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December 14, 2007

Wii shortage benefits North Bend; Wii 'rain checks' under the tree

Posted by Benjamin J. Romano at 8:29 AM

Fresh off of the report of his company's blow-out performance in November, Nintendo of America President Reggie Fils-Aime held a conference call with reporters and analysts this morning to crow a bit and offer an update on manufacturing and distribution of the best-selling Wii.

"We expected Wii to perform extremely well within the historic launch parameters of the video game industry," he said. "What we didn't expect was to write an entirely new chapter in that history and to do that so fast."

The 6 million units Nintendo has sold in the U.S. since the Wii was launched in November 2006 is "unheard of in our industry," Fils-Aime said.

Nintendo has maxed out its production at 1.8 million a month. That's the limit because of supplier capacity, Fils-Aime said. The North American market received about half of that capacity in November with the remainder going to Europe and Japan.

To make sure the units coming into the United States get to retailers as quickly as possible, Nintendo has tripled its work force at its North Bend distribution facility, Fils-Aime said. (This summer, Nintendo reported about 1,000 employees in Washington state, though the company didn't break out how many were at North Bend.)

Fils-Aime said Nintendo is trying to "alleviate frustration" among shoppers who have not been able to find a Wii. He also discouraged people from paying resellers more than the full price of $250.

For parents who want "something to put under the tree," Nintendo is launching a rain check program with retailer GameStop. On Dec. 20 and 21, shoppers can pay up-front for a Wii and get a certificate guaranteeing them a console some time in January. Fils-Aime said there are "tens of thousands" of these rain checks that will be available across GameStop's roughly 3,000 locations.

He also said Nintendo expects sales to continue at pace after the first of the year.

"We have no date targeted for when our production no might change, either up or down" from 1.8 million units a month, Fils-Aime said.

Hotly anticipated new accessories, including a wireless wheel for driving games and a balance board for a new fitness program, are due out early next year -- maybe in time for those New Year's resolutions.

December 13, 2007

Nintendo outsells all comers in November

Posted by Benjamin J. Romano at 3:31 PM

NPD Group just released its November video game sales figures and it was a whopper of a month. U.S. video game industry sales came in at $2.63 billion in November, up 52 percent from a year earlier.

In the hardware race, Nintendo's products were the clear leaders. The Wii console sold 981,000 units in the U.S. and demand is still unfulfilled.

"The Wii had its best-selling month yet, besting last December by 60 percent," NPD video games analyst Anita Frazier said in comments released with the November stats. "Since there is still an evident inventory shortage at retail, it's difficult to say just how high sales could be if you took that issue out of the equation."

Microsoft's Xbox 360 also had a hot-selling month, its second-best since December 2006, according to Frazier, with 776,000 units sold.

The previous-generation Sony PlayStation 2 outsold the current-gen PlayStation 3 by 30,000 units: 496,000 PS2s were sold, compared with 466,000 PS3s.

In the portable category, which Nintendo's PR people have been urging reporters to take a closer look at, the Nintendo DS sold 1.53 million units. Sony's portable, the PSP, sold about a third as many units.

On the games front, the leader was "Call of Duty 4: Modern Warfare." A total of 2.01 million copies were sold. More than three-quarters of the titles were purchased for the Xbox 360 with the remainder going to PS3 owners. The No. 2 game was "Super Mario Galaxy" for the Wii, with 1.12 million units. "Assassin's Creed" made a strong debut, selling 1.36 million copies -- again, split about three-quarters to one-quarter in favor of the Xbox 360. (NPD ranks software sales by platform, so even though "Creed" moved more total copies, it didn't take the No. 2 spot from "Mario" because it was split across two platforms.)

Frazier noted that "Assassin's Creed" was the "best-selling new IP" -- meaning not a sequel -- in the month it was launched. "Gears of War" last owned that distinction.

There was plenty of coverage during the month of two more peaceful titles thought to appeal to a broader audience: MTV's new "Rock Band" and the established "Guitar Hero III: Legends of Rock" from Activision. The latter title sold 967,000 copies -- on the PS2 -- plus 426,000 on the Wii and about 500,000 more on the other platforms (PS3 and Xbox 360) for a total of 1.9 million.

As for "Rock Band," Frazier said in her e-mailed comments that its 382,000 total sales may be viewed as disappointing, but initial shipments were limited. "This is the kind of title that can easily build momentum in December and beyond as word of mouth spreads," she added.

NPD offered an interesting subtext in this month's report. Microsoft has touted its strong game and accessories attach rate -- the average number of games and add-on hardware products sold per console. But the Wii had a stellar month for accessory sales. "Four of the five best-selling accessories for the month were Wii controllers," Frazier said. "The Wii Zapper, which debuted in November, sold 232,000 units. The second-best selling accessory for the month was the PS3 wireless controller at 282,000 units."

December 11, 2007

Pokemon USA president resigning, and did you know there's a Bellevue office?

Posted by Benjamin J. Romano at 2:55 PM

When we got an e-mail informing us of the pending departure of Akira Chiba, president of "Seattle-based" Pokemon USA, we were a bit perplexed. Seattle-based? We didn't even know Pokemon USA existed, let alone had an office here.

Well, the company in charge of the ultra-popular kids entertainment brand in the United States does in fact have a 45-person Bellevue office that handles the trading-figure game, trading-card game and more product-focused stuff, said J.C. Smith, marketing director of Pokemon USA. It's not quite a headquarters, though. The "Seattle-based" descriptor was in error.

So what's Pokemon USA doing here? Being close to Nintendo is part of it -- Pokemon has been a popular title on several Nintendo platforms -- although most of that relationship is managed out of the New York headquarters, Smith said.

Anyway, the outgoing president, Chiba, "joined Pokemon USA in 2002 when the company's New York office was established, the brand's first corporate headquarters outside of Japan," according to the company's release. He's off to "to pursue other opportunities" and will be replaced by Kenji Okubo, previously executive vice president and head of Pokemon USA's Seattle office, effective Jan. 1.

December 10, 2007

'Halo 3' named Dew most-addictive game, but did others have a chance?

Posted by Benjamin J. Romano at 4:06 PM

Microsoft sent out a news release about the Xbox 360 titles that cleaned up in Spike TV Video Game Awards last night. Clearly, a strong showing. But I'm somewhat skeptical -- maybe cynical -- about one particular category that "Halo 3" won.

First, let's recall the marketing hype and consumer-product tie-ins that proliferated around the launch of "Halo 3" in September. Mountain Dew and Microsoft served up a "Halo 3"-branded drink called Mountain Dew Game Fuel, which boasts an "invigorating blast of citrus cherry flavor and added caffeine for maximum intensity." It was billed as the first beverage co-branded with a video game.

Now comes the Video Game Category of "Most Addictive Game fueled by Mountain Dew," which Microsoft pointed out in its press release as "the only category with consumer online voting." The nominees are: "The Orange Box," from Valve; "Guitar Hero III: Legends of Rock," from Activision; "Wii Sports," from Nintendo; and "Halo 3," from Microsoft Game Studios.

Is it any surprise that the first video game branded paired up with a beverage would win in the category sponsored by that beverage? Or maybe this was legitimately the fan favorite for most-addictive game -- also plausible. Thoughts?

