There may be life anew for an idea Sega Genesis pioneered nearly 20 years ago.

Stewart SchleyIf you played video games in the early 1990s, you probably remember them: Blanka, a green-skinned he-beast with comically inflated biceps, plucked from the jungles of Brazil. Guile, a U.S. special forces veteran with a razor-like haircut and an American flag tattooed defiantly on his shoulder. Chun-Li, a martial arts master bent on avenging the death of her father. And E. Honda, the giant sumo wrestler from China. They were characters in Capcom’s immensely popular Street Fighter II, the arcade and console game that catapulted the one-on-one fighter category to prominence.

In all, there were eight fighters to choose from, unless you happened to play the game using a cable-delivered video game service known as Sega Channel. For the Sega Channel version, only six figures were available – a concession to data transmission limitations.

Street Fighter II was one of a handful of games that were altered slightly to comport with the technical requirements of Sega Channel, which made its premiere in 1993. The novel video game delivery service, sold for $14.95 per month by operators including Time Warner Cable and Tele-Communications Inc., offered the promise of something new in gaming – unlimited access to as many as 50 games each month, with no need to purchase and own game software. All you needed was a 16-bit Sega Genesis console and an adapter made by Scientific-Atlanta or General Instrument.

It was a relatively simple offering that took elegant advantage of cable’s one-way transmission architecture. Game software was continually broadcast over a pair of non-adjacent slices of spectrum, each occupying a 3 MHz slice. When a customer chose a game, the adapter would wait until the game code showed up in the broadcast stream and would then snatch the bits, stuffing them into its 4 MB of DRAM in less than one minute. From there, the game performed just as it would have from a purchased cartridge. Essentially, Sega Channel merely substituted one form of memory loading for another.

Sega Channel broke new ground in several ways: Not only did it suggest a networked future for the delivery of entertainment content, it forced cable companies to recognize the need to fine-tune their networks to accommodate new types of digital content that would be far less forgiving of impairments than analog video signals. In that way, Sega Channel served as a sort of early brush-clearing force for the digital video revolution that would follow.

Also ahead of its time was Sega Channel’s economic model: a recurring monthly subscription payment in exchange for unlimited access to selected titles. If it sounds like Netflix, that’s because it was.

Sega Channel had several things working in its favor. It addressed a growing market, the technology platform worked, there was a significant footprint available – nearly one-third of the country’s cable households could get the service at its peak – and the subscription model seemed like a relative bargain. So why did it shut down after five years and no more than 250,000 subscribers?

One explanation is simple inertia. At the time, when video gaming was just beginning its meteoric rise as a household entertainment force, there was little dissatisfaction with prevailing game industry practices. Kids bought games from retail stores, brought them home and played them repeatedly. Unlike the recorded music industry, game publishers didn’t pre-package desirable titles (hit songs) into all-or-nothing collections (CDs), leaving an opening for the equivalent of a disrupter like Napster or iTunes. In other words, Sega Channel may have been attempting to solve a problem that didn’t exist.

But clearly technology played a role, too. The migration to next-generation 32- and 64-bit consoles spelled doom for Sega’s Genesis, the solitary and proprietary platform to which Sega Channel was hitched.

Today, game publishers are taking a fresh look at digital delivery over cable’s broadband networks with an eye toward elevating profit margins by reducing physical manufacturing and distribution costs. But rather than repeat the Sega Channel experiment, they’re relying on a new generation of more powerful set-top boxes rather than a proprietary game platform, and they’re contemplating multiple payment models, ranging from free game samples to so-called “paymium” download-to-own schemes. Operators including the French broadband provider Free have reported encouraging results from this type of approach, suggesting that there may be life anew for an idea Sega pioneered nearly 20 years ago. And maybe this time the full cast of street fighters can be part of the picture, too.