GTE Corporation Diversifies into Interactive Video Games and Multimedia Programs

Strategic Insights -

GTE Corporation, the nation's largest local telephone system operator, has entered the rapidly growing market for interactive video games and multimedia computer programs with the creation of a new business unit, GTE Interactive Media. This strategic move marks a significant departure from GTE's traditional focus on telecommunications and highlights its commitment to exploring new opportunities in the emerging multimedia sector. The unit, based in Carlsbad, California, has been quietly developing its products for four years and will officially launch this week at the Consumer Electronics Show in Chicago.

Key Takeaways:

  • GTE Interactive Media has been developing its products for four years, employing about 80 people, and investing more than $15 million in a "prototype" production facility called Digital Park.
  • The new unit will offer 20 new software programs for multimedia computers using CD-ROM disks, including "street sports," educational programs, and "virtual worlds."
  • GTE's investment in interactive media is a strategic move to complement its video transmission services and tap into the growing $7 billion market for multimedia computer software.
  • The company will demonstrate its products at the Consumer Electronics Show in Chicago, showcasing its efforts to establish itself in the competitive interactive video entertainment market.
  • GTE's interactive unit will face competition from established players like Nintendo, Sega, and Electronic Arts, which have dominated the market for video games.
  • GTE's diversified business approach will enable it to compete in a more agile and dynamic market, leveraging its financial resources to invest in creative talent and innovative products.

Statistics:

  • GTE has invested over $15 million in its "prototype" production facility, Digital Park, to develop software tools and systems for interactive video entertainment.
  • The new unit will offer 20 new software programs for multimedia computers, targeting the growing market for educational and informational programs.
  • The market for multimedia computer software is expected to reach a value of $7 billion, with the majority coming from video games sales.
  • GTE's annual revenues from local telephone and cellular companies exceed $20 billion, providing the necessary financial resources to invest in new initiatives.
  • The company's new interactive unit employs about 80 people, representing a significant investment in human capital.

Sources:

  • "GTE to Launch Interactive Media Unit," by an unattributed author, published in an unspecified source.
  • The author cites Richard E. Robinson, president of GTE Interactive Media, as the source for many of the quotes and information in the article.
  • The article mentions the existence of an experimental fiber optic network in Cerritos, California, built by GTE several years ago.
  • The article also cites the market size of $7 billion for multimedia computer software, sourced from an unspecified market research report.