November 29, 2007

EA boss calls in-game ad revenue forecasts 'wildly high'

Posted by Benjamin J. Romano at 3:53 PM

I'm thinking Alex St. John over at Wild Tangent would agree wholeheartedly with John Riccitiello, CEO of Electronic Arts, the biggest video game publisher, who said today:

"You can't be as bullish as analysts are on in-game advertising and be sane," he said. "In-game ad expectations are wildly high."

One widely reported forecast by the Yankee Group has in-game ad revenue reaching $971 million by 2011 up from just $77.7 million last year.

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Riccitiello's comments came in an interview with Dow Jones.

Microsoft, for one, has been particularly bullish on in-game advertising, acquiring the Massive Network for as much as $400 million, according to unconfirmed reports, last year. Here's an in-depth look at Massive's business from earlier this year.

That deal and others helped build hype around the nascent in-game ad business, Riccitiello told Dow Jones. EA, which controls several top titles in the sports category that advertising leaders say are a natural fit for in-game promotions, is cranking out about $30 million a year from in-game ads -- a small slice of total revenue.

I spoke with St. John earlier this month. He says in-game advertising is much less efficient than other options his company offers in the category of around-game advertising. Particularly for casual games, more flexible models are working better at Wild Tangent. Some examples include giving advertisers the opportunity to sponsor game play sessions; and giving players the choice of viewing a short pre-roll ad while a game is loading, or paying for the game session.

November 27, 2007

Activision CEO says console prices need to drop

Posted by Benjamin J. Romano at 4:04 PM

Activision today boosted its outlook for the December quarter and fiscal year on the strength of two hot games, "Call of Duty 4" and "Guitar Hero III: Legends of Rock."

CEO Bobby Kotick, perhaps feeling flush with that success, started dishing out advice to some other big players in the video game business.

At the Reuters Media Summit, Kotick suggested that Microsoft's Xbox 360 and Sony's PlayStation 3 will have to come down in price to $199 to gain the mass-market appeal Nintendo has achieved with the Wii.

"The Wii at its [$250] price point is now setting a standard and an expectation, and people say, 'Well, the Wii is less complex technically.' I don't think that really matters as much to the consumer. ... In the next 24 months they all will need to be at that $199 price point, and you can imagine Nintendo will be down to the $129 price point over the next few years," Kotick said, according to this Reuters story.

The PS3 is down to $400 for the 40 gigabyte version. The Xbox 360's least-cost alternative is $280.

Meanwhile, Nintendo executives are again banging the scarcity gong and reporting the best week of Wii sales since the console hit the market. Here's Reggie Fils-Aime from an AP story: "I couldn't find a single Wii system on the shelves -- literally as I was walking into a Wal-Mart at 11 a.m., someone was walking out with the last one."

I wonder if that shopper thanked Reggie.

November 26, 2007

For 'Cyber Monday' shoppers: Some video game notes

Posted by Benjamin J. Romano at 12:40 PM

A few interesting articles and tidbits from the gaming world today:

The New York Times has an interesting take and detailed history of the battle of the bands raging between "Guitar Hero III: Legends of Rock" from Activision and MTV's "Rock Band," two hot-selling, multi-platform titles.

Microsoft today announced another social-networking feature that will be added to the Xbox Live Dashboard with a Dec. 4 update. Gamers will be able to expose their friends lists to everyone or just their own friends. You know the old song, make new friends, but keep the old. That's the idea here. The company's press release on this feature noted there are now 8 million people on Xbox Live.

No big surprise here, but November online video game sales in the weeks before "Black Friday" were up 134 percent from a year ago, according to comScore. That's the fastest growing e-commerce category and outpaced the overall growth rate for retail e-commerce (excluding travel sales) of 17 percent in the period.

Update: Sony just crowed about its Black Friday sales. Here's the digits: PlayStation 3 sales up 245 percent from Black Friday 2006 (when the new console had been on the market only a matter of days and was significantly more expensive than competitors' consoles). Since dropping its prices and introducing a 40 gigabyte model Nov. 2, PS3 sales are up 298 percent.

October 18, 2007

'Halo 3' drives huge month for Xbox 360

Posted by Benjamin J. Romano at 3:32 PM

As promised, Microsoft's top video game title, "Halo 3," on sale for less than a week in September, fueled the company's broader video game business, according to just-released numbers from researcher NPD Group. (Update: Turns out NPD counts September differently than I do. Their September is longer, so the figures in this story actually represent 12 days of sales.)

NPD analyst Anita Frazier called the 3.3 million copies of the game sold in the U.S. last month "phenomenal." That figure was nearly double the total units sold under the next nine best-selling titles in September. (It also includes copies that eager fans pre-ordered online in the months of hype leading up to the game's release.)

"True to its name, the game rubbed off on hardware sales too -- the Xbox 360 realized it's best month ever in unit hardware sales outside last holiday season," Frazier said in a statement. "If ever there was a doubt that great content drives hardware acquisition, this should put that doubt to rest."

For the first time in several months, Microsoft's Xbox 360 outsold the Nintendo Wii, which also had a stellar September.

Here are U.S. console sales for September, from NPD:

Xbox 360, 527,800

Wii, 501,000

PlayStation 3, 119,400

PlayStation 2, 215,000

Next month's report will show whether today's PlayStation 3 price cut by Sony will juice its sales.

Holiday shopping for game consoles gets interesting

Posted by Benjamin J. Romano at 10:47 AM

Not surprisingly, Sony is lowering the price of its PlayStation 3 console ahead of the holiday shopping season. The price of the top-end 80 gigabyte model was cut by $100 to $499. It also announced a new 40-gigabyte model for $399 -- cheaper than Microsoft's highest-end Xbox 360.

In August, Microsoft announced a price cut of its own: The low-end Xbox 360 "core" costs $280; the midrange version is $350; and, the high-end "elite" system is $450.

Sony's move comes on the same day the NPD Group is expected to release its latest market-share figures for September. This will be the first month to show the impact on Xbox 360 sales of the blockbuster game "Halo 3," which generated $170 million in U.S. sales in the 24 hours after it was released Sept. 25. Microsoft executives had expected perhaps a third of "Halo 3" purchasers to buy an Xbox 360 at the same time. Check back this afternoon for details.

Meanwhile, here's what the U.S. market looked like in August, according to NPD (the first number is August sales, the second is life-to-date sales):

Wii: 403,600; 4 million

Xbox 360: 276,700; 6.3 million

PlayStation 2: 202,000; 39.1 million

PlayStation 3: 130,600; 1.75 million


October 8, 2007

Toyota advergame on Xbox Live to promote Yaris

Posted by Benjamin J. Romano at 3:28 PM

People on Microsoft's Xbox Live gaming service can download a free game that's actually an advertisement for a car. The game, Yaris, debuted today, according to this New York Times story. It's the first free advergame to be distributed over Xbox Live Arcade, the story says.

The Times' coverage goes over the other advergames that Microsoft's Xbox team has been involved in, most notably the ones promoting Burger King, which were sold with burgers and fries, only at Burger King restaurants. Microsoft Entertainment and Devices Division President Robbie Bach told an audience earlier this year that he wasn't expecting the success of the Burger King promotion.

"If you had asked me a year ago, 'Gosh, you're going to do a promotion with the Burger King on Xbox Live Arcade and it's going to generate headlines in the business press about how we lifted Burger King's sales,' I would have been truly surprised," Bach said at Microsoft's Mix conference in May. "... It had a demonstrable impact on their financial results."

