Interplay Makes Move to Launch Its Virtual Arcade

IRVINE —  Interplay Productions, the developer of popular computer games, is set to unveil today a new company whose mission is to build an online service for computer game players, a virtual arcade where gamers around the globe can compete head-to-head in tournaments, chat about digital weapons and even buy T-shirts.

The company, called Engage Games Online, already has deals to make its service available at no extra charge to subscribers of America Online and Prodigy, and the company said its service will also be available through the Internet.

In making its service available through these electronic avenues, Engage’s strategy represents a departure from previous services available only to a closed network of subscribers.

The service, which Irvine-based Interplay has been developing in secret for two years, won’t be fully available until the fall. But Jeff Leibowitz, president of the fledgling company, said it already has the equipment to handle as many as 40,000 players.

“What this is really about is socialization,” Leibowitz said. “Players will be able to post scores on leader boards, brag about how well [they] did, swap tips on weaponry. We want to make it the most enjoyable, compelling game environment anywhere.”

Interplay was scheduled to introduce the new company today at the Electronic Entertainment Expo, or E3, a trade show for interactive software developers taking place at the Convention Center in Los Angeles. Engage is being spun off as a separate company so that it can attract games developed by Interplay rivals, company officials said.

Through Engage, Interplay has set its sights on what has so far been a somewhat limited market for online game services, which mainly serve as electronic meeting places for players looking for opponents.

Given the rising popularity of computer games--an industry whose sales already surpass U.S. movie box office receipts--online game services are poised for what many believe will be rapid growth.

“I think this has bigger growth potential than the traditional computer software market does,” said Brian Fargo, president and founder of Interplay. “This is our way to get to the mass market.”

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Still, Engage isn’t rushing into this market alone. Two Bay Area start-ups, Mpath and Total Entertainment Network, are poised to enter the field, experts say. And ImagiNation Network, a Burlingame-based subsidiary of AT&T;, is currently redesigning the private online game service it has operated for four years.

“The market is really heating up, and some people are going to lose,” said Brian DeBiase, chief executive of ImagiNation. “We’re the only one that has a member base. We’re going to be the best platform to bring all this together.”

The prize these companies are pursuing is the vast market potential of the Internet and online services. ImagiNation has had success with its closed service, which is only available to subscribers with special dial-up accounts, and can not be accessed through the Net.

But ImagiNation’s 50,000 subscribers represent just a fraction of the population that might be tapped via the Net. “When I flip on my switch to Engage,” Fargo said, “I’m going to have [access to] 10 million.”

Fargo said Engage was created to grab control of this vast new marketplace, and keep it out of the hands of computer industry giants that might have launched their own game service and turned companies like Interplay into mere software suppliers.

“If you just sit back you’ll have Microsoft, online companies and phone companies steaming ahead of you,” Fargo said. “You’ll give your product to them, and they’ll pay you a royalty.”

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Computer games will still be sold through CD-ROMs and cartridges, Fargo said. But online game services could offer a cluster of new revenue sources.

Engage will be paid by AOL and Prodigy, for instance, for the time their subscribers spend on Engage. Those who access Engage through the Net will pay hourly fees of about $3. And one of Engage’s more lofty ambitions is that computer game equipment makers and other companies will pay to advertise their wares online.

The service is conceived as a virtual world where players will wander through rooms associated with various games and discussion groups, interacting with graphical representations of other players, or avatars. The company plans to offer about 40 games when the service is launched in the fall, and about 20% of those will be card games and other mild fare targeted at younger and older audiences.

Engage has been housed in Interplay’s headquarters in Irvine, and will remain based there when Interplay completes a move to larger facilities in the city later this year, Leibowitz said.

The company has 30 employees and is planning to hire more, Leibowitz said.