Matsushita Electric and Nintendo Agree To Collaborate On Digital Network Home Electronics Strategy

LOS ANGELES (May 12, 1999)-- Matsushita Electric Industrial Co., Ltd. and Nintendo today announced that they have agreed to a comprehensive collaboration in the area of digitally networked home electronics.

Thanks to recent developments in digital networking technologies, consumers will soon be able to enjoy a range of new services based on the convergence of technologies for broadcasting, telecommunications and storage media. Developments have made it possible to inexpensively provide advanced image data service using high performance computer graphics.

Achieving sales that lead the industry worldwide, Nintendo has expanded its game machine business aggressively, supplying family-use computers, primarily in Japan, as well as dedicated game machines that run ROM-cassette media. By utilizing highly advanced computer graphics, large-capacity data storage recording media and networking capabilities, Nintendo is pushing ahead to pioneer entirely new worlds of games and related services.

Matsushita has been at the forefront in the development and introduction of digital products, like DVD players, digital TV set-top boxes, digital video cameras and digital cellular phones as well as telecommunications and broadcast systems, that will bring about the realization of a digitally networked society. In addition, it has aggressively promoted technical collaboration with some of the world's most advanced information-technology companies.

Based on their long business relationship, Nintendo and Matsushita engaged in an exchange of views on approaches to the most appropriate way to realize the digitally networked society concept. As a result of this exchange, the two companies have now agreed to wide-ranging collaboration in the digital network home electronics area based on the DVD platform, which respects the copyright protection of content creators and whose market penetration is expected to grow to 60 million units by the year 2000.

The agreement covers the following points:

• Matsushita will develop and supply the DVD media and the drive devices for the next-generation Nintendo game machine.*

• The two companies will collaborate on convergence products that incorporate next-generation game machine and Digital audio-video technologies.

• The companies will pursue future applications of digital network-related products and services.

Game machines-based on DVD media will expand the DVD world by enabling us to enjoy movies and games in portable DVD players and DVD home theaters, and will open the way to new DVD applications. This will also encourage the development of new game titles that make full use of new graphics engines for next-generation games.

In Japan, Matsushita has promoted its comprehensive Home Information Infrastructure (HII) concept as a model for the digital networking society of the 21st century. With the addition of game entertainment and network functions to DVD-based products, the HII concept is further enhanced to include the ability to distribute and receive games, music, images and other media.

Through this collaboration, both Nintendo and Matsushita expect to accelerate development of "Digital Network Home Electronics" solutions and expand their business operations to further contribute to society.