More companies are jumping on the video game advertising bandwagon, as the Yaris example illustrates. There are several different flavors of video game advertising, and Microsoft is wading deeper into all of them. Check out this story on the workings of Massive, the in-game advertising network Microsoft acquired.

Sony, too, is moving on its own into in-game advertising, according to this story from paidContent.org.

September 17, 2007

It's official: Too much Internet use can kill you

Posted by Kristi Heim at 1:46 PM

A man in China dropped dead after playing online games for three days straight, according to reports from Chinese media today and this story.

The 30-something man from Guangzhou died Saturday after being rushed to the hospital from the Internet cafe, the Beijing News said. Exhaustion was given as the most probable cause.


CANCAN CHU/GETTY IMAGES

Most of the customers at this Internet cafe in China are students.

It's hard to know how much of this is real and how much is state propaganda designed to discourage Web addicts. Chinese authorities have been cracking down on Internet content and Web-surfing activities, including banning new cybercafes and limiting the time users can spend playing games online.

As for this poor guy from Guangzhou ... maybe his avatar can live on in Second Life.

August 22, 2007

'Halo 3' at IMAX impresses

Posted by Benjamin J. Romano at 9:43 AM

Nate Robinson, one of our intrepid interns, went to last night's sneak preview of "Halo 3," and brought back this report. And be sure to check out his video footage below -- including a fan who says that when the game comes out "it's going to be the biggest skip day of the year."

Seattle videogame fans were privy to a special treat Tuesday night, courtesy of hometown superstars Bungie Studios. The team behind the upcoming blockbuster "Halo 3" reserved the Seattle Center's Imax theater for a one-of-a-kind preview to show off their game's new features to, perhaps, the crowd that would appreciate it the most.

More than 500 people turned out for the event, far more than Bungie had expected, said Bungie staff writer and community figurehead Frank O'Connor. The Kirkland-based team had decided just the day before to hold the preview, but such short notice wasn't a problem for the Halo faithful -- some of whom waited in line for 12 hours and came from as far away as Oregon.

Those who made it into the theater were rewarded with the first public gameplay demonstration of "Halo 3's" single-player campaign, as well as a quick glimpse at the new multiplayer-specific gameplay options. Bungie showed off a few new vehicles (the Chopper, a motorcycle from Hell, and the Elephant, an enormous drivable base) and weapon types (some long-awaited, some wholly original). The majority of the campaign demo was spent tooling around in the game's third mission, Tsavo Highway, but the fans, who cheered heartily at every opportunity, clearly didn't mind.

The new multiplayer options, however, appear to add more than just new toys and refinements to a solid formula. New to "Halo 3" is a game type dubbed "The Forge" -- a mode in which the players are free to manipulate the environment as they see fit on-the-fly, promising a seemingly endless variety of gamplay options normally reserved only for mod-friendly PC games. This, combined with the previously announced ability to save, play back and edit video replays of matches, means the game's famously popular multiplayer just got that much better and hard to put down.

"Halo 3" comes out Sept. 25 for Microsoft's Xbox 360.


August 21, 2007

More perspectives on in-game advertising

Posted by Benjamin J. Romano at 8:45 AM

Adweek has a broad look at the market for in-game advertising and the fact that it has not lived up to the hype of just a year ago from in-game advertising purveyors, including executives at Massive.

This story provides great ad-industry context to help understand our recent profile of Massive, which Microsoft acquired, and its business model. I also focused more on how Massive fits into Microsoft's advertising strategy.

The Adweek story outlines several gripes advertisers and analysts have with dynamic in-game advertising as it exists today, including:

Lacking impact and interactivity;

Effectiveness, execution and measurement tools remain "iffy";

Distribution mainly to the PC (read: hard-core gamers), but not as much happening on the consoles (read: the TV in the living room).


August 9, 2007

Pearl Jam concert lyrics censored by AT&T

Posted by Benjamin J. Romano at 9:29 AM

Pearl Jam was rocking out at Lollapalooza on Sunday, per usual, this time riffing on Pink Floyd's "Another Brick in the Wall" during a performance of "Daughter." Lyrics criticizing the president were cut from AT&T's Web cast of the event.

According to the Seattle band's Web site, the lyrics "George Bush, leave this world alone" and "George Bush find yourself another home" were censored.

The concert organizers did a bit of reporting to find out what the hell happened: "When asked about the missing performance, AT&T informed Lollapalooza that portions of the show were in fact missing from the Web cast, and that their content monitor had made a mistake in cutting them."

PJ was not happy:


This, of course, troubles us as artists but also as citizens concerned with the issue of censorship and the increasingly consolidated control of the media.

AT&T's actions strike at the heart of the public's concerns over the power that corporations have when it comes to determining what the public sees and hears through communications media. ...

If a company that is controlling a Web cast is cutting out bits of our performance -- not based on laws, but on their own preferences and interpretations -- fans have little choice but to watch the censored version.

What happened to us this weekend was a wake up call, and it's about something much bigger than the censorship of a rock band.

The band plans to post an uncensored version of its performance on its Web site soon.

Get ready for 'Halo 3' marketing blitz

Posted by Benjamin J. Romano at 8:20 AM

Clear the streets. The "Halo 3" parade is beginning.

Microsoft today announced that the third installment of its hit video-game series, due out Sept. 25, has already sold more than 1 million preorder copies.

Brier Dudley explored just how important the success of "Halo 3" is to Microsoft in his column Monday.

Now comes the marketing effort that underscores that importance. In addition to the preorder "news," Microsoft lifted the lid on its marketing plans for the game, and the "Halo 3" branded Xbox 360 is just the beginning. Think major motion picture, Microsoft says.

The company is doing promotional deals with consumer brands that it says set a precedent in video-game marketing.

Mountain Dew is rolling out the first beverage co-branded with a video game, Mountain Dew Game Fuel, which boasts an "invigorating blast of citrus cherry flavor and added caffeine for maximum intensity." (Warning: Do not pour beverage into Xbox 360, it will not improve performance.)

Should you choose to leave your Xbox 360 for long enough to hit up 7-Eleven, treat your "Halo 3" withdrawal tremors with "Halo 3" Slurpee cups and other in-store promotions.

If you need a new car, Pontiac would like you to come down to select showrooms where you can play the game before it's released. And 1,000 people who buy a G6 GXP Street will get a copy of the game. (This seems like a promotion that might be a better fit with "Grand Theft Auto." Then again, maybe not.)

Burger King, which has successfully partnered with the Xbox 360 in the past, will plaster the "Halo 3" marketing materials on its giant cups of pop and French fry containers. (They're called FRYPODS. Does Steve Jobs know about this?)

Comcast is also getting into the act with user-generated content and video downloads related to the game.

August 8, 2007

EA, Microsoft revolving door spins again

Posted by Benjamin J. Romano at 1:17 PM

Microsoft today announced that John Schappert has been named to head the company's Xbox Live efforts in a newly created role within the Interactive Entertainment Business.

Schappert comes to Microsoft after nearly 10 years with Electronic Arts, the No. 1 video game publisher. If that sounds like a familiar career path, it is. On July 17, Microsoft announced that Peter Moore, head of the Interactive Entertainment Business, is leaving to become president of EA Sports. In his place, Microsoft hired Don Mattrick, who's last job before coming to Microsoft as a consultant in February was with ... wait for it ... EA.

