Xulu Entertainment , Inc.

And Xulu, with just 15 full-time employees, plans to push the envelope on several fronts. The company (whose name is pronounced Zulu) was founded by Mr. Solomon, known in Silicon Valley for helping to start Cadence Design Systems Inc., a maker of chip-development software, and vice president Nanci Magoun, whose past exploits include co-founding a robotics company called Smart Machines. They set out to use advancing technology to realize unfulfilled promises of the field known as virtual reality. Goggle-style viewers still aren't good enough yet. But today's large displays, properly placed in an arcade system or living room, can give some feeling of immersion. Xulu is also betting that current personal computers and accessory circuit boards, as well as Microsoft Corp.'s forthcoming Xbox video game system, can render realistic landscapes for users that log on to Xulu entertainment services. Downloaded software on those users' hardware will handle most graphics tasks. But powerful servers operated by Xulu are assigned an even bigger chore: mathematically modeling worlds full of computer-crafted objects, so they roll, tumble, bounce and collide in a realistic fashion. Other parts of this "physics-based" software, as Xulu calls it, synchronize action on the screen with motors to bounce users in arcade-style pods. Visitors to Xulu headquarters pass through a mock space lounge to climb into prototype simulators, cruising around a mythical planet called Eidolon Prime. Eric Hanson, the company's art director, created graphics for the sci-fi film "The Fifth Element." The staff also includes alumni from Lucasfilm Ltd. such as David Fox, who worked on a short-lived game center project for the film maker. Xulu eventually hopes to license its graphics technology and tools to other software developers, after demonstrating the possibilities itself. "Then we will be out there trying to get other developers to start developing content for our universe," Mr. Solomon says. "After that we will enable them to develop their own separate universes." He sees several revenue sources. Internet users will pay $5 to $10 a month to subscribe, much as they do to existing multiplayer game services. (Sony Corp.'s Everquest has 360,000 paying subscribers and is profitable.) Users also would pay to visit entertainment centers; Xulu expects to split the income and start-up costs with real-estate developers that specialize in entertainment centers. And advertising will contribute in several ways, including billboards and product placements in computer-generated cities, Mr. Solomon says.