July 13, 2000 1:40 PM PDT
Game start-up faces major rivals with Linux console
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Indrema, a company of fewer than 50 employees with offices in New York and San Francisco, plans to release a $299 high-performance video game console in the spring of 2001, chief executive and founder John Gildred said. The machine runs a version of Linux tweaked by Indrema with some added software such as DVD decoding abilities that won't be publicly available.
Linux, a clone of Unix that began as a programming hobby, has carved a major niche for itself in the mainstream computing world, with fast growth in the server market and blossoming interest for gadgets. But going up against Sony, Sega, Microsoft and Nintendo in the video game market will be difficult, said Yankee Group analyst Mike Goodman.
"This is a classic David vs. Goliath, only there are four Goliaths," Goodman said.
But the competition won't be easy. Sony's PlayStation2 has been released in Japan and will arrive in the United States on Oct. 26, Goodman said. More than 2 million Sega Dreamcast units have been sold in the United States.
The next-generation Nintendo "Dolphin" machine was due this fall but has been delayed, probably until the first half of 2001, Goodman added. And Microsoft's Xbox, though a new competitor, is backed by the software giant's financial and marketing clout.
Indrema ultimately hopes to take on these competitors, but that's not part of the early strategy, Gildred said. "Initially, we're not really going head-to-head with the Nintendos and Sonys," he said. "We're positioning for high-end Linux gamers (who want) cutting-edge performance and flexibility in their systems."
The company will start with underground marketing tactics to spread enthusiasm among Linux faithful. Beginning in the spring, the company will seed the market with new systems. Only when word has spread will more widespread efforts to gain recognition begin. "Our mass-market push next year will occur when we feel the mass market has been educated by the alpha developers, the early adopters," Gildred said.
The stronger marketing push will take place in time for the 2001 holiday season, Gildred said, the key sales window for the video game market.
But the company's success ultimately will rest on whether it can convince developers to write games. Here, too, the company is leaning on philosophy from the open-source community that collectively developed Linux, often with no profit motive whatsoever.
Unlike current game consoles, developers will be able to offer programs nearly for free, paying only a fee to have programs certified, Gildred said. People seeking a name for themselves will be able to get to market quickly.
"We're changing the rules of video game development," he said. "It's going to make games prevalent on our platform, and you're going to see free games on our system."
Indrema will charge per-unit royalties only for games that are being sold. It won't levy a fee for games that are offered for free, he said.
But Goodman was cautious whether the model will work. "Free games are great," he said. "They need to be successful enough that they can seed the market, but you can't be too successful, because if you are, nobody will want to pay for games."
Indrema is talking to established game authors and has signed deals with some, though Gildred wouldn't say which partners are on board. About 30 titles are expected to be available at launch, he said.
The company selected Linux because it needed an open-source heart, and Linux "performs very, very well," he said. The company will release its modified version of Linux, a distribution called DV Linux. Though Linux can be obtained for free, the company selected it for performance, not cost, Gildred said.
Gildred declined to release many details of the Indrema hardware, other than saying it would use an Nvidia graphics chip, an Intel or Intel-compatible processor and a custom graphics system with "a lot of high-speed interfaces between a lot of the graphics systems."
Indrema will sell some boxes under its own name but also is licensing the design to others, Gildred said.