Schappert was an executive vice president at EA in charge of central technology, operations, EA online and the office of the chief creative officer, according to Microsoft's announcement today.

Schappert's purview at Microsoft is the Xbox Live online gaming network, which has more than 7 million members. In addition to multi-player games, the network offers video downloads and communication services, such as instant messaging. He will also oversee Microsoft's casual games business.

So, should the growing roster of EA alums at Microsoft and vice-versa raise the hackles of competitors?



Analysts give insight on 'connected console' market

Posted by Benjamin J. Romano at 10:11 AM

As Microsoft's Xbox 360 price cut takes effect today, analysts are taking a broad look at the marketplace and focusing on additional features beyond playing games.

Billy Pidgeon, a veteran analyst with IDC, notes that the Xbox 360, PlayStation 3 and Wii all have the ability to connect to the Internet and store downloaded content, giving rise to three new business models beyond hardware and software sales: "premium subscription fees, paid downloadable content (DLC), and a fledgling advertising market."

He said in a press release that the "use of connected consoles is expanding the business opportunities and cash flow this console cycle" and has "huge potential."

The IDC report predicts:

"Revenue derived strictly from connected consoles will grow from $981 million in 2007 to $10.5 billion in 2011. In 2007, online console revenue will be 2.5% of total global video game market revenue, including console and hand held hardware and software revenue. By 2011, revenue from connected consoles will represent 18.6% of total market revenue."

Meanwhile, a study from the NPD Group indicates gamers are not always aware of the additional features in their next-generation consoles:

"While playing games is the primary function of all video game systems measured in the study, it should not come as a surprise that, despite marketing efforts to educate the consumer, awareness of functions that extend beyond gaming are comparably lower.

"... PS3 owners are downloading additional content as frequently as Xbox 360 owners, but unlike 360 owners, the majority of owners and likely purchasers are simply unaware that this is even possible on a PS3. Were awareness higher, one could logically deduce that download activity would increase as well."

NPD analyst Anita Frazier said additional features will become more important in the future, but "currently the importance of these features and the awareness among consumers of these features is far from universal. To make headway in this 'next-gen' race, manufacturers still need to be primarily concerned with the quality and entertainment value of the games themselves."

August 7, 2007

Why Microsoft didn't acknowledge Xbox 360 price leaks

Posted by Benjamin J. Romano at 10:21 AM

"What a surprise," Billy Pidgeon, the veteran video games analyst at IDC, said sarcastically when asked about the Xbox 360 price cut Microsoft announced last night.

Really there was no surprise. Everyone saw this coming. Not because of Sony's price cut -- which turns out to be not much of a price cut at all, once the $500 60-gigabyte PlayStation 3s sell out and all that's left is the $600 80-gigabyte version. In fact, another analyst, Van Baker with Gartner, said he didn't see any serious pressure from the marketplace for the Xbox price cut. (He also doesn't see Microsoft competing with Nintendo for the same set of customers, something other analysts and executives might disagree with.)

No, the reason everyone saw it coming was because, well, we saw it.

"There are people at certain big box retailers that like to leak fliers," said Pidgeon, referring to the scanned copies of print advertisements from Circuit City and Toys R Us, which appeared at game-enthusiast sites such as Joystiq last month, showing the exact price cuts Microsoft just announced.

I asked Xbox 360 group product manager Aaron Greenberg why, when there was this obvious evidence the cuts were coming, executives decided to stay mum and make the announcement on their own terms. Here's what he said:

It's interesting, we've had some internal debate here about like how many people really read some of those blogs. I mean while there's been some fuzzy, camera-phone photos like, we haven't seen any mainstream media covering it. I think it's still been pretty much in the speculative space and you know, for us, we know there's always a risk that when you're timing with prices like this and you want to have real, serious integration with retail -- every major retailer is doing a big Sunday ad -- these things are always at risk and we wouldn't trade the risk of those leaks for not having the retail tie-back, so we felt like we made the right bet there. But still we also don't want to just take the leaked news and feel like we have to confirm stuff when certain details are there; some of it's right and some it's wrong. We want to be able to, as we planned, announce it when we're ready to.

Another little detail that came out of Monday's announcement: the limited edition "Halo 3" version of the Xbox 360, priced at $400, and decked out in green and gold, and, Greenberg said, it will have the same HDMI (high-definition multimedia Interface) connection as the "elite" version, which goes on sale tomorrow for $450. The upside of an HDMI connection is that it is a single cable that carries both HD video and audio signals.

August 2, 2007

Grand Theft Auto IV delayed until 2008

Posted by Benjamin J. Romano at 2:13 PM

This could put a damper on the holiday video game season: "Grand Theft Auto IV," one of the most-anticipated games of the year, will not be released until sometime in early 2008, according to publisher Take Two Interactive Software.

The game's release is being moved from the company's fiscal fourth quarter, which ends Oct. 31, to the second quarter of its 2008 fiscal year, which ends April 30, 2008, "due to additional development time required to complete the title," according to a statement on the Take Two's investor relations Web site.

The game was to be released for Sony's PlayStation 3 and Microsoft's Xbox 360 simultaneously.

That apparently complicated development.

"Certain elements of development proved to be more time-intensive than expected, especially given the commitment for a simultaneous release on two very different platforms," Take-Two Chairman Strauss Zelnick said in a statement.

"GTA IV," the next installment of the controversial and wildly popular game that features car jacking and hooker-shooting, was going to be one of a triumvirate of titles to drive Microsoft's Xbox 360 during the all-important holiday season, the other two being "Madden NFL '08" and Microsoft's exclusive "Halo 3" title.

Update: It appears the schedule for the Xbox 360-exclusive "GTA IV" episodic content remains unchanged by this. According to the statement, the episodic content, which will be available via download from Xbox Live, is still in the 2008 line up, where it always has been.

Could this delay help Microsoft when "GTA IV" is ultimately released? The first installment of the episodic content was due in March 2008, according to comments from Take-Two CFO Lainie Goldstein during the company's June 11, 2007 conference call. Goldstein also acknowledged that Take-Two will be paid in two $25 million chunks for the two exclusive installments of episodic content -- for a total, eye-popping price tag of $50 million (a figure that has not been confirmed by Microsoft).

If the first episode of Xbox 360-exclusive content is released in March 2008 -- it's hard to imagine it coming before the game itself -- that would put it within weeks of the release of the game itself.

July 31, 2007

CBS Sports exec on for video game broadcasts

Posted by Benjamin J. Romano at 1:31 PM

I got a chance to speak with Rob Correa, senior vice president of programming for CBS Sports, this afternoon about the broadcast debut of competitive video-gaming last weekend. CBS Sports filled an hour of its Sunday broadcast with the World Series of Video Games' Louisville, Ky,, tour stop.

Correa didn't give out any audience data, but noted that summer afternoons are not exactly prime time.

"Sunday at 12 noon in late July is not the easiest time period to get people to watch, but all in all we're satisfied," he said.

He acknowledged that the video game broadcast was a departure from the network's usual sports programming -- highlighted by March Madness and the Masters -- but he still expected some audience overlap.

"Every audience overlaps some ... particularly in sports," Correa said. "We don't have [demographics] yet, but clearly we figured it would be potentially a younger audience than a lot of our core sports programming."

Correa said it's too early to tell whether video games will become a regular part of CBS Sports line up. Two more WSVG broadcasts are planned this fall; a third episode scheduled for August was postponed, he said.

