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Exent Goes for Gamers

Craig Matsumoto
2/24/2006

A company that worked on streaming video for Asynchronous Transfer Mode (ATM) -- yes, they're that old! -- has become the cornerstone for online gaming services that several big-name carriers are tapping.

Exent Technologies , based in Israel, is helping carriers offer PC-based games via broadband. Its most highly publicized piece of work is GameTap, a Turner Broadcasting service that lets users run old games -- including Atari 2600 and Commodore 64 relics -- on home PCs.

Exent's roots go back to 1992, when the company worked on video streaming and early telemedicine efforts. [Ed. note: Leeching over IP?] In 1996, Bezeq, The Israel Telecommunications Corp. Ltd. (OTC: BZQIF) commissioned Exent to develop a gaming system over ATM that launched around the year 2000. Seeing the possibilities there, Exent steered its business into games, launching its first commercial services for games in 2001.

The company has racked up an impressive customer list that includes BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), Verizon Communications Inc. (NYSE: VZ), and Yahoo Inc. (Nasdaq: YHOO) Some carriers that are also investors in privately held Exent include Bezeq, Comcast Corp. (Nasdaq: CMCSA, CMCSK), Magnum Telecommunications, Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY), and Time Warner Inc. (NYSE: TWX); other investors through the years have included Avansis Ventures, Concord Ventures , General Atlantic Partners LLC , New Enterprise Associates (NEA) , and Temasek Holdings Pte. Ltd.

Exent isn't working on the massively multiplayer online role-playing games (MMORPGs), which have become big drivers of bandwidth demand in some markets. (See Cisco Places Gaming Bet and Insider Looks at Gaming.) Still, some PC adventure games have enough lush graphics to take up 4 to 7 GBytes -- enough to strain user patience due to download times.

Exent's technology lets the user launch a session without having to download the whole game. "The user caches 10 percent or 15 percent of the game and can launch the game from there," COO Yoav Tzruya says. "We sort of fool the operating system into believing the game is running on the PC."

The process also includes "several layers" of security, he adds, to prevent users from stashing the game and/or spreading the code around on peer-to-peer networks.

The idea is to give service providers another revenue stream. Carriers are anxious to use IP capabilities to add services to consumers' monthly bills, but there's some indication (among Light Reading readers, anyway) that the simple bundling of voice and TV won't be enough. (See LR Poll: Bundles Begone!)

While computer games don't have that Desperate Housewives level of appeal, they could still open new business avenues for carriers.

"The vast majority of computer games are sold on CDs via brick-and-mortar retailers. However, new BitTorrent-like technologies are enabling game developers to cut out the middleman by distributing their games direct to the consumer," writes analyst James Crawshaw in "Online Gaming: Invasion of the MMORPGs," a recent Light Reading Insider report. "Various game portals and communities have been launched in the hopes of becoming the Web-based middlemen for gaming content. Telecom operators such as Verizon see this as an important part of their consumer Internet offering."

There's something in it for game developers, too, as these services could expand the audience beyond the faithful who buy from stores. They could also give games a longer life, letting developers recoup more of the marketing money that goes into some of these titles. "If they're not successful, they're taken off the shelf after six weeks. If they are successful, they're taken off in 20 weeks," Tzruya says.

Exent's hope is to pair up with enough game developers to become a kind of disributor to the telco set. That is, an operator wishing to start a gaming service could go to Exent for a whole passel of games, rather than trying to get licenses from each developer.

Tzruya also sees a play for the digital living room, working in some fashion with a set-top box. Along those lines, the company is a strategic partner of Intel Corp. (Nasdaq: INTC), which has been pushing broadband multimedia via its Viiv processor technology.

Exent might also tinker with ad-supported games, a model that might appeal to the media companies that already derive their revenues from ads, Tzruya says.

— Craig Matsumoto, Senior Editor, Light Reading

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