Two Way TV Australia has signed a three-year deal to provide interactive games to PCCW’s Now TV in Hong Kong, currently the largest internet protocol television service in the world. The news comes as Macquarie Bank of Australia failed to secure a stake in PCCW.

Two Way TV Australia, which is listed on the Australian stock market, has a licensing arrangement with Two Way TV in the UK and has been looking to expand its interactive gaming services in the Asian market.

The company already operates interactive games on Foxtel and Austar in Australia and Sky Television in New Zealand. Two Way TV Australia has also signed a deal to provide interactive services to the News Corporation Star Group in Asia.

This is the first interactive games deployment on the Now TV IPTV platform, which provides over a hundred channels to subscribers in Hong Kong over a broadband network.

PCCW has attracted over 550,000 subscribers to the Now TV service since its launch in late 2003. The operator has previously used interactivity to provide video-on-demand services and the ability to purchase cinema tickets. A trial of the interactive games is now in progress, with a commercial launch scheduled for November.

Meanwhile, Richard Li, son of billionaire businessman Li Ka-shing, is cashing in his 23% stake in PCCW to a local deal maker, amid reports that the family may be lending him most of the money to buy out the stake.

The move comes after the Chinese Government, which runs China Netcom, with a 20% share in PCCW, indicated that it was opposed to a bid led by Macquarie Bank of Australia.