July 30, 2007

Why play video games when you can watch them on TV?

Posted by Benjamin J. Romano at 11:27 AM

Did anyone tune in to CBS on Sunday to watch the World Series of Video Games' Louisville, Ky., tour stop? Yeah, that's right. Video games were broadcast on network TV on a Sunday afternoon in the middle of summer.

There were plenty of articles previewing this apparent first, but I've yet to see anyone report on the broadcast, prompting the question: Did any one watch it?

CBS' schedule lists another WSVG broadcast coming up Aug. 19, and the WSVG itself had a blog item back in May crowing about the four-episode deal it linked with the network.

I've put a call in to the folks at CBS Sports to ask whether they were satisfied with the initial broadcast and whether this might join the Masters and March Madness as regular events on the broadcaster's calendar.

July 26, 2007

FAM: Bach reiterates profitability in fiscal 2008

Posted by Benjamin J. Romano at 1:55 PM

Robbie Bach is breaking down the Microsoft Entertainment and Devices Division to kick off the afternoon session here. He reassured investors who have watched the division lose billions of dollars over the last several years.

"We said last year we are going to drive this business to profitability in fiscal 08," Bach said. "We are right on track to do that. ... And we believe we can have sustained profitability going forward."

He gave no indication of how much profit the division might deliver.

Like CEO Steve Ballmer did this morning, Bach lamented the $1 billion charge the company took in the fourth quarter related to the quality problems with the Xbox 360. He reiterated that it was something the company had to do to stand behind its product.

"Certainly a key focus for us right now is quality," Bach said. He said there's no specific component to blame for the rate of Xbox 360 hardware failures, but rather it was a Microsoft design problem with multiple components involved.

Despite the charge, he sees the business reducing its manufacturing costs.

"We are right on track with where we expected to be with cost reduction. That is a key driver in this business," Bach said, offering no detail about when that cost saving would translate to a price reduction.

"We have a very specific plan with what we're going to do with pricing. We're just not going to talk about it today," he said. (The company today announced a lower price for its HD DVD player, sold as an accessory to the Xbox 360.)

Bach quickly reviewed other areas:

Music: He said the Zune music player has sold more than 1 million units since launch and has about 10 to 12 percent of the hard-drive based player market.

"You are going to see us continue to invest in this business," Bach said, adding that it will likely be a three- to four-year effort.

This year, the company, as it has said, will release new Zune software, devices and features. He also plans to invest in expanding the Zune brand out of the "hardcore niche music space" where it is now.

Video: Bach said the company will expand its Xbox Live video download service -- currently the largest provider of on-demand video content -- to Europe and Canada in the coming year.

Communications: Bach said Microsoft aims to grow Windows Mobile's lead over Research In Motion during the 2008 fiscal year. He said the company expects more than 20 million Windows Mobile phones to be sold this year. Noting the high turnover in mobile phones, Bach said Microsoft wants to make more end-users aware that they are using a phone running Windows Mobile.

"We want them to go in and ask for another Windows Mobile phone," he said.

Microsoft lowers price on Xbox 360 ... DVD player

Posted by Benjamin J. Romano at 8:17 AM

Speculation about when or if Microsoft would drop prices on its Xbox 360 game console was rampant earlier this month, after Sony lowered its prices on the competing PlayStation 3.

Starting Aug. 1, Microsoft will drop the price of an Xbox 360 accessory: The HD DVD player will now cost $179, down $20, and come packaged with five free HD DVD movies during the month of August.

The announcement was made at the Comic-Con International convention in San Diego.

I'm in Redmond for Microsoft's Financial Analyst Meeting, which will feature presentations from Chairman Bill Gates, CEO Steve Ballmer, CFO Chris Liddell, COO Kevin Turner, division presidents Jeff Raikes, Robbie Bach and Kevin Johnson and other top executives.

Check back here throughout the day for updates from the event.

July 25, 2007

EA Sports, Microsoft make in-game advertising deal

Posted by Benjamin J. Romano at 9:46 AM

Microsoft and EA Sports announced today that five of the video-game publisher's biggest titles will be incorporated into the Microsoft's in-game advertising network.

The titles are: "Madden NFL 08," "NASCAR 08," "NHL 08," "Tiger Woods PGA Tour 08," and "Skate."

Advertisements will be placed in the games via the Massive Network, which Microsoft acquired last year.

It's doubtful that Peter Moore, the Microsoft video games executive who is leaving to head EA Sports, had much to do with negotiating the deal, terms of which were kept private. I'm asking about that and will post a response here.

(Because in-game advertising is handled by Massive, which sits within Microsoft's Online Services Division, Moore, who is part of the Entertainment and Devices Division, had nothing to do with the deal, according to an e-mailed statement from a Microsoft PR firm.)

During the E3 Media and Business Summit earlier this month in Santa Monica, I had a chance to talk about in-game advertising with Jeff Bell, corporative vice president of global marketing in Microsoft's video games business.

Bell brings an interesting perspective to the discussion because before coming to Microsoft, he was with DaimlerChrysler, where he worked on the Jeep brand. He tried several game-related advertising strategies including in-game ads (his team helped get Jeep as the vehicle featured in Microsoft's "Zoo Tycoon" game) and adver-gaming. He was also named Interactive Marketer of the Year by Advertising Age in 2005.

From our conversation, this EA deal sounds like just what Microsoft is looking for.

I asked him what role the company sees for in-game ads, and how much advertising is appropriate.

Bell: "I think there we do know and the data is overwhelming, that if you're in a reality based game, people don't want to see Acme. They don't want to see Blogo Shoes. They want to see 7-Eleven and they want to see Adidas. And so, from that standpoint, both from a product realism, as well as an advertising realism, they would like to have the real thing.

"I think where you cross over is you're not going to be seeing Massive or advertisements in 'Mass Effect.' So science fiction doesn't make as much sense.

"For us, I think we tend to focus more on the sports franchises, the reality based driving franchises, Tony Hawk, obviously has been a pioneer in that particular realm of being able to present things in the real world, real advertisements that can attract that audience."

He said EA is leading the way with advertising in sports games, but because of the slow and complex process of negotiating advertising agreements with sports leagues, franchises and stadiums, the area is just now building momentum.

I also asked Bell if he thinks game buyers should get a price break on games that carry a lot of advertising, the reason being that now publishers have a new revenue stream to tap.

Bell: "It's an interesting question, but it's so theoretical at this point, meaning that the business is still driven by the revenue from the sales of the games themselves that, there, I think we're all interested in the growth of the advertising model, but it is at present only a very small part of our overall revenue."

July 24, 2007

Wii sales in June continue to lead the pack

Posted by Benjamin J. Romano at 10:34 AM

NPD has released its June U.S. video game sales report and the Nintendo Wii continues to outpace Microsoft's Xbox 360 and Sony's PlayStation 3 in U.S. unit sales:

Wii: 381,800 units
Xbox 360: 198,400 units
PS3: 98,500 units

Sony's PR firm sent out a note last night citing preliminary data that shows the impact of its recent console price cut:

"PS3 sales have increased by more than 135 percent at the company's top five retailers since the new $499 price was announced two weeks ago on July 9. During this same two-week period, total PlayStation hardware sales have increased by 161 percent, software by 15 percent and peripherals by 60 percent."

