A whole new ball game

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The industry, which has exceeded $1 billion in sales, grew nearly 31 percent in 1995 over the previous year, according to PC Data. That's almost twice the rate posted in 1994. So far this year, the growth has been 26 percent.

Monster Truck Madness

"We have worked with developers in the past, but with the Artwick and Single Trac deals, it shows we're open to other relationships with developers," said Richard Brudvik-Lindner, maketing manager for Microsoft's Interactive Division, which includes the games group.

The games group accounts for substantial portion of the Interactive division's revenues, but Brudvik-Lindner declined to release figures. The PC games staff has grown to nearly 200 people, compared with less than a dozen about eight years ago.

Meanwhile, Microsoft has increased its market share ranking to sixth, with 4.8 percent of the market in 1996, compared with tenth spot in 1993 with 4.4 percent, according to PC Data.

NBA Full Court Press

Nearly twice as many game publishers have come into the industry during this time. The number of game publishers has reached 404 this year, compared with 205 in 1993, PC Data says.

"The industry is consolidating and in the next three to five years, there will be three to four companies that hold 80 percent of the market," Williams said. "I think Microsoft will take market share away from the smaller companies, but we'll be one of the ones to survive."

He noted the company will compete by continuing to build the "best games" that it knows how.

Nevertheless, no one is sure what will happen in the widely anticipated shakeout of the gaming industry.

"The shakeout is going to happen with or without Microsoft, because there are more companies than the industry can support right now," said Lee Isgur, an analyst with Jefferies & Company in San Francisco.