Larry Ellison backs Internet game sites

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by Ashlee Vance

(IDG) -- After toiling for days, months, or even years to develop cutting-edge technology, what do you do when the company that purchased your ideas lets them sit on the shelf? Well, if you are a personal friend of Larry Ellison, you invite the Oracle chief over for dinner, have a bite to eat, and make plans to start buying some patents back.

Five years ago Lazer-Tron -- a designer of coin-operated games -- decided to sell its gaming patents to Acclaim Entertainment Inc, hoping the New York-based company could advance some of the Internet-related technology Lazer-Tron had been working on and help deliver the games to users around the globe.

The video game vendor felt that Acclaim had enough resources to further develop the patents and to increase the use of its Internet-related technology. Acclaim, however, never got around to capitalizing on its purchase, prompting Lazer-Tron's founders to seek help in buying the technology back and to find capital to help push its original ideas forward.

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That's when Larry Ellison, Oracle's chairman and chief executive officer, stepped in and told his friend Norman Petermeier, president of Lazer-Tron, that he could help bring the patents back home. Ellison led the way in repurchasing a number of assets from Acclaim, including all patents and some limited liabilities.

With Ellison's backing, Lazer-Tron was transformed into Arcade Planet -- a Livermore, California-based entertainment software company that announced Wednesday the launch of two gaming Web sites which add a twist to the Internet-game space.

"Arcade Planet is leveraging its expertise in the coin-operated amusement and video game industry to offer an unmatched online entertainment experience," Ellison, who is Arcade Planet's main investor and a company director, said in a statement.

The two gaming sites, PrizeGames.com and PrizeCenter.com, both revolve around a type of Internet gaming that allows registered users to accumulate points while they play, and then redeem the points for prizes. Norman Petermeier, president and CEO of Arcade Planet, said that the PrizeGames.com site works on both a pay basis and in a play for free mode.

After registering at the site, users choose from a number of games and receive bonuses for both the amount of time they play and their proficiency. Users who choose to pay can accrue points at a faster rate, earn progressive bonuses, participate in tournaments, and receive instant prizes if they can replicate specific keyboard sequences during play.

If users earn enough points they can then go to PrizeCenter.com to claim their booty. The prizes range from laptop computers and cruises to beauty products, according to Arcade Planet officials.

Different states in the U.S. have different laws about playing for prizes online, and the games offered on PrizeGames.com vary depending on the address the user provides during the registration process. Petermeier hopes to expand the project internationally, when different prizes will be offered depending on what country a user is located in.

Arcade Planet designed all of the games on its site in-house, but hopes to announce a number of partners in the area of game designing and game hosting. In addition, Petermeier said his company will look to provide back-end gaming services for a number of third-party gaming sites. If the deals reach completion, Arcade Planet claims that it will shortly announce two partners with over a million users each that plan to use this hosting model.

"Any game, any place can be prize-enabled and put on our site," Petermeier said.

Arcade Planet will develop front ends for other sites that correspond to the partner's look and feel. The games, however, would be hosted on the back-end by Arcade Planet servers.

Schelley Olhava, an analyst with International Data Corp., said that these back-end efforts could offer important growth opportunities for the company. If the vendor fails to attract a large number of online users, it still has its traditional arcade-style game revenue to fall back on. "It is not like they are starting out brand new," she said.

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Arcade Planet
Oracle

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