Reality check.

• Author: Maley, Frank
• Position: Virtus Corp

For this cutting-edge software maker, 3-D also means daring, dauntless and, so far, profit-deficient.

Inside a squat, brown building more than 100 miles from the nearest ocean, Paul Wirth spends a steamy summer afternoon stalking a Russian submarine. His weapons: a computer keyboard and mouse.

Unfortunately, his foe, a software program being developed by Cary-based Virtus Corp., proves a worthy opponent. Within minutes, Wirth sees his own sub crippled by enemy torpedoes.

Sensing imminent defeat, he rams the Russian sub and destroys it, along with his own. "If you've got to go down, you might as well go down in style," says Wirth, a Virtus product manager.

During the next several years, Virtus will try to avoid a similar fate. The 6-year-old company is a pioneer in the budding field of 3-D virtual-reality software, which allows users to create realistic images on their computer screens. Its products have garnered praise from industry critics and from movie directors, architects and others who use them in their work. Best-selling author Tom Clancy was so taken by the technology that he invested seed money and agreed to be on Virtus' board of directors.

Evidence of the critical success greets visitors as soon as they walk through the front door. Two gold Oscarlike statuettes, each holding a computer monitor over its head, proclaim a national computer magazine's fondness for Virtus software.

It's one thing to have cool products. It's another to make money on them. Virtus, with revenues close to $10 million, has yet to post a full-year profit. "I'd trade all those gold awards for the money," founder and Chairman David Smith says.

Virtus stands at an important juncture in its short history. Until now, it's gotten by more on technical wizardry than business acumen. But it's time to start putting up some numbers. Company executives figure demand for 3-D virtual reality will boom now that new high-speed cable modems promise to speed lethargic graphics. They want to make sure Virtus is positioned to take advantage.

So they've enlisted some help. Earlier this year, Virtus defrosted its historically glacial cash flow by injecting about $3.5 million in venture capital. A partnership with Motorola gives it access to that company's resources. And, most significant, Smith hired his own replacement at CEO - a real businessman to take over for the whiz-kid computer geek who got things started.

Just getting money to launch the company was a Herculean feat, even though Smith's credentials include a bachelor's degree in mathematics from the University of Chicago and the 1988 development of the 3-D computer game The Colony.

Before The Colony, 3-D games gave players just the illusion of depth. But Smith's game, in which players try to escape an alien-held space colony, allowed them to navigate through a virtual environment and see all sides of objects. He got the idea while working at the Lord Corp. in Cary, where he created simulators for testing robots.

The game caught the eye of screenwriter Michael Backes, who asked Smith for help with the 1990 film The Abyss. He wanted to visualize an underwater drilling-platform set before it was built. Smith created a virtual set on his desktop computer.

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