Microsoft denied today that it was in discussions with Japanese games giant Sega, describing a story in today?s 'Financial Times' as ?a rumour without foundation?.
That followed a report in yesterday?s Japanese daily paper, 'Nihon Kezei Shimbun', which said a Sega executive confirmed it was in talks about a possible alliance with Microsoft, causing the games maker's share price to rise by five per cent on the Tokyo stock exchange.
Such a deal - whether a licensing agreement or a financial one - could rescue Sega from a difficult situation as it finds itself losing market share to Sony and Nintendo. It would also make sense for Microsoft, which yesterday admitted that it views handheld computers running its CE operating system, a cut-down version of Windows, primarily as gaming devices. These products will start to be introduced from January.
Licensees of CE seem to be moving towards the games market. At the weekend, Samsung - which makes Sega's games machines - was demonstrating a device that appeared to run the forthcoming release 2.0 of Windows CE. It was incorporated into a monitor with a remote badge, allowing children to play games from a distance. Samsung also demonstrated a phone called the Weeble, which seemed to incorporate similar technology.
And today, a separate report suggested that Toshiba is also set to introduce devices based on Microsoft CE.
Earlier this year, Microsoft said it would extend the CE operating system, still not fully scalable to Windows 95 or above, into phones, handsets and even into motor cars. Last year, it also got serious about games when it set up a new division devoted to games software for children and adults.
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