In addition to strong console sales, games for Nintendo's systems are topping the chart. The company had six of the 10 best-selling software SKUs in June (four for the Wii and two for the hand-held Nintendo DS). Microsoft had three titles in the top 10 and Sony had one, but it was a title for the PlayStation 2.

July 17, 2007

Xbox boss reschedules career

Posted by Benjamin J. Romano at 1:19 PM

Microsoft confirmed this afternoon that Peter Moore, the head of the company's video games business, is resigning for personal reasons. Those reasons? He and his family want to get back to the San Francisco area and he got a job as president of EA Sports, the sports label of leading game publisher, Electronic Arts.

Replacing Moore is Don Mattrick, a game industry veteran who spent 23 years with EA.

People attending the Casual Connect gaming conference in Seattle this morning might have caught a scent of this news coming. In opening remarks at the show, Mark Cottam, CEO of MumboJumbo, noted that Marc Whitten, general manager of casual games at Microsoft, would be subbing for Moore, who was billed as a keynote speaker.

"Unfortunately, Peter Moore had a last-minute scheduling change," Cottam said.

July 12, 2007

E3: Games gain cinematic qualities

Posted by Benjamin J. Romano at 5:37 PM

SANTA MONICA, Calif. -- For years now, developers have been trying to incorporate more cinematic elements into their video games. Some of the games on display this week at the E3 Media & Business Summit are starting to reach the goal of looking and acting like immersive movies.

Today I talked with a couple of developers to find out how and why they're doing it.

I should note up front that the guys I talked to are squarely within the Sony fold and they spent a lot of time explaining how none of what they are doing would be possible without the expanded storage capacity of the PlayStation 3's high-definition Blu-ray discs and the processing power of its Cell Broadband Engine.

Tam Antoniades, co-founder of studio Ninja Theory, drew the most direct parallels between film production and the forthcoming "Heavenly Sword," an action-adventure game that was hands-down the best looking title at E3, to my eyes anyway. It's exclusive to the PlayStation 3 and one of the titles Sony hopes will attract hard-core gamers to the platform.

"'Heavenly Sword' was shot over six weeks and it was shot just like a movie," Antoniades said, noting that the budget was comparable to that of a mid-sized motion picture: somewhere in the neighborhood of $20 million.


Sony

Performances by actors, including one playing Bohan, were recorded through digital motion-capture technology to give the game "Heavenly Sword" a cinematic feel.

As many as five professional actors were on the set, each covered with hundreds of diodes that allow the digital capture of their movements and facial expressions. In addition to facial expressions, the actors voices and full-body movements were captured as well. While games such as "Tiger Woods Golf" have captured facial expressions using this technique, "Heavenly Sword" marks the first time that actors' facial expressions, movements and voices have been captured simultaneously for a video game, Antoniades said.

The actors rehearsed their parts and "actually played the entire game as a [theatrical] play," before filming began, Antoniades said. The scenes were shot with multiple actors on stage together, allowing them to "play off each other as they would in a movie or a play," Antoniades said, adding that this too was a first for the industry.

The performances are then rendered for the cinematic sequences that carry along the game's story -- evil army invades, red-head heroine gets magical sword, starts kicking butt -- in between fight scenes that are animated in a more typical way, but still look awesome. The appearance is not photo-real, but that's by design. "We did go for a stylized look," Antoniades said. The skin tones, textures and details of the characters were impressive.


Sony

Another richly rendered character in "Heavenly Sword" is Nariko.

The cumulative effect of all this detail and content is to provoke empathy for the characters in the game, creating a more immersive experience. "Just like when you watch a big movie, you feel for the characters," Antoniades said. "... I think that from this point on, a lot of games are going to have to go down this route if they want to have great stories."

It's still not quite on par with the special effects we see in movies -- think Gollum in "The Lord of the Rings" trilogy. Antoniades said the movie industry uses equipment costing millions of dollars to create a frame of action with a computer-generated character in it. (Gollum, not coincidentally, was played by Andy Serkis, who has a starring role in "Heavenly Sword" as the invading King Bohan.) Video games, on the other hand, have to generate their images with technology that costs far less.

"The fact that you can approach almost cinema-level [quality] on a home console is amazing even to us," Antoniades said.

The technology inside the PlayStation 3 is by far the most powerful of the current generation of game consoles -- and also the most expensive. But it's the high-capacity Blu-ray, along with the powerful processor cores, that allow developers like Antoniades to cram in the rich detail that makes their games so beautiful and realistic. "Heavenly Sword" is a 29 gigabyte game. A typical DVD can hold about 9 gigabytes.

PopCap gets Retro

Posted by Kristi Heim at 10:05 AM

PopCap Games has acquired Chicago-based game developer Retro64 for an undisclosed sum, the Seattle casual game maker said this morning. The deal will allow PopCap to bring new action and puzzle games into its library of computer game titles. In addition, Retro64's Chicago office has become a PopCap development studio, managed by chief producer Mike Boeh, who was director of technology for Rollingstone.com before founding Retro64. Retro64's arcade style games include Venice, Water Bugs and Platypus.The company takes its name after the Commodore 64 computer, popular in the 1980s, and the fast, simple games created to play on it.

July 11, 2007

E3: New, slimmer, lighter PSP

Posted by Benjamin J. Romano at 11:54 AM

CULVER CITY, Calif. -- Sony Computer Entertainment made some additional hardware announcements here. This one is focused on the company's PlayStation Portable, or PSP.

An enhanced PSP will be 33 percent lighter, 19 percent slimmer and with a longer battery life, among other new features. It can also be hooked up to a television to display PSP content on a larger screen.

In September, the enhanced model will be available in black, silver and a "Star Wars" design. Each one is packaged with additional content such as games and videos and will sell for $200.

E3: Sony shipping 10 million PS2s this year

Posted by Benjamin J. Romano at 11:39 AM

CULVER CITY, Calif. -- Jack Tretton, Sony Computer Entertainment's president and CEO, started his presentation as a digital avatar inside the PlayStation Home environment. The 3-D customizable online space, similar to Second Life, is a big push for Sony and Tretton said it has been greatly improved since it was announced in March.

"Everyone here is extremely proud of PlayStation Home," he said. "This is the kind of innovation that Sony is known for."

He said the presentation will feature "games, games and more games" -- 50 games across the company's major platforms: PlayStation 3, PlayStation 2, the portable PSP and the PlayStation Network. That's in stark contrast to Nintendo's event earlier this morning, which focused on new controllers and expanding the video-gaming audience (see posts below).

Tretton reviewed the company's recent PlayStation 3 price cut. He then moved on to the platform that made Sony the undisputed leader in the last generation of video game consoles: PS2. It has an 118 million-unit install base, seven years into its life cycle, and Sony plans to ship 10 million units this year.

E3: On the set with Sony

Posted by Benjamin J. Romano at 11:28 AM

CULVER CITY, Calif. -- The traveling media circus of E3 made its way a few miles inland from Santa Monica for the Sony press conference, starting presently.

The event is in a giant sound stage -- Stage 16, to be precise -- at the company's movie studios here. Despite the size of the space, I'm cramped in the back.

Outside, Sony was serving Bloody Marys. Let's see what they're serving for the PlayStation 3.

E3: 'Wii Fit' turns game machine into personal trainer

Posted by Benjamin J. Romano at 9:58 AM

SANTA MONICA, Calif. -- Reggie Fils-Aime described how Nintendo is aiming to improve mental health with a range of puzzle games and educational software for the Nintendo DS handheld device.

