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November 2, 1999

Telstra and Sega in Internet Game Console Pact

By CBR Staff Writer

Australia’s leading carrier Telstra Corp is to launch an internet service for TV game consoles in partnership with game maker Sega Enterprises Ltd. The Sega Dreamcast, the first TV-based internet console to be marketed in Australia, will be launched November 30. Although primarily a game-playing machine, it also features a 33.6Kbps modem that can be used for email and web access.

All Dreamcast subscribers will be forced to access the internet via a Dreamcast portal site which Sega hopes will become a Yahoo-style destination for consumers. The portal will be gradually developed into an e-commerce hub that will involve partners in areas such as banking, music, movies and lifestyle products.

Telstra is expected to offer three months’ free internet access with the machine, after which a special low rate will apply to Dreamcast users. Gerard Noonan, managing director of Ozisoft which represents Sega in Australia, said: This will be a serious competitor in the PC market. Based on the research we’ve done, people primarily buy computers to communicate, surf the web and play games. Dreamcast does all that and in an unintimidating way.

Rival TV games maker Sony’s PlayStation 2, which will also provide internet access, will not be available in Australia for at least another year and will cost a lot more than the Sega machine. Sony has yet to choose an internet company to go into partnership with, but is confident of market dominance when it does. PlayStation 2 is such a superior machine that we barely consider Dreamcast a competitor, a Sony executive was quoted as saying by the Australian Financial Review. About 1.4 million Australians bought the original PlayStation, compared to about 40,000 who bought Sega’s Saturn console.

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