Nintendo drops satellite plan

Video-game company halts plan to deliver games directly to homes

August 21, 1998: 11:49 a.m. ET

TOKYO (Reuters) - Japanese video-game company Nintendo Co. Ltd. said Friday it has canceled a plan to send video games and other data direct to homes via satellite because of wrangling with a broadcast affiliate.

Nintendo said its affiliate Satellite Digital Audio Broadcasting Co., known as St. Giga, hadn't applied for a government digital satellite broadcasting license by Friday's deadline.

A Nintendo spokesman told a news conference that St. Giga managers had refused to approve Nintendo's plan to reduce the firm's capital, a process that would be required to wipe out its accumulated debts.

A small broadcaster of digital music and data programming, St. Giga had a whopping cumulative debt of 8.8 billion yen as of March this year.

Nintendo owns a 19.7 percent stake in St. Giga.

Nintendo had planned to offer video games and data programming through a channel on a new BS-4 satellite, due to be launched in 2000.

Japanese electronics parts maker Kyocera Corp. as well as many content providers had agreed to join Nintendo and acquire stakes in St. Giga once it obtained the license.

The spokesman said Nintendo will halt supplies of video-game content to St. Giga by the end of next March.

Nintendo also will recall five executives loaned to St. Giga, but has no plan to withdraw its investment in the company for the time being, he said.