TOKYO -- Japan's videogame makers are rushing into alliances with telecommunication firms to tap a budding but potentially massive online market, while forging new ways to surf the Internet.
Japan's leading home game software producer Square said on Monday it would tie up with Japanese telecom giant Nippon Telegraph and Telephone Corp (NTT) to provide online game software.
This comes a week after its rival software maker, Capcom, announced an alliance with major Japanese telecom group KDD Corporation to offer real-time online video games.
Although the moves are aimed at broadening the customer base of telecom carriers and the gamemakers, they also herald the arrival of the network age for the videogame industry.
This trend is expected to be given a major boost when Sony launches its highly advanced PlayStation2 game console on 4 March.
The driving motive behind the alliances is a quest by gaming companies to secure networks with large data transmission capacity. So far, this has meant long-distance carriers.
Square, which is known for its blockbuster "Final Fantasy" series game software, has teamed up with the long distance unit of NTT, while Capcom's partner is KDD, another Japanese long-distance carrier.
The new service to be launched by Capcom and KDD in March will allow game players to interact in real-time with rival players in different cities, linked by KDD's large-capacity network.
The obvious benefit for the leagues of avid Japanese videogame users is speed in an era where videogame playing is expected to increasingly move online.
"Game software makers including Square and Capcom are rushing into tie-ups with companies which can deliver networks with large data transmission capacity," Daiwa Institute of Research analyst Eiji Maeda said.
"With the launch of PlayStation2 ... and the rapid expansion of the online network world, game software makers are trying not to fall behind in developing online games," he added.
Square plans to sell a new version of Final Fantasy in the future in the new service which will start in 2001.
Anticipating a competitive squeeze from PlayStation2 and its ability to allow users to serf the Web, Japan's third largest gamemaker Sega Enterprises announced on Monday an alliance with cable television networks.
It said it would start tests with 30 domestic cable TV network companies to introduce high-speed Internet-based services through Sega's Dreamcast game console as early as this week.
The Tokyo-based company will provide 2,000 free Dreamcast consoles to cable TV subscribers during the test period, giving users access to Internet-based services such as online games through the cable networks.
Dreamcast is so far the only game machine which can provide online access including the Internet. But it won't be alone for long.
Most analysts expect the March launch of PlayStation2 and a new console planned by Nintendo Co Ltd to create a new era of game-Internet functionality through the television.
"The future of the online game -- how big it will grow, which networks among cable and broad-band networks will be the mainstream -- is not clear," said Commerz Bank analyst Yoshio Imanaka.
"But because of the potential for the market to grow, both hard and soft makers are trying everything they can think of."
