Interactive Entertainment Execs Are Upbeat on Growth

PLAYERS are slammin', jammin', and making people into ``toast.'' But, can the producers of interactive entertainment keep the cash registers ringing?

In a new survey of 41 top executives in the $12 billion industry, Infotainment World (IW), a San Mateo, Calif., publisher, found that the industry is cautiously optimistic.

``It can be very expensive if you back the wrong entertainment technology,'' says Patrick Ferrell, president of IW, which publishes such magazines as GamePro and Electronic Entertainment. Unlike the video- cassette recording industry, interactive entertainment has no industry standard.

Thus, there are easy ways to lose money. Mr. Ferrell points out that there are a number of companies that put all their efforts into the technology produced by 3DO, which was the first company to use 32-bit technology. Because the hardware is so expensive ($500 to $600 per machine), the number of buyers of 3DO machines is still small.

Instead, consumers last year continued to buy older 16-bit technology. This is partially because the dominant companies, Sega and Nintendo, sell the hardware for under $200. Then they sell the software for $50 to $80. The survey found that half of the executives think this technology has at least one more good year.

Rapid changes in technology tend to confuse consumers, who then defer their spending. The industry executives say, however, that the home electronic entertainment industry will at least double by 1999.

``Technological limits that, until now, have constrained both hardware and software designers will be overcome in the next five-year period,'' the survey predicts. Sales will blossom to $25 billion, up from $12 billion today. The industry will broaden its demographics beyond male teenagers to appeal to more females and a wider age group. Although Hollywood is trying to find ways to cash in on the industry, the executives say they expect the business to consolidate, much like the film industry.

As for the ``electronic superhighway,'' allowing two-way communications, the executives say they don't expect one for eight to 10 years. ``Over the short term, the industry is bearish. Over the long term, it's bullish on the superhighway,'' Ferrell states.

Sometimes the new form of entertainment is controversial.

Remember the electronic game that made the news because the winner got to rip off an animated character's head? Phenomenally successful.

Gregory Fischbach, chairman and chief executive officer of Acclaim Entertainment Inc., the publisher of ``Mortal Kombat,'' says the home version - head ripping included - has sold 5 million copies since Sept. 13 (``Mortal Monday'') and expects to sell 6 million more by the fall, when Acclaim introduces ... what else? Mortal Kombat II.

The sequel has more moves and more characters, including the chance to brush the dirt off an opponent (called a ``friendship move''). According to Mr. Fischbach, the new game is already popular in arcades.

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