New On NUON

Way back in 1997, before there was such a thing as a Sega Dreamcast or a Playstation2, there was an announcement from an unknown company called VMLabs. VMLabs had a technology which they claimed would revolutionize the video game industry. It would eliminate a lot of the hassles associated with video gaming, and replace them with a standardized platform with great developer support. That technology was originally code-named Project X, and eventually renamed as NUON.





VMLabs has a pretty decent pedigree in the video game industry. It was founded by Richard Miller, who previously worked for Atari. Miller was responsible for the Atari Jaguar, a powerful, but ultimately unsuccessful video game platform. The other two senior positions are filled by Nichols Lefevre, previously of Commodore, Atari and Sega, and Bill Rehbock, who was responsible for library development for the Playstation during his tenure at Sony.

The NUON from VMLabs represents the first of the DVD based video gaming units, and should be out sometime in the year 2000. The business model for the NUON, however, is quite different from that of the Playstation2 (or for that matter, Sega Dreamcast or Nintendo Dolphin). VMLabs has decided to take a page from the 3DO school of thought, and license their technology to outside manufacturers. They have, however, learned from the mistakes that 3DO made, and adjusted their business plan accordingly.

First, a little history.

The 3DO Multiplayer was the brainchild of former Electronic Arts founder Trip Hawkins. Trip thought the whole idea of having competing video game "platforms" was ridiculous, and that video gaming wouldn't truly become mainstream until a common platform existed. 3DO's mandate was to create that standard, then license the hardware technology to outside manufacturers. 3DO would make its money from licensing fees, and of course from software.

Now, as you've probably determined from the lack of a 3DO Multiplayer in your home, the idea was a resounding failure. The biggest problem was the cost of the hardware. At $700, it was just too expensive to take off. The only company which licensed the hardware from 3DO was Matsushita. Eventually, 3DO sold off the entire hardware design for the second generation of 3DO Multiplayer (M2), along with 3DO's entire hardware division. The M2 was never released as a consumer product. 3DO reorganized and became a (still successful) software developer and publisher, following in the footsteps of Trip Hawkins' earlier venture, Electronic Arts.

VMLabs has learned at least some of the lessons 3DO taught the industry.

First and foremost, video game manufacturers (Sega, Nintendo, Sony, etc.) rarely, if ever, make any money selling the hardware. They make the money off the software. So, the challenge becomes finding a way to make your platform attractive to hardware manufacturers.

VMLabs found an interesting way around this problem. They're selling the NUON as a low-cost alternative to MPEG2 decompression. This means that NUON hardware will potentially be sold in cable boxes, satellite television decoders, and of course DVD players. If the cost was less than, or at the very least comparable to current MPEG2 decompression solutions, then NUON would be attractive to hardware manufacturers.

VMLabs eventually found Toshiba, their first hardware partner, in May of 1999. Toshiba plans to introduce their first NUON-based DVD players sometime in the year 2000.

Another problem was the inherent cost of the 3DO technology. It was expensive to build. NUON is essentially a replacement part, allowing hardware partners to remove some other (expensive) technology and replace it with the NUON technology. If VMLabs' plan works out right, eventually having NUON technology in your DVD player (or cable box or satellite decoder) could actually be less expensive than not having it.

The presence of a hardware partner doesn't mean a lot at this point, because there's still no software. To get around that issue, VMLabs has signed deals with a number of developers, including Acclaim, GT Interactive and Digital Leisure. Several pieces of NUON software should be ready to go at the time of the hardware launch.

The deals which have been struck with VMLabs do not make their battle any easier, though. The NUON technology will be entering a crowded marketplace.

The Sega Dreamcast has just had a successful launch, and the odds are pretty good that the games Sega has will be more attractive to gamers than the product available with the NUON. To compound this problem, Sony's Playstation2 should be hitting the market in the year 2000 as well. Between these two products, and the constant reduction in DVD player pricing, NUON is hit hard in its two core markets.

The video gaming side is covered quite amply by Sony and Sega (and eventually Nintendo, as well). DVD players keep coming down in price, so as long as the NUON is not being mass produced, it's not getting any cheaper. Also, new developers are not exactly flocking to the NUON. So far, Toshiba is the only major hardware partner, and the list of software developers is not exactly overwhelming.

New hardware partners are also going to be hard to come by.

Matsushita has partnered with Nintendo on the Dolphin, and will be releasing a more expensive version of that system which plays games and movies (the same market as NUON). You can bet Nintendo and Matsushita's deal includes a disclaimer covering exclusivity. Matsushita will not be partnering with VMLabs any time soon.

Sony has, of course, the Playstation2, and as long as VMLabs intends on invading the Playstation2's market, Sony has no interest in competing technology. One only needs to look at how long Sony kept selling Betamax units in the face of VHS to see how unattractive competing formats are to the electronics giant. Unless VMLabs actually manages to conquer the market with NUON, Sony will not be interested.

Phillips has been burned on this kind of thing before, with their own billion-dollar baby, the CDi. Don't expect Phillips to get on board unless VMLabs backs up the money truck.

Other manufacturers will be cautious, at best, and unresponsive at worst. Unless VMLabs is going to offer hardware manufacturers a piece of the software pie (which is unlikely, since most of VMLabs' profit would be expected to come from software), the big boys like Samsung, Pioneer and Kenwood are not going to get on board. There's just not enough in it for them, given the risk involved.

Couple all this difficulty with the fact that NUON is starting to look pretty old by today's standards (it was initially revealed in 1997, after all), and you see that VMLabs has an uphill battle in a crowded arena.

Also, VMLabs doesn't exactly glow with stability. A visit to their website reveals press releases with broken links, nonfunctional email addresses, and a public relations firm which can't be contacted. These are the type of things which make me doubt VMLabs' ability to survive until their hardware launch in 2000.

Still, the existence of Toshiba as a hardware partner does offer a glimmer of hope. Toshiba wants a way into the video game market (It wouldn't surprise me if Toshiba owned a significant chunk of VMLabs - because VMLabs is privately held, shareholder information is unavailable), and the NUON offers them a way to do it. If they put their considerable marketing money behind this platform, it could just beat the odds and become a success.

Also, it's worth noting that the most popular games of all times are typically the ones which don't appeal to the hard-core gamer, but instead to the average Joe. Games like Deer Hunter and Myst easily outsell games like Command & Conquer and Warcraft, even though both of the former titles are loathed by gamers. The software developers which are onboard with NUON tend to be those kind of mass-market companies. Companies like Hasbro Interactive (Monopoly, etc.) and Digital Leisure (Dragon's Lair, Space Ace) are not as interested in hard-core gamers as they are the average person. NUON could become a success in spite of gamers, rather than because of them.

The NUON represents an interesting, if not entirely convincing, piece of technology. It has the potential to really hit the mass market, but lacks that special "spark" a product of this type needs to get off the ground. Ultimately, it'll be up to the public to decide between competing technologies like the Sega Dreamcast, Sony Playstation2, Nintendo Dolphin, and of course VMLabs NUON.

Last week's quote of the week was answered correctly by Ron DeVoe (no relation to the band). He was the first person to correctly identify the quote as coming from Robert Zemeckis' Contact starring Jodie Foster and Matthew McConaughey. For being the first in with the quote of the week, Ron gets a copy of Harrison Ford's great action film, The Fugitive.

This week's quote is from a lesser seen and lesser known flick.

"Your kid is one crutch short of a telethon."

As usual, if you know where the quote is from, email me at

ken@dvdfuture.com