Nintendo, Sega Deny Takeover Report

TOKYO (AP) â€” Leading Japanese video game makers Nintendo Co. and Sega Corp. on Wednesday denied a published report that Nintendo is mulling a buyout of Sega. <br><br>``The information in some overseas

Wednesday, December 27th 2000, 12:00 am

By: News On 6

TOKYO (AP) â€” Leading Japanese video game makers Nintendo Co. and Sega Corp. on Wednesday denied a published report that Nintendo is mulling a buyout of Sega.

``The information in some overseas report that we are buying Sega is completely wrong,'' Nintendo President Hiroshi Yamauchi said in a statement.

Sega also issued a statement, saying news of the buyout ``is completely false'' and that the company ``would like to deny all reports related to the matter.''

The New York Times reported in its Wednesday edition that executives close to the negotiations said the deal could see Nintendo acquiring Sega for about $2 billion.

The report, citing executives it did not identify, said the talks have been going on for months and the deal could still collapse.

The report comes as Sega struggles to survive intensifying competition.

Sega said in October that it no longer expected to turn a profit after years of losses and projected a group net loss of 22.1 billion yen ($194 million) for the year ending March 2001. That was a reversal from the previous forecast of net profit of 1.5 billion yen ($13 million).

Price cuts in the United States and Europe of Sega's Dreamcast video game systems are weighing on the company's earnings as the cost of producing the online gaming service remains high.

Sega faces formidable challenges from domestic rivals â€” Nintendo, the creator of Mario games, and Sony Corp., which introduced the hugely successful PlayStation2 vido game console.

Nintendo is expected to release a new game machine GameCube next year while overseas U.S. software company Microsoft Corp. is vying to enter the video game market in 2001 with a game console called X-Box.

In trading Wednesday on the Tokyo Stock Exchange, Sega's shares were suspended in response to the report less than an hour before the session closed. Before the suspension, its shares had surged 10.5 percent to 1,054 yen ($9.25).

Nintendo's shares closed down 5.4 percent at 17,390 yen ($152).