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Games not just child's play

Online and Internet games will account for 11 percent of the industry's total revenues by the year 2000, up from its anticipated 2.5 percent share of the market this year.

Online and Internet games will account for 11 percent of the industry's total revenues by the year 2000, up from its anticipated 2.5 percent share of the total online and Internet market this year, according to a report released today by Jupiter Communications.

Jupiter's "Online and Internet Games Report" said the games market will represent $1.6 billion of the $14.4 billion online and Internet market by the year 2000. That's quite a jump from the $9 million market share estimated for games this year out of the $3.6 billion online and Internet industry.

That is likely to bode well for companies like 3DO (THDO), which said today that it will focus on Internet and game entertainment software.

3DO said it will sell or enter into a joint-venture agreement for its hardware business, 3DO Systems. The company expects to cut up to one-third of the jobs once a sale or joint-venture is completed and operate a workforce of 300 employees. The company said the cost of the restructuring has not yet been determined.

"The Internet and Internet entertainment, in particular, is a huge opportunity," said Trip Hawkins, chairman and chief executive in a statement. "We are moving toward focusing entirely on the challenge of building a strong entertainment software studio, with the Internet as a catalyst for growth."

Under the restructuring, Hawkins will focus on serving as a creative director, while Hugh Martin, 3DO president, will assume operating control of the company.

3DO tomorrow plans to introduce Meridian 59, a 3D, multiuser dimension game on the Internet. Jupiter said revenues from the games market will come from pay-per-hour charges, advertising on games-related Web sites, subscriptions, and other sources.

The research company also estimates that pay-per-play charges will account for 37 percent and advertising.

"The demographics are broadening," said Marc Harrison, editor of Jupiter's newsletter. "Gaming is becoming less and less an overly male action-oriented pastime for players. It's becoming a broader base."