Net gaming feels Heat

Confidence is growing in online interactive gaming as the market gets another player today: SegaSoft.

SegaSoft announced the national beta test today of Heat, a gaming network that will include online multiple- or single-player games, CD-ROM games, and titles from other companies.

The 130-person SegaSoft is a is a joint venture of CSK International Headquarters and Sega of America. SegaSoft develops games for PCs and the Net. Heat will be fully operative in the spring; no pricing scheme has been announced.

Interactive games on the Net have inspired much optimism among research groups that say the industry will turn extremely healthy profits. By the year 2000, the market is set to generate $1 billion in annual revenue, according to a recent study by Jupiter Communications.

All the hype aside, online gaming faces a few hurdles, such as delays, or "latency," in online action. An example is the lag from the point a virtual soccer player kicks a ball to when it actually reaches the goal.

SegaSoft will gain revenue from member fees, online direct sales and distribution of games, and through interactive advertising.

"Multiplayer gaming is really in its infancy. But we're going after this segment because we believe there is going to be great growth," said Peter Loeb, vice president of SegaSoft Entertainment Network. "We are hoping to get 20,000 to 25,000 beta testers."

SegaSoft joins Total Entertainment Network, Mpath Interactive , Engage, and Microsoft, which is expanding into online gaming.

But SegaSoft has partnered with Mpath, eliminating one direct competitor. Mpath will bring to the table its already established network as well as its Internet service.

Sega has yet to announce its prices; Loeb promised it will try to keep member fees low. TEN has raised its introductory offer of $4.95 to $9.95 for five hours per month, with an additional $1.95 per additional hour. Subscribers can also pay $29.95 per month for unlimited access. TEN provides national game play, and is developing regional areas to decrease latency for users.

"We've gone well over the 20,000 paying subscriber mark," TEN spokesman Garth Chouteau said. "We didn't make the 25,000 mark as we had planned before, but we may have been optimistic in the first place."

Also on the forefront is Pong creator Nolan Bushnell's plan to offer pay-per-play Internet games in sports bars, restaurants, and hotels through PlayNet Technologies. Pricing hasn't been finalized, but PlayNet is considering prices of $1 to $10 per game.

Mpath charges for some its games; Engage is still in beta testing. No details have emerged from Microsoft's recent decision to enter the market.