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Staff writer

The next battle in the video game war will flare up today when Sega Enterprises’ next-generation home console, Dreamcast, goes on sale.

With its fate hanging in the balance, the nation’s top arcade game maker is hoping for an all-out blitzkrieg.

It has been losing territory to Sony Computer Entertainment Inc. with its 32-bit home video game system, Sega Saturn, and suffered an unconsolidated 43.3 billion yen net loss in fiscal 1997.

Sony’s PlayStation continues to dominate the domestic market, and Nintendo Co. is putting up a good fight against Sony in overseas markets. There are no “ifs” about it; Sega, which also suffered huge losses in North America, is betting its future on the new game console.

And what if Dreamcast goes down? “We have no plan,” Sega President Shoichiro Irimajiri said at a recent speech in Tokyo.

Irimajiri, however, appears confident — at least in public. Dreamcast, most game engineers agree, is the most powerful home system released to date. It boasts a 200-megahertz central processing unit that incorporates a 128-bit graphic engine capable of 3-D visuals.

It is also equipped with a 64-channel music chip and a 33.6 Kbps high-speed modem, which many game developers expect will create a new market for network games that connect users via telephone lines. “When compared with existing machines, Dreamcast beats them in every respect,” said Jyunichi Nagai, publicity manager at major game software maker Capcom Co.

But good hardware alone does not win the war. The key, both Sega officials and industry experts agree, is to have software developers who can create games that will attract millions of users.

One reason Sega Saturn has failed to chalk up as many blockbusters as PlayStation is that Sega, unlike Sony, is a powerful software developer itself and tends to make less use of other software houses, Sega officials said. “With Sega Saturn, there was a fatal flaw in one aspect of the console — it was very difficult for third-party developers to create new and exciting titles,” Irimajiri said.

But this time, Sega says it has changed its tactics. Spokesman Hiroyuki Mori said the firm increased its technical support staff to provide a better development environment for third parties and will reward them financially if a product proves to be a hit.

Dreamcast also incorporates Microsoft’s Windows CE operating system as one of its two software development platforms, which will make programming easier for new software firms. “The result is that now 350 third-party developers have expressed their intention to develop software for Dreamcast,” Mori said. “At the time of Sega Saturn’s release, the figure was only 150.”

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