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Investors eye CD-ROMs
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May 29, 1997: 2:22 p.m. ET
Analysts say online video-games aren't ready for prime time
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NEW YORK (CNNfn) - Three venture capital firms have pumped $9 million into a Northern California video-game company, a sign that the CD-ROM business may be reviving.
Canaan Partners, U.S. Venture Partners and Scripps Ventures teamed up on the capital injection into Palladium, a producer of titles such as Pyst and Family Gathering, Variety reported Thursday.
Industry analysts said the venture is a sign that the CD-ROM, given up for dead last year, may still be a good investment.
CD-ROMs were hot three years ago until the Internet lured venture capitalists to online companies. But analysts said the World Wide Web hasn't matured as a vehicle for entertainment.
Many users find online games too slow, analysts say, resulting in a resurgence in video games based on CD-ROM technology.
"A lot of money is going into companies that are developing portable platforms," said Mike Yocco, an analyst at Paul Kagan & Associates. "People are getting back into PC games."
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