Frost & Sullivan, the global market research and consulting firm, has awarded its 1997 Market Engineering Product Award to SegaSoft's HEAT.

In "Online Gaming: Innovators Beat Imitators," a 250-page report scheduled for publication later this month, Frost & Sullivan analysts look at more than 50 online gaming ventures. Of these, 10 are profiled. Singled out for its overall excellence, HEAT.NET is awarded top honors for its design and unique features.

"We are delighted to be honored by Frost & Sullivan," said Gary Griffiths, SegaSoft president and CEO. "This prestigious award validates our claim that HEAT offers the very best online gaming experience."

"We looked at every major online game aggregator (online gaming companies which offer third-party content) and found that most have at least one or two major weaknesses, either in their product offerings or in their business models," said John McCormick, industry analyst at Frost and Sullivan. "SegaSoft combines premium content with a smart business plan to offer what Frost & Sullivan feels to be the premier product among online gaming aggregators."

Frost & Sullivan analysts awarded HEAT top honors on the basis of five key attributes:

-- LEDOs, or limited edition digital objects, are permanent, clone-proof properties (such as special weapons, characters or skills) that players can buy, sell, trade, as well as win or lose (in "for keeps" competition). Unique to HEAT, LEDOs enable a whole new revenue stream for SegaSoft by creating on open market economy where members can determine the value of the LEDO based on scarcity and desirability.

-- Degrees are frequent player points awarded to HEAT members for such activities as participating in HEAT events or winning tournaments. HEAT Premium members can use Degrees for discounts, free merchandise and to enter special events. Degrees, like their airline counterparts, build player loyalty.

-- In-house software development. Where many online aggregators rely strictly on outside developers for content, SegaSoft develops some of its titles in-house, including HEAT-exclusive games like NetFighter, the first fighting game designed for the Internet, and Scud: Industrial Evolution, also designed from the bottom up for online play on HEAT.

-- User Interface. The Frost & Sullivan report praises SegaSoft for its design and development of the HEAT interface.

-- rIPX is a SegaSoft technology that enables virtually any multiplayer PC game to be played across the HEAT network.

Launched into full commercial operation in September, HEAT has already attracted more than 93,000 registered users. You can visit the award-winning site located at www.heat.net.