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Sega to license Dreamcast, form chip JV

Sega apes Sony apes Palm - fears M$

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Sega is attempting to court third-parties to license its Dreamcast 128-bit games console technology, sources close to the videogame company have claimed.

In other words, if it's good enough for Sony, it's clearly good enough for Sega. Sony announced a similar scheme this month. The Japanese electronics-to-entertainment giant will offer PlayStation 2 technology - its Emotion Engine CPU, in particular - to companies keen to take that technology into new markets and broaden the platform's scope. Sony's plan itself apes the 'Palm Economy' programme put in place by Palm.

Sega's take on the strategy is remarkably similar to Sony's. Again the plan centres on building revenues by selling chips to licensees. Sega sources told ZDNet US that the company has placed a CPU production joint venture on the tables of several global semiconductor companies. The resulting operation would sell chips to Sega's Dreamcast licensees, much as the Sony-Toshiba JV hopes to do with the Emotion Engine. Sony is investing a further Y125 billion yen ($1.17 billion) in the project to boost production.

According to the Asian Wall Street Journal, the possible partners are NEC, Hitachi, Philips Electronics, STMicroelectronics and UK multimedia operation Imagination Technologies.

Of course, while modelled on Palm, Sony's scheme is more about beating Microsoft, and the potential threat of X-Box has clearly been a major motivator for Sega too. Both Japanese companis hope that by making their platforms more widely available, they will become de facto standards for console, Net accessand, home networking hardware.

"The future game box will be an all-in-one, set-top box," Sega Vice Chairman Shoichiro Irimajiri told ZDNet. "In that case, Sega's role is one part of many functions, so we cannot do it alone. We need very good alliances or a joint venture."

Curiously, unlike its rivals, Sega sees strength in focusing on narrowband Net connections based on analogue modems. Sega's vision, as described by Irimajiri, has the kind of broadband content services Sony is keen on providing through PlayStation 2 not becoming widely available until way past 2005 - with modem connections dominating until then.

"If our intuition is right... Sega will be the dominant force in the narrowband Internet world," Irimajiri said.

Sega's focus on ISP services and 'free consoles for Net access subscriptions' deals certainly point that way, but it assumes Sony specifically ignores that sector and that such services are really what console owners - who you'd expect to be more interested in the games - want. ®

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