over 15 platforms, which is impressive, while Explorer 3.0 is available now only on Windows 95 (with Windows 3.1 and Macintosh versions coming soon).

It is clear that Microsoft has upped the ante in this fast-paced software war. However, with new versions being
released about every six months, a small slip by either company could be disastrous. Of course, it is the user who
ultimately wins as low-priced software is continuously tweaked and improved.

It is interesting to see how important a market Japan has become.

You can contact Forest by e-mail as forest@twics.com, or link to his Japan Web Guide and The Digital Forest at http://www.cjmag. co.jp/magazine/bios.

For more information on the companies mentioned, point your browser to:

http://www.sony.co.jp/

http://www.sega.co.jp/

http://www.so-net.or.jp/

http://www.navio.com/