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Scientific-Atlanta: Set-top boxes fun and games

The company is planning to develop TV set-top boxes with video game capabilities that could rival the GameCube and PlayStation 2.

Scientific-Atlanta on Wednesday said it is planning to develop TV set-top boxes with high-performance video game capabilities that could compete with game consoles such as Nintendo's GameCube and Sony's PlayStation 2.

Scientific-Atlanta Chief Executive James McDonald, speaking at an investor conference in Dana Point, Calif., said developers are already building games for its Explorer series of set-top boxes. But he gave no timetable for when such a device might be available.

"We have a partner we are working with who has 250 engineers in Europe writing software for the Explorer platform for games," McDonald said at the Morgan Stanley Semiconductor & Systems conference, which was broadcast over the Internet.

Sony, Microsoft and Nintendo are the primary hardware players in the $10 billion U.S. video game market. Microsoft, which makes the Xbox, and Sony in particular have focused on making their consoles more consumer-friendly, adding features like DVD and music playback, to expand their appeal beyond core video gamers.

"I can give (game players) the same performance you get out of those game boxes," McDonald said. "There is no question that games is one...market we will be in."

A representative for Scientific-Atlanta was not immediately available to comment further on the company's plans.

Scientific-Atlanta's game box would not likely compete directly at retail with those companies, but instead could be an alternative supplied by cable TV providers, which buy the boxes and then place them in consumers' homes.

Cable providers are using beefed-up set-top boxes and services such as video on demand in their battle for customers against satellite TV providers EchoStar Communications and DirecTV, which is controlled by News Corp.

American Technology Research analyst Rob Sanderson said Scientific-Atlanta's strategy could allow it to sell set-top boxes that would let cable operators, in turn, offer game-related subscription services to consumers. But the games would have to pass muster in an already crowded market.

"Conceptually it's appealing, but can they provide something that is compelling? I don't know," he said.

Story Copyright  © 2004 Reuters Limited.  All rights reserved.

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