Nintendo, AT&T; to Develop Home Shopping Service : Japanese Firm Says Phone Giant Covets Its Millions of U.S. Home Game Players
Nintendo, the giant Japanese maker of such video games as Donkey Kong and the Super Mario Brothers, has formed a partnership with American Telephone & Telegraph to develop a home shopping and information service.
Peter Main, marketing vice president at Nintendo, told The Times that the service would link the nearly 19 million Nintendo game systems now in American households to two of the nation’s other most-used home appliances: the telephone and the television.
Main said initial stages of the subscription service, which will be modeled after the home shopping and information program offered by Nintendo’s parent company in Japan, could be in limited operation by next year. He declined to disclose how much the service would cost, or details of the company’s arrangement with AT&T.;
While Nintendo has been blessed by enormous success since its entry into the U.S. home market in 1985, the electronic information business could prove far more troublesome. Similar services, including several launched by newspaper chains, have proven to be expensive failures.
Still, with the support of AT&T;, the Nintendo service could rival Prodigy, the computer-and-telephone information venture launched last year by a partnership of Sears Roebuck & Co. and International Business Machines. Prodigy officials have said privately that their service--which lets users exchange electronic mail, read the latest news and make travel and entertainment plans, among many other services--is not expected to turn a profit for several years, and that it is relying on the deep pockets of its partners until the market matures.
Main said Nintendo officials would formally reveal their plans Wednesday at a meeting of financial analysts in New York.
“This is a potentially important thing,” said Paul Saffo, a research fellow at the Institute for the Future, a Menlo Park think tank. “But what will make this system work is fun things, like game playing, not home shopping or banking.”
Saffo said children who have mastered the Nintendo game system will be the key to establishing a successful electronic information system. “They understand these machines; adults don’t,” he said. “The service will have to be patient until these kids become adults.”
Seeks Release From Pact
An AT&T; spokesman declined to comment on his company’s relationship with Nintendo, citing its longstanding refusal to discuss unannounced deals. The spokesman noted, however, that AT&T; petitioned federal regulators two months ago to release it from its agreement not to participate in electronic information services. The ban, in effect since 1982 but due to expire in August, is part of a court order governing the breakup of AT&T; into regional telephone companies.
At the heart of the proposed Nintendo service is the company’s video game player, an electronic gadget the size of a hardback book that has become one of the most popular toys in America since its introduction 3 1/2 years ago.
The player, which retails for about $80, has been used exclusively in this country to operate video games that are displayed on a color television. But the system contains powerful electronic components--the equivalent of the earliest personal computers--that can be devoted to a variety of other tasks.
In Japan, where nearly 37% of households have bought a Nintendo system since its introduction in 1982, the company has offered home shopping, banking, travel information, airline reservation and stock quotation and purchasing services over the past 18 months.
Main said the service--which requires a typewriter-like keyboard and a special telephone hookup known as a modem--has proven so popular in Japan the company wants to duplicate it in the United States.
“We’ve only seen the tip of the iceberg as far as what this system can do,” Main said in an interview at the Consumer Electronics Show in Chicago, where Nintendo has a record-breaking, 53,000-square-foot booth to display its systems and hundreds of games and accessories.
Main said the company deliberately positioned its game player as a toy, both to keep the price down and to appeal to customers otherwise scared away from computers and other high-technology devices. Now, he said, the time has come to capitalize on the large number of machines in American households.
Main said AT&T; has been impressed by the number of Nintendo game players that could be harnessed to telephone lines.
“AT&T; needed a hardware unit in lots of houses to make this happen,” he said of the telecommunications giant’s interest in the proposed service.
The service offered by Prodigy and other data networks such as Compuserve require users to own personal computers. Many services are complicated, which has become a barrier to acceptance.