Latest developer THQ is looking to acquire is Rainbow Studios, Phoenix-based animation and game company with 15-year history in videogame industry whose titles have included Motocross Madness PC series. Calabasas Hills, Cal., game maker THQ said it signed letter of intent to acquire Rainbow “subject to the satisfaction of certain conditions, including the execution of definitive documents.” Rainbow would become wholly owned subsidiary of THQ and latter would issue one million shares of its common stock to Rainbow shareholders. Additional financial terms weren’t disclosed. THQ said “acquisition is expected to close as soon as all necessary approvals and consents are obtained.” Acquisition would further strengthen internal development capabilities of THQ, which already has acquired game developers including Volition and Pacific Coast Power & Light. THQ said acquisition of Rainbow would enhance its ability to create games for next-generation consoles GameCube, PlayStation 2 (PS2), Xbox. In addition to Motocross, Rainbow developed ATV Offroad Fury for PS2, Tiger Woods PGA Tour 2000 for PC, several TV and game animation projects. Rainbow is developing PS2 games Matt Hoffman’s Pro BMX for Activision, Splashdown for Infogrames, Star Wars Racer II: Racer Revenge for LucasArts. Rainbow Studios Games Pres. Mark DeSimone said his company’s “development culture matches very well with the team at THQ.” Rainbow year ago acquired Motional Realms, developer of ReelMotion real-time simulator that uses physics and collision detection to realistically animate vehicles and other objects.

Blockbuster consumers who buy 52-week DVD rental card on Thanksgiving Day qualify for free Philips DVD player, Blockbuster announced Wed. Hardware giveaway is among aggressive 4th-quarter promotions planned to reach goal of having DVDs account for 30% of U.S. rental revenue by year-end. Other offers: (1) Customers who buy $150 Philips DVD player through Jan. 7, 2002, qualify for free 10-week DVD rental card. (2) Free 5-day DVD rental will be available Dec. 1-Jan. 31 to customers who bring in proof of purchase of any DVD player from any retailer.

Matsushita chose Tripath’s 2-channel digital power amplifiers for its CD car head unit. Panasonic unit delivers 4x100 w using 2 Tripath TA-2022 amplifiers, which sell at $16 each in 1,000 unit quantities. Tripath also formalized long-term development agreement with Alcatel to jointly market and sell asymmetric digital subscriber line (ADSL) central office reference design. Under agreement, Tripath is designing driver line circuits for Alcatel’s MTK-20850 DSL chipset that’s expected by year-end.

Loudspeakers generate sound by moving air, but the latest brainstorms from 2 audio companies would have customers sucking wind to build the speaker itself. British company Ellula Sounds (www.ellula.com) licensed NXT’s flat-panel driver technology to make small, inflatable speakers. When filled with air, speakers resemble brightly colored beach balls and are meant for use with portable stereos and PCs with low-powered amplifiers. NXT flat panel produces sound that makes entire inflatable resonate. Blowups cost about $45 per pair.

With goal of creating hemisphere-wide DTV standard, Advanced TV Systems Committee (ATSC) said it would create ATSC Forum to work with govts., broadcasters, manufacturers and others to advocate adoption of U.S.-developed DTV system and work for common standards. Robert Graves, paid chmn. of ATSC, will head forum as well as retaining current post until term expires Jan. 1. At that time, voluntary chmn. will be elected, and Exec. Dir. Mark Richer will become ATSC pres. Graves said Forum’s primary focus would be on Latin America.

EchoStar executive said Congress members had “been quite positive actually” about company’s proposed merger with DirecTV. David Goodfriend, EchoStar dir.-legal and business affairs, said elected officials “get it” and understand merger would create efficiencies allowing DBS to compete more effectively with cable. Comments came at Schwab conference in Washington Tues. Goodfriend said “there aren’t really plans” for merged company to become programmer, so he expressed interest in FCC’s extending its rules that prohibit exclusive contracts between cable companies and affiliated programmers.

Lexar Media will expand Memory Stick business to more than 30% of revenue by end of next year as it lessens reliance on SmartMedia technology, Chmn. John Reimer said. While Memory Stick, which Lexar sells in 8-128 MB configurations under license from Sony, now accounts for less than 2% of sales, business will grow as company starts marketing flash memory cards in first quarter 2002 manufactured in Singapore by 3rd party supplier Venture Manufacturing, Reimer said. Flash Electronics, based in Fremont, Cal., also assembled flash memory cards for Lexar in past, but Lexar moved most production to Far East to take advantage of low-cost manufacturing, Reimer said. Sony currently builds Memory Stick for Lexar, which signed licensing pact with CE giant in early 2000. As part of agreement, Sony, which has $2 million investment in Lexar, licensed latter’s flash memory controller technology.

Best Buy kicked off grand opening of Yonkers, N.Y., store with 10%-off coupon in zip-coded mailing to households in vicinity of N.Y.C. suburb. Offer is good through Thanksgiving weekend but excludes Bose audio products, clearance merchandise, items with extended financing beyond 6 months.

Bluetooth technology will reach mass market with introduction of Bluetooth-enabled mobile phones, handheld PCs and PDAs and wireless headphones, Arc Group reported. Bluetooth connects mobile device via unregulated 2.4 GHz band and provides 1 Mbps connection with range of 30 ft. Market for Bluetooth cellphones will grow to 98 million in 2003 from 26.2 million devices in 2002 and 1.5 million this year, Arc predicted: Combined General Packet Radio Service/Bluetooth handsets would “allow consumers to bridge between the Internet and their personal portable devices, providing wireless mobility with real benefits.” Introduction of 3rd generation wireless services will further increase value of Bluetooth-enabled phones, it said. Several automakers will use technology to integrate mobile phones with onboard telematics systems by 2003 model year. Handheld PCs and PDAs also will drive acceptance of Bluetooth, but majority of devices will be enabled through adapter products such as compact flash cards, clip-on devices or Bluetooth sleeves, report said, and possible “killer application” for Bluetooth is wireless headphone. ARC Group estimated “mass market” for headphones would reach 158 million units in 2006 from 5.8 million next year.

Koss said first quarter profit dipped to $1 million from $1.3 million as sales slumped to $8.9 million from $9.8 million on sharp drop in licensing revenue. Royalties under licensing agreement with Orient Power subsidiary Jiangsu Electronics Industries declined to $167,714 from $293,888 as sales of Koss branded CE products were “dramatically affected by depressed market conditions” in quarter, Koss said in SEC filing. Koss recently extended agreement with Jiangsu through Dec. 31, 2002. It has similar agreement with Logitech for PC speakers, although licensing revenue from that pact wasn’t disclosed. Gross profit slid to 39% from 40%. Koss also amended $10 million credit facility with LaSalle Bank in Oct. to extend it through Nov. 1, 2002. Koss had drawn $3.4 million on facility as of Sept. 30.