Sega plans online gaming network

Sega will next week launch SegaNet, an online gaming network that lets users around the world play against each other.

Gamers log on to the network through Sega's Dreamcast modem, and as an incentive the company has dropped the US price of the console by 25 per cent to $150.

According to Peter Moore, president of Sega America's Dreamcast unit, SegaNet will provide 50 hours of free play over the internet with 12 games scheduled to be available by the end of the year. The games giant plans to offer a $150 rebate to customers who agree to join SegaNet for 18 months at a cost of $21.95 a month.

Sega is likely to be the only games provider to run such a facility for some time, since rivals Sony and Nintendo have indicated their intention to wait until high-speed internet access to the home is more prevalent before launching similar schemes.

P M McNealy, an analyst at Gartner, said: "Sega actually has a tremendous opportunity out of all the console game makers to set the tone for everyone else that, 'Hey, online gaming is easy, online gaming is fun and online gaming is where it's at.'"

But he warned that Sega is between a rock and a hard place because of the anticipation for Sony's October launch of PlayStation2 in the US. "That thing already has noise that Sega has to fight," said McNealy.

As well as PlayStation2, Sega will face stiff competition when Nintendo and Microsoft launch their respective Dolphin and X-Box consoles next year.

Industry analysts are forecasting a boom time for internet-based gameplay. According to Forrester Research, online gaming is expected to control 24 per cent of the video games market by 2002, up from its current two per cent mark.