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TN THE fantasy world of home video-games, outsmarting adversaries and zapping opponents has always been a fast and furious business. Not so among the companies that make the games; during the 1980s Nintendo, the industry's leader, was virtually unchallenged. Now Sega Enterprises, the second-biggest home video-game firm, is giving Nintendo a run for its money. In Japan and America, the world's two biggest video-game markets, sales of Sega's top-of-the-line product have nearly equalled Nintendo's. Feeling the heat, Nintendo has slashed its prices and is working feverishly on a more advanced machine.
Because of the huge success of its original Nintendo Entertainment System (NES), which has dominated the market since its introduction in 1985, Nintendo is still much bier than its upstart rival. But two hidden strengths have made Sega a threat to Nintendo's dominance of the market: design expertise that Sega has gained as Japan's biggest supplier of video games for arcades, in which the action and graphics are far more sophisticated than in home games; and the programming acumen of Sega's parent, CSK, Japan's largest software house.
These twin talents helped Sea beat Nintendo in the race for a so-called "16-bit"...