Holidays’ Video Game Picture Gets Complicated : Consumers: Industry is moving away from cartridges and toward compact discs. But there’s not much yet in CD format, and it’s expensive.


Video games are expected to be more popular than ever this holiday season, but consumers face tougher choices about which ones to buy.

It’s the second Christmas for compact disc-based game systems but the first in which it’s clear that the industry is moving away from cartridge systems for good.

So shoppers must decide whether to buy a $50 to $100 cartridge system that will be outdated in a few years or pay considerably more--as much as $700--for a CD-based system. Another complication is there are hundreds of cartridge games and only a few dozen on compact disc.

Analysts and industry executives believe most people will stick with cartridge games for another few years.


“The problem is when you look at the other stuff . . . there is a very limited variety and I think that most people are not convinced instantly that what is new or not yet quite here is better,” said Lee Isgur, an analyst who follows the video game industry for Volpe, Welty & Co. in San Francisco.

“It takes anywhere from one to three years for (game) developers to really begin to get the best” out of a video format, he said.

“The compact disc revolution with respect to video games is just beginning,” said Gary Jacobson, analyst at Kidder, Peabody & Co. “It is more of a 1995 issue.”

The discs hold more data, making possible better sound and graphics, including full motion video. With higher-powered chips running the game systems, players also get faster interaction.


Personal computer makers have also started selling more machines that run compact disc-based programs, although a disc that runs on a PC won’t work on a video game system.

Sega of America Inc. began selling a $230 CD player that supplemented its popular Genesis system 13 months ago. By the end of the holidays, sales of the unit will have passed 1 million, said Bill White, Sega’s vice president of marketing.

Newcomer 3DO Co.'s system, sold under Matsushita’s Panasonic label, has gotten a lot of attention because it is also designed to become a gateway for more two-way video and communication services. It costs $700.

Philips, the company that developed CDs, sells an interactive game system that, with a $250 video accessory, also plays movies and music video titles. More are on the way. Atari’s new $200 Jaguar system, on sale in just a few cities this Christmas, is to have a CD-player accessory, for another $200, early next year. Also in 1994, Commodore will bring the Amiga CD32 that is on sale in the United Kingdom to the United States.

And Nintendo of America Inc. is working with Silicon Graphics Inc., maker of workstation computers, to produce a CD-based system by the end of 1995.

Prices on cartridge systems, meanwhile, have fallen to around $100. Nintendo even lowered the price of its basic NES unit, which jump-started the industry eight years ago, to $50, less than the price of some games.

Some retailers have dropped the prices even lower to lure shoppers.

“There’s unbelievable value-driven pricing,” said Peter Main, marketing vice president for Nintendo.


Cartridge game titles continue to proliferate. The biggest this year has been Acclaim Entertainment Inc.'s “Mortal Kombat,” selling 3 million copies since its Sept. 13 launch for both Nintendo and Sega systems.

Game developers also face a quandary in choosing what system they should write products for.

“It is an awkward chicken-and-egg situation,” said Tom Zito, president and chief executive of Digital Pictures Inc., maker of full-motion games for Sega CD and 3DO machines.

Acclaim programmers are hedging by writing software for story lines and characters first and then the portions that are unique for each game system, company president Robert Holmes said.

“We have developed methods that allow us to get 60% to 70% of the way through the development process before saying this is now going to become a Sega product or a 3DO product or Nintendo product,” Holmes said. “It is a dangerous strategy for a publisher to say I’m only going to ride only one horse.”