IS NINTENDO KILLING COMPUTER GAMES?
 By Dan Gutman

 Is the Nintendo video game system killing the computer game market?

 Over Thanksgiving, Mediagenics, one of the largest computer games companies,
laid off 30 employees. Electronic Arts passed out seven pink slips, the third
time they've been forced to let people go this year. Mindscape has had what
they call a "restructuring."

 The computer games industry expected a 40% increase in sales in 1988, but it
looks like it will only be 5%. Some people blame it on one thing-- Nintendo.

 "It's taking a big chunk out of us," says Brian Fargo, president of Interplay
Productions in Newport Beach, California. "This is one of the worst
Christmases in five years."

 Fargo is the creator of "Bard's Tale, " a series of hugely-successful role-
playing adventure games.  "Even some of the hard core role-playing people who
we sell to are preferring to play with their Nintendo systems now," he says.

 To the American entertainment software companies, the invasion of this
Japanese video game system is like Pearl Harbor all over again.

 While these American companies are suffering, 99-year-old Nintendo can't make
enough of their home video game systems to keep up with demand.  The Nintendo
Entertainment System was the best-selling toy last Christmas, according to
"Toy and Hobby World" magazine, and twice as many are expected to be snapped
up this year.

 Amazingly, 12% of all American homes now have a Nintendo attached to a TV
set.  (Only 15% have personal computers, and that includes ALL brands.)  
Every kid in the country (especially boys) has or wants a Nintendo, and many
video stores now rent Nintendo games alongside the movies.

 At just $80, the Nintendo system is much less expensive than a computer, and
it's easier to use.   The games aren't as intricate as computer games, but
Nintendo novices don't have to bother with disk access, copy protection, or
other computer nuisances.  Pop in a cartridge and you're off and running,
zapping Mini Bosses, Zoomers, Rippers and the Mother Brain.


                                           
 The whole home video game business, which everyone left for dead just three
years ago, is now nearly back to the level it had reached during the peak of
Pac-Man mania.   But this time around Nintendo has 80% of the market, while
Sega and Atari (which used to own the whole shooting match) are a distant
second and third.

 It's all quite ironic.  Several years back, I was the editor of a magazine
called "Video Games Player."  When the bottom fell out of the video games
market, it became painfully clear that kids had given up on games- only
systems and had switched to personal computers.  We changed the name of the
magazine to "Computer Games."

 Now, it appears, the latest generation of kids are saying they prefer to play
games on games-only systems INSTEAD of on computers.

 But the American software people are not giving up on the personal computer. 
"We're going to stick with what we're doing," says Brian Fargo. "We're not
going to dive into the Nintendo market.  If they come out with a 16-bit
machine that's really powerful, then that may be a different story."

 Accolade, another software firm, isn't worried either.  "The Nintendo
audience is the 8-14 year old boy who likes shoot-'em-up arcade games,"
explains Accolade's Charlotte Taylor. "Our average audience is 30 years old.
We find more adults buying computer software than kids are."

 Taylor also believes today's Nintendo players are tomorrow's computer game
fans.  "These kids are playing Nintendo right now.  When they get to high
school and college where they have to use a personal computer, there will be a
natural passage to playing computer games.  We don't see our audience being
taken away."

 Time will tell.  In Japanese, the word "Nintendo" means, "You work hard but,
in the end, it's in heaven's hands."


                                  

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