Video game makers deny merger talks

Video game manufacturers Nintendo Co. Ltd. and Sega Corp. vehemently denied a New York Times report today that the companies are in talks to merge.

The New York Times reported Wednesday morning on its Web site that Nintendo Co. Ltd. is in talks to acquire rival Sega Corp.

Quoting executives close to the negotiations, the newspaper said the two companies are holding talks that could lead to Nintendo acquiring Sega for around US$2 billion. Terms of the transaction are still under discussion and the talks, which have been going on for months, could still collapse, said the report.

Both companies vehemently denied the report.

“It is completely false and we would like to say there are no such talks,” said Sega spokeswoman Miho Masuda.

Nintendo said in a statement that it was “100 per cent not in talks to acquire Sega.”

The newspaper reported that Isao Okawa, chairman of Sega, has been looking to sell the company for some time and has even held talks with Microsoft Corp., which is keen to enter the consumer computer games business and is planning its own console, the X-Box. Microsoft announced launch details of the console last week.

Sega has been fighting a fierce battle in the consumer game console business ever since Sony Computer Entertainment Inc. entered the market several years ago with its PlayStation console. The company overnight began eating into the market share of Sega and rival Nintendo, which at the time had the market almost to themselves. While Nintendo fought back with its N64 console, Sega has been struggling.

In late November, the company reported a worse than expected operating loss of 32.5 billion yen (US$287.2 million) for the six months to the end of September. The company said price cuts on the Dreamcast console put pressure on earnings.

Sega Corp., in Tokyo, can be contacted at Nintendo, in Kyoto, can be contacted at