Pace Micro Technology and Sega will share their collective expertise in order to bring the world of online gaming to subscribers of cable TV and other networks.

In order to fulfill the vision, Pace has integrated the Sega games platform into its digital personal video recorder (PVR) home gateway (set-top boxes), providing consumers on-demand access to hundreds of console-quality games with 3D graphics, digital-quality sound and full-motion video. Consumers will now be able to play games online with others in the U.S., while at the same time using the latest PVR technology to "timeshift" TV.

"We have integrated the Sega console into a set-top with a personal video recorder (PVR) and removed the CD-ROM to create a complete online delivery system," says Andrew Wallace, senior vice president, Pace. "This addresses what we call the casual gaming market. By 2003, 50 percent of U.S. households, which is the most important market for this technology, will have online gaming. This platform is integrated at much lower cost per game than normal systems and this creates a new market."

Wallace says the game gateway hard disk allows access to all of Sega's 350 games, but the platform is currently carrying around 60. The console is smaller than most VCRs, and contains a PVR. It has the ability to record two live incoming video streams simultaneously.

"This is a world first, and we are very excited about it. We've been working with Sega for a year to bring console quality gaming to TV. The device works with cable, DBS or DTV and is DOCSIS approved," says Wallace.

"Sega has been in the gaming business for years, and we believe that games are the most wanted interactive entertainment content wanted in the home," says Shinobu Toyota, executive vice president of content strategy and business development for Sega America. "There is no other company that delivers this amount of content to the home. We offer broad content to all members of the family."

"The benefits of integrating gaming technology into the set-top box go beyond just games," says Neil Gaydon, president of Pace-Americas. "For instance, the powerful 3D graphics capability can be used to spice up other applications, like the electronic program guide (EPG). Games content is also considered to be 'sticky', meaning people usually play for a long period of time, which bodes well for the network operator," he adds.