The "Brain Age" franchise has already sold 15 million titles and new titles from Ubisoft promise to help improve spelling and even be a virtual "life coach."

But the big news, saved for the end of the press conference is "Wii Fit." Fils-Aime said this "effectively takes our big lead in audience expansion and laps it."

Three fitness trainers are on stage now, each standing on a weight-sensing pad. The game depicts a movement, such as a one-legged stretch. The player, or exerciser, follows along and the pad gives you feedback on how you're doing.

A video about the game depicted yoga, push-ups, step aerobics and other exercise movements and balance movements. There are more than 40 activities in the game. The game prompts you with tips.


Nintendo

The Wii Fit -- a new controller from Nintendo -- allows players to perform different exercises or actions.


Shigeru Miyamoto, senior managing director, general manager, of Nintendo's Entertainment Analysis and Development Division -- a rock star in the company -- took the stage to introduce this game. He said through an interpreter that he's more excited about this than some of the higher-profile games announced today.

Miyamoto said the device that they were using is the Wii Balance Board. It's very thin. It can measure your weight and balance shifts while standing on the board. It can be used as a new interface for games that allows you to use your full-body movement for input. It's wireless and can be used anywhere in the room.

Another feature measures your body mass and graph changes in your Body Mass Index over time

E3: Wireless Wii Wheel for Mariokart

Posted by Benjamin J. Romano at 9:41 AM

SANTA MONICA, Calif. -- Reggie Fils-Aime just announced the Wii Wheel, a wireless steering wheel for use with "Mariokart Wii," a forthcoming release of the classic Nintendo franchise for the company's current-generation console.

"Like the Wii Zapper, this custom steering wheel has the potential to level the track for beginners while offering a new feel, even if you first started racing with Mariokart 15 years ago," Fils-Aime said. (Was it really that long? Yikes!)

"Mariokart Wii" will be available during the first quarter of 2008 and will feature real-time online multiplayer races and battle mode. Fils-Aime suggested that the number of players who can participate at once might be higher than in past versions.

E3: Nintendo ups the controller ante with Zapper

Posted by Benjamin J. Romano at 9:19 AM

SANTA MONICA, Calif. -- Reggie Fils-Aime just announced "the first offspring of the Wii Remote and Nunchuck."

He showed pictures of a plastic housing that holds both pieces of the motion-sensing control of the Wii in a gun shape.

"The Wii Zapper: On one hand it's a new housing for both the Wii Remote and the Nunchuk, but the real news is what it represents for game play," he said. The Zapper will "change the dynamics of the first-person shooter" category of video games.


Nintendo

The Wii Zapper houses the Wii Remote and Nunchuk.

Capcom is developing a special "Resident Evil, The Umbrella Chronicles," that uses the Zapper. Other third-party developers are working on games for it, too.

It will go on sale for $19.99, and be packaged with Nintendo software as well.

E3: Reggie is happy 'because everyone's a gamer'

Posted by Benjamin J. Romano at 9:05 AM

SANTA MONICA, Calif. -- Nintendo opened with a montage of news clips and advertisements for the Wii and Nintendo DS. Then Reggie Fils-Aime, president and chief operating officer of Nintendo of America, took the stage.

"My name is Reggie and I am ... happy," he said, riffing on the introduction he gave at this show in 2004. "To us, today is more than a press conference or a business meeting, we see today as a celebration."

He said the celebration extends beyond Nintendo.

"We think this E3 marks a conclusive turning point for the video game market, welcoming more players and more opportunity to our form of entertainment," Fils-Aime said.

Here's a number: 69 percent of all game industry growth comes directly from the sales of Nintendo products, he said.

Another one: A third of Nintendo DS players are women. In households with a Wii, the regular players include: 95 percent of males under 25; two-thirds of men 25 to 49; one-third of women in that age group. in the over-50 age group, 1 in 8 men are playing regularly, along with 1 in 10 women.

E3: Reggie is happy 'because everyone's a gamer'

Posted by Benjamin J. Romano at 9:05 AM

SANTA MONICA, Calif. -- Nintendo opened with a montage of news clips and advertisements for the Wii and Nintendo DS. Then Reggie Fils-Aime, president and chief operating officer of Nintendo of America, took the stage.

"My name is Reggie and I am ... happy," he said, riffing on the introduction he gave at this show in 2004. "To us, today is more than a press conference or a business meeting, we see today as a celebration."

He said the celebration extends beyond Nintendo.

"We think this E3 marks a conclusive turning point for the video game market, welcoming more players and more opportunity to our form of entertainment," Fils-Aime said.

Here's a number: 69 percent of all game industry growth comes directly from the sales of Nintendo products, he said.

Another one: A third of Nintendo DS players are women. In households with a Wii, the regular players include: 95 percent of males under 25; two-thirds of men 25 to 49; one-third of women in that age group. in the over-50 age group, 1 in 8 men are playing regularly, along with 1 in 10 women.

E3: Nintendo is tee'd up

Posted by Benjamin J. Romano at 8:49 AM

SANTA MONICA, Calif. -- We're waiting on Nintendo's press conference, due to start in about 10 minutes. The setting is a bit less dramatic than Microsoft's was last night. It's a pretty standard set up inside the Santa Monica Civic Center.

The decorations Nintendo chose speak to its strategy: About a dozen pictures of people of all ages playing with a Wii remote or quizzing themselves on a Nintendo DS. There's plenty of gray hair on the models in the photos and a fair number of people with perplexed but pleased looks on their faces, as if to suggest this is the first time they've played a video game, but they actually like it.

Check back for updates as the conference gets going.

E3: Nintendo is tee'd up

Posted by Benjamin J. Romano at 8:49 AM

SANTA MONICA, Calif. -- We're waiting on Nintendo's press conference, due to start in about 10 minutes. The setting is a bit less dramatic than Microsoft's was last night. It's a pretty standard set up inside the Santa Monica Civic Center.

The decorations Nintendo chose speak to its strategy: About a dozen pictures of people of all ages playing with a Wii remote or quizzing themselves on a Nintendo DS. There's plenty of gray hair on the models in the photos and a fair number of people with perplexed but pleased looks on their faces, as if to suggest this is the first time they've played a video game, but they actually like it.

Check back for updates as the conference gets going.

July 10, 2007

E3: Only at a video game conference

Posted by Benjamin J. Romano at 9:40 PM

SANTA MONICA, Calif. -- A fairly surreal moment here just now. Microsoft showed a full-length cinematic preview of the forthcoming "Call of Duty 4," an intense first-person combat game. It was loud, scary and very realistic.

Then two of the game's developers came on stage to play through a level, in which a pair of snipers infiltrate an enemy base. The audience of more than 1,000 people watched, rapt and silent, as a guy played a video game on the big screen of an outdoor high school amphitheater.

OK, I know, it's a video game conference. But still.

E3: Microsoft pairs with Disney on video rentals

Posted by Benjamin J. Romano at 9:34 PM

SANTA MONICA, Calif. -- Another significant piece of news out of the press conference: Microsoft has struck a deal to distribute movies for rent from Walt Disney Studios over the Xbox Live network in the U.S. The deal would further burnish the Xbox 360's credentials as a platform for video content.

E3: Reggie Bush scores a touchdown

Posted by Benjamin J. Romano at 9:08 PM

SANTA MONICA, Calif. -- Microsoft exec Jeff Bell noted that the Electronics Arts lineup of sports games this year will run twice as fast on Xbox 360. Reggie Bush, the USC Heisman Trophy winning running back and current New Orleans Saints star, came on stage to talk speed. As the two squared off for a few plays on "Madden NFL," Bush said, "I know how you Microsoft guys try to cheat." Bush, er, the on-screen depiction of himself, then broke free for a touchdown. Bell's team? The Seahawks.

E3: Microsoft introduces big red button

Posted by Benjamin J. Romano at 8:58 PM

SANTA MONICA, Calif. -- In a bid to expand the appeal of the Xbox 360, Jeff Bell, Microsoft corporate vice president, announced a new controller for the console. It's designed to be easy to use and features fewer buttons than the standard Xbox 360 controller, including a big red one.

Four of these wireless controllers will come packaged with "Scene It?" a movie trivia game based on the DVD board game from Seattle's Screenlife, which we profiled in 2002. The bundled game and controllers will sell for the same price as a regular Xbox 360 game.

This was the biggest news I've detected out of Microsoft's E3 press conference so far. Peter Moore spent a lot of time recounting statistics about the Xbox 360. One number he didn't share is the failure rate of the console, which was described last week as "unacceptable" in announcing an extended warranty program and non-specific engineering fixes that should eliminate the "general hardware failure"/ "red ring of death" that has upset a substantial number of customers.

So is the Big Button a direct rival to the Wii Remote from Nintendo? Not exactly. The "Big Button" pad isn't motion sensitive. But Microsoft is clearly experimenting with a controller designed to be less off-putting to non-gamers. It's a strategy that Nintendo has shown to be very successful, as the scarcity of Wii consoles on store shelves illustrates.

E3: 'Halo' fans rock the press conference

Posted by Benjamin J. Romano at 8:43 PM

SANTA MONICA, Calif. -- Microsoft opened with "five Halo fans from Libertyville, Illinois." These apparently amateur musicians heard the music of the game "and heard rock," according to Peter Moore, Xbox boss.

The band took its instruments as the movie screen lit up with a star scape. The amphitheater was lit in blue and the band began to play. A lead violinist with '80s hair started rocking out. The screen shows dozens of shots from "Halo 3," due out in September. The crowd cheered.

Moore says they're about to unveil "the biggest lineup in video game history."

E3: Microsoft invades Santa Monica High

Posted by Benjamin J. Romano at 8:05 PM

SANTA MONICA, Calif. -- You walk in between the high school cafeteria and administration building. The music is thumping louder than it was at prom. A security detail that looks like it should be protecting a head of state watches from the edges. Everything is bathed in the signature green of the Xbox.

Hundreds of mostly white and Asian men are sitting in the concrete amphitheater. Many have their laptops open. Others are brandishing cameras, camera phones. A section in the middle is given over to video cameras.

A stage is set in green, black. There's a pool next to a walkway and a few dozen large chrome balls scattered on black carpet. A drum set, keyboard, guitars and a gong stand at the ready.

On a movie-theater sized screen in the middle, thousands of names -- Gamer Tags -- are displayed, presumably as they exist in the Xbox Live network: They are attached in a giant expanding tree to other names. "tude," "Cindi," "CyberCooper," "lakergrul024."

Microsoft's E3 press conference begins in half an hour. If you want to watch it live at home, you can. Details will be posted here at 10 p.m., when the news embargo lifts. We'll try to get the details posted sooner.

E3: Thoughts on a competitive game console race

Posted by Benjamin J. Romano at 2:23 PM

SANTA MONICA, Calif. -- The 9 a.m. Alaska departure from Seattle to LAX, a flight packed with people from Microsoft and other companies bound for the E3 Media & Business Summit, finally made it here about a half hour ago. Don't ask us about the emergency landing back at SeaTac.

It's cloudy and a comfortable 70 degrees here. Perfect weather to stay indoors and play/talk about video games for three days (OK, not really), which is what the 3,000 or so people arriving here from around the world intend to do.

More signs are pointing to a very competitive, and interesting, cycle for video game consoles. I've seen a lot of recent analysis of the video game industry that suggests unlike the last hardware cycle, no one console will dominate this time around.

While the Nintendo Wii is sprinting through its first full-year on the market, Microsoft's Xbox 360 has a solid lead in total installed base as a result of its early launch in 2005 (this despite the hardware problems plaguing the console). Sony's PlayStation 3 is off to a rough and costly start, but it's hard to write off a company with Sony's depth of experience in the industry. The company is already cutting prices to get back in the game.

On Monday, JupiterResearch released a new report backing the view that the current cycle will be much closer than the last one, which Sony's PlayStation 2 dominated. The report also estimates the size of the purse these competitors -- gathered here for three days to make their moves for the coming holiday season -- are playing for: potential cummulative U.S. sales of $66 billion through 2012.

A press release describing the Jupiter report stated it this way: "Competition for console households over the next five years will be fiercer than ever and will result in a close sharing of the installed base of systems among platform suppliers."

"Each platform supplier brings a special set of strengths to the market and to competition in current generation of systems," Jupiter vice president and research director Michael Gartenberg said in the press release. "On top of that we have seen a dramatic rise in the proportion multiplatform releases from independent publishers over previous generations. This is no longer the winner-takes-all market of the past."

2007 will be the high-water mark in terms of console revenue, the report concludes, with potential sales of $12.8 billion. Next year, Jupiter predicts, more than half of all U.S. households will have a video game console.

July 9, 2007

Suit says Xbox 360s scratch game disks

Posted by Benjamin J. Romano at 4:38 PM

Microsoft says it has not "received any widespread reports of Xbox 360s scratching discs." That's the line from company spokesman Jack Evans, who was responding to a class action lawsuit filed in Florida.

As reported in the South Florida Business Journal:

The suit, which seeks class action status, was filed on behalf of Jorge Brouwer, a Broward County resident who bought an Xbox 360 late last year. It says that damages exceed $5 million and Microsoft has sold 11.6 million units since it was launched in November 2006.

Evans said late this afternoon that Microsoft had "only just learned of this lawsuit so we haven't had time to evaluate it."

The suit was filed by Hodkin Kopelowitz Ostrow, a Fort Lauderdale law firm. Its offices were closed when I called just now for comment.

Microsoft has a program for replacing scratched disks, but it only applies to titles the company publishes itself. Only 10 titles are currently covered by the program and Microsoft charges $20 per disc.

The suit comes days after Microsoft acknowledged an "unacceptable rate" of "general hardware failures" with the Xbox 360. Microsoft executives declined to identify the exact nature of the failures, but reports suggested the video game consoles were overheating.

Sony cuts PS3, as predicted. Who's next?

Posted by Benjamin J. Romano at 8:49 AM

Video game industry analysts I spoke with last week for today's story previewing the Electronic Entertainment Expo (E3) were fairly certain we would see a price cut from either Sony or Microsoft sometime before the holiday season.

"These guys have got to do something, or Nintendo is going to run away with this business," said Mike Goodman, director of digital entertainment with Yankee Group Consumer Research.

Last night, Sony confirmed those predictions, lopping $100 off the price of the PlayStation 3. It now retails for $499, still the most expensive of the current generation video game consoles.

Sony also rolled out an 80 gigabyte hard-drive version of the PS3. According to this Associated Press report, the higher-capacity model will be packaged with racing game "MotorStorm" and sