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TWE, TCI, Sega plan cable channel

Time Warner Entertainment Co. L.P. and Tele-Communications Inc. are teaming up with a top video-game maker for a new cable channel.

The entertainment titans have entered into a joint venture with Sega America Inc. to deliver the Sega Channel to cable subscribers worldwide who also happen to own a Sega Genesis game player. Sega estimates that since introducing the player in 1989, 7.5 million have been sold in the U.S.

“We’re always interested in new services that are potentially appealing to cable customers,” said Stan Thomas, exec VP of Time Warner Enterprises, a division of TWE L.P.

TWE, a partnership of Japan’s Toshiba Corp., ITOCHU Corp. and Time Warner, owns Warner Bros., HBO and TW Cable.

Cable subscribers to either TCI or TW — the nation’s first and second largest systems, respectively — will receive a Sega cartridge that will plug into their coaxial cable. After installing the cartridge in a Genesis player, users will be able to download the latest games, tips and insider news.

Sega touts the fact that the device adds a new channel of programming without waiting for the next generation of digital cable technology.

“It’s effectively games on demand,” says Doug Glen, marketing director of Sega’s multimedia division, “but doesn’t require the expensive and exotic two-way digital technology.”

The trio has ambitious goals. After testing the channel this fall, a full roll-out in early 1994 is expected to sign up 1 million subscribers in the first year. The companies estimate 1994 revenues of about $ 30 million from the joint venture.

The announcement follows a similar one made last month by video-game rival Nintendo, which announced it will be offering a satellite delivered channel to subscribers’ homes next year in Japan.

The Redwood City-based Sega is a unit of Tokyo’s Sega Enterprises Ltd., which turned in $ 2.8 billion in revenues last year. It will be offering its service in Japan, as well.

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