By Christmas next year consumers will be able to buy a pounds 125 virtual reality headset to plug into an Atari Jaguar games console, giving them the sense of being part of the games they play. The console is likely to cost about pounds 150.
Jon Waldern, chief executive of Virtuality, said the move was unprecedented in bringing arcade-style games to a mass market. The company would convert for the Atari system a range of games from 'dungeons and dragons' type adventures to Buggyball, a cross between racing and football.
'We are the first to enter the market at the right price level and we hope this will be a blockbuster product,' he said. 'The headset adds a tremendous sense of actually being there in the game.'
Mr Waldern said royalties from the agreement would give a boost to Virtuality's revenues in 1995 and beyond. Last month the company reported a pre-tax loss of pounds 695,000 in the six months to June but forecast a move into profit next year.
Virtuality has already signed a licensing deal under which Sega will manufacture arcade systems and family amusement centres, described by Mr Waldern as mini-theme parks. IBM recently agreed to use the Virtuality technology for business applications, including training anaesthetists using virtual reality surgery.