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Sega Woos Game Boy, Lynx Users With 32-Color, Hand-Held Video System

January 4, 1991

SOUTH SAN FRANCISCO, Calif. (AP) _ What’s neater than a one-color video game system small enough to toss into a bag and play anywhere? A portable, 32-color ″wonderful experience.″

At least that’s what Sega of America is counting on with Game Gear, its new bid to unseat Nintendo’s Game Boy as king of hand-held video games.

Sega hopes Game Gear’s many hues and superior graphics will draw new portable players and fans of the monocolor Game Boy, despite the new toy’s higher price.

″We’re living in a color generation. The teens today grew up on color TVs and color movies and, while they like the idea of a portable system, they want color, too,″ said Bob Botch, Sega’s marketing director for Game Gear.

Sega, second only to Nintendo in the $5 billion U.S. home video game market, will begin selling the game for $159.95 in New York and Los Angeles in April and throughout the rest of the country by the end of the year.

Like the home systems players hook up to their televisions, the hand-held, battery-powered versions use game cartridges.

The most popular has been Nintendo’s $89.95 Game Boy. Nintendo, with 80 percent of the overall U.S. videogame market, estimates it sold 5 million of the 8-bit hand-held systems in the U.S. last year.

Atari ranks behind Nintendo in the hand-held market with its 16-bit, 16- color Lynx that sells for $179. The Sunnyvale, Calif. company estimates it sold half a million in 1990.

But Sega, part of Sega Enterprises of Japan, hopes to immediately claim a big piece of the portable market, projecting it will sell 1 million of the sleek black, 8-bit systems with 3.2-inch screens this year in the U.S.

The company sold 1 million units of Genesis, its 16-bit home system, in 1990 and about 500,000 in 1989, when it was introduced midyear.

Spokesmen for Nintendo and Atari said the companies are not worried about Sega’s new system, and analysts questioned the price tag. But Sega is confident Game Gear will be a hit, pointing to sales in Japan, where it was introduced in October.

The system quickly became Japan’s best-selling color portable video system, Botch said. More than 40,000 systems were sold the first two days it was in stores, and backorders surpassed 600,000, the company said.

″What we’ve done is offer an affordable, portable unit and optimized the games for a smaller screen. And it is a wonderful experience,″ said Al Nilsen, Sega’s director of marketing.

Game Gear will be sold with one cartridge, ″Columns,″ a moving puzzle game familiar to users of Sega’s Genesis home system. Five other cartridges, costing $29.95 to $34.95 each, will be immediately available, and 20 - new games or Genesis games redesigned for a smaller screen - will be in stores by the end of the year, Botch said.

Some analysts, however, said Sega may have trouble competing with the less costly Game Boy.

″It sounds to me like a high price to ... compete with the $89.95 (Game Boy) and $189 for the NEC 16-bit (home system) processor,″ said Robert J. Schweich of Wertheim Schroder & Co. Inc. in New York. ″I think that’s a big difference.″

Game Boy has dominated the market because the name Nintendo is popular among youngsters, it has good software and is priced right, Schweich said. A product will sell at what some may consider a high price if it offers ″high play value,″ but color may not be that important to users on a hand-held system, he said.

″I think it’s going to be a hard sell,″ said Donald M. Krueger of Sanyo Securities America in New York.

″They’re just milking an old technology. It’s going to look a lot better (than Game Boy), but somebody’s going to come along with a 16-bit system and blow them away,″ Krueger said. Such a system would allow even sharper graphics and more sophisticated animation.

But Sega counters 16-bit virtues would be lost on such a small screen and would boost the price as high as $300. And the company is sure consumers will think Game Gear’s advantages over Game Boy will be worth the extra price.

Don Conyer, advertising manager for Nintendo, said the company considered making a color portable system but decided against it because of size and price concerns.

″We still feel that’s the right decision. The price is very fair. It’s really the quality of the software that makes or breaks the system,″ said Conyer, who said Nintendo had 70 games available for Game Boy and would have 120 by the end of 1991.

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