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Silicon Inc., Nintendo go hunting for the big game

Silicon Graphics Inc. and Nintendo Ltd. plan to combine forces in the booming market for advanced video game machines.

Nintendo will put powerful microprocessors Silicon Graphics makes for its own work stations into new game machines. Nintendo also will license Silicon Graphics’ acclaimed graphics technology.

The companies planned a news conference for today in San Francisco but did not say what the announcement would concern.

The new machine would be similar to one by 3DO of Redwood City. It would connect to televisions and play CD-ROM disks providing superior graphics and more realistic images than Nintendo’s current machines.

Lee Isgur, an analyst with Volpe, Welty & Co. in San Francisco, said he expected Nintendo’s system to sell for about $ 400, about $ 300 less than 3DO’s system. Nintendo’s name also gives it a definite advantage over lesser known 3DO , Isgur said.

Nintendo, based in Kyoto, Japan, also could use the technology to build a cable converter box that would let TV viewers interact with gameshows or order merchandise. 3DO has said its system may eventually interact with cable systems.

The advanced video market is becoming more complex. Atari Corp. last week introduced the Jaguar, its new high-performance 3-D game system it hopes will challenge the domination of Nintendo and Sega.

Sega next year plans to introduce an interactive program that uses the company’s existing Sega Genesis system with a decoder cartridge to download a game from cable television.

Silicon Graphics, based in Mountain View, recently announced a joint venture with entertainment giant Time Warner to produce advanced equipment to interact with cable TV programs.

Linley Gwennap, senior editor of the Microprocessor Report, said Silicon Graphics wanted to get into videogames as a way to expand sales of its MIPS microprocessors.

“The MIPS chip has been very successful in the workstation market, which is fairly low in volumes compared to PCs,” he said. “But the game market is huge.”

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