Sega's new chip

A MICROCHIP based on Videologic's PowerVR Series 2 technology will be the graphics engine in Sega's new "Naomi" system for arcade game machines, Videologic said yesterday.

Videologic said the Sega decision is the second step in Power VR's three- market cross-platform gaming strategy and confirms the company's entry into arcade games. Videologic shares gained 1p to 59p.

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