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SGI goes to the Oscars

The company made famous by Jurassic Park brags that the three Oscar nominees for best visual effects used its technology.

Silicon Graphics (SGI) said today that the three Oscar nominees for best visual effects used its technology.

The nominees, which include Twister, Dragonheart, and Independence Day, were selected from a list of seven films. SGI says its digital computer technology and advanced 3D modeling software, provided by subsidiary Alias/Wavefront, were used by the artists who worked on all seven films.

"Our Silicon Graphics-based digital studio allows us to quickly turn around the high-impact special effects required in blockbuster firms with demanding budgets and time constraints," Alan Kozlowski, CEO and president of Pacific Ocean Post, said in a prepared statement. The Santa Monica digital studio created the special effects for Independence Day.

The announcement represents the latest front in the battle among computer companies to grab a share of the animated moviemaking market in Hollywood. The marriage of the entertainment and computer industries has been dubbed "Siliwood," though the moneymaking potential of this new market is in no way trivial.

While the digital special-effects business is relatively small, the profit margins on the high-end computers needed to produce them are sizable. SGI gets 15 percent of its sales from high-end workstations that create special effects in Hollywood.

Silicon Graphics made a name for itself in Hollywood as the company whose high-end workstations created the dinosaurs in Jurassic Park. The company prides itself on providing "solutions that eliminate technological barriers and unleash creativity," according to Edward McCracken, chairman and chief executive.

And while SGI is expected to remain on the cutting edge of the entertainment-computing market, Intel is making inroads into the much-coveted entertaiment computing market. Last month, SGI reported a disappointing second-quarter loss, and analysts worry that SGI will continue to see slow growth in the high-end workstation market. Intel hopes to break in by providing lower-end machines that can perform many of the same tasks as SGI workstations, which cost between $8,000 and $200,000.

"SGI is clearly the force and has always been the force in the entertainment industry," Goldman Sachs analyst Laura Conigliario said. "What we are seeing from Intel is a market-development phase...And as in any market that is worth anything, a company [like SGI] is going to have to defend itself."

Like the rest of the computer industry, Conigliaro admits, Hollywood is looking for more powerful machines with lower price tags. She says SGI's most recent product introduction, a lower-priced workstation dubbed the O2, has been wildly successful--particularly in Hollywood. "From price-performance point of view, they did themselves a big favor," she said.

Last year, Intel joined forces with Creative Artists Agency, the superstar talent agency, to form a lab to develop multimedia entertainment and information programming for PCs. Billed as the "perfect marriage of talent and technology," Intel hopes to develop authoring tools that allow Hollywood studios to work with virtual reality, rendering, and high-level animation.

"Intel is very confident that, with the price performance that Intel architecture provides, more and more studios will be authoring films on PCs [that use Intel chips] instead of turning to high-end workstations, company spokesman Adam Grossberg said.

"With the introduction of the P6 chip this year," he said, "we expect to see the studios move increasingly into the authoring space."

(Intel is an investor in CNET: The Computer Network.)