Video Game Delivery System to Get a Tryout

Imagine walking into a video store on a Saturday night and actually finding the movie you want still in stock.

That may be asking a bit much, but NewLeaf Entertainment and Sega of America on Tuesday announced plans to test-market a software delivery system in some Blockbuster outlets this summer that could provide such satisfaction to video game renters.

The system lets video rental firms store encrypted video game software electronically and download it to special cartridges in less than 30 seconds. The cartridges can be reprogrammed with different games an unlimited number of times.

The system--developed by NewLeaf and Fairway Technologies, joint ventures of Blockbuster Entertainment Corp. and IBM Corp.--is similar to the one the two firms tried to interest the music industry in last year. That system would have allowed consumers to select the compact discs they want, then press them in the store.

The goal with both systems is to allow retailers to match inventory to consumer demand.

The recording companies, concerned about licensing, piracy and quality control, nearly unanimously rejected the new technology, but the video game industry appears more willing to embrace it. Game rental has ballooned to a $1.5-billion business. As with movie rentals, the new hit games are always the first to go.

Industry sources estimate that about a third of the customers who want to rent games go away empty-handed because the ones they wanted had already been checked out. “This system ensures that every customer will be satisfied,” said Tom Kalkinske, chief executive of Sega.

Nintendo officials said the company had declined to participate in the test but would not rule out using the system in the future. Initially limited to cartridges, the system can be expanded to allow for electronic delivery of CD-ROM-based games as well.

If it works, the technology could be a boon to Blockbuster, whose core business is threatened as electronic delivery of movies directly to the home looms. The test will start in August in 10 to 15 stores in the Southeast and could be rolled out nationally in the fall.