FACTORING IN DVD-ROM

DAN ALAIMO

WASHINGTON -- Software for the new DVD-ROM computer drives will be shown at the Electronic Entertainment Exposition in Atlanta this week, but it is still too new to be a force in the marketplace, said Doug Lowenstein, president of the Interactive Digital Software Association here, which owns the E3 Expo.

"DVD-ROM is really not a factor at this point, because the installed base has not reached a critical mass that would generate a lot of software support. I think we are probably about a year away from seeing software for that market become a big factor," he said.

Some DVD-ROM software will be seen at the E3 Expo, "and we will start to see more of it as the year goes on. But the development timelines are 12 to 18 months and sometimes even longer for a high-level computer game," he said.

The market for computer software, which is now almost entirely based on the CD-ROM format, is strong, but not growing as fast as console game products, said Lowenstein. It also has not been affected by consumers' anticipation of DVD-ROM, which arrived on the market late last year, he said.

But the computer-based DVD-ROM market is expected to grow much more quickly than that for DVD players for television, according to research firm Strategy Associates, Luton, England. While DVD video player shipments are expected to reach 500,000 this year in the United States, there will be demand for about 1.4 million DVD-ROM drives.

"DVD video is achieving modest success, but its potential is limited," said David Mercer, an analyst with Strategy Associates. "By contrast, millions of home PC buyers will choose DVD-ROM simply as a better CD-ROM."

The console game segment, comprised mainly of the Nintendo 64 and Sony PlayStation formats, is at its peak right now, said the IDSA's Lowenstein. "As a practical matter, the personal computer is a multiple-purpose machine, as opposed to the consoles, which are exclusively for games. If you own a console, it is not much good for you if you don't buy games to play on it," he said.

"While we know that people use the PC in the home more for playing games than for any other application, we also know it is not the only thing they use a PC for. So they are less frequently in the market, and therefore the growth rates are not as strong as they are on the console side at this time."