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Computer industry

Electronic Delivery of Video-Game Software Takes Center Stage

Strategic Insights

— 1 min read

Video-game rental market leaders Sega of America, Blockbuster Video, and International Business Machines Corp. have announced plans to test electronic delivery of video-game software for retail sale. The pilot project, dubbed NewLeaf Entertainment, aims to capitalize on the $1.5 billion video-game rental market by using IBM technology to deliver Sega video games on reusable cartridges to select Blockbuster stores. This innovative approach allows for cartridges to be rented and then reprogrammed an unlimited number of times, enabling just-in-time inventory management.

Key Takeaways:

  • The pilot project targets the $1.5 billion video-game rental market, leveraging IBM technology to deliver Sega video games on reusable cartridges.
  • The NewLeaf Entertainment project allows for cartridges to be rented, reprogrammed, and reused an unlimited number of times, maximizing just-in-time inventory management.
  • The collaboration between Sega of America, Blockbuster Video, and International Business Machines Corp. aims to increase overall transactions and maximize product availability for customers.
  • David Lundeen, president of NewLeaf Entertainment, noted the system's ability to put products into customers' hands and increase overall transactions.
  • Tom Kalinske, president and chief executive officer of Sega of America, emphasized the project's goals in ensuring that game rental customers can access the nearly 1,000 Genesis and Game Gear software titles available.
  • The companies plan to decide whether to offer the system for sale to all retailers after completing the market test.
  • Sega of America aims to take a larger share of the $6 billion U.S. video-game market from Nintendo of America.

Statistics:

  • The video-game rental market is valued at $1.5 billion.
  • Sega of America plans to capitalize on the nearly 1,000 Genesis and Game Gear software titles available.
  • The partnership between Blockbuster Video, Sega of America, and International Business Machines Corp. will utilize Taiwan-based Sega Enterprises Ltd.'s intellectual property.
  • Blockbuster's strategic partnerships and investments, including its $1.2 billion investment in Viacom Inc.'s buyout of Paramount Communications Inc., demonstrate its drive to expand its presence in the entertainment industry.

Sources:

  • "Sega, Blockbuster, and IBM to Test Electronic Delivery of Video Games" (No specific date mentioned in the source)
  • "Blockbuster Forms NewLeaf Venture with IBM, to Use Digital Tech to Give Stores Access to 'Vast Libraries' of Records, Movies" (No specific date mentioned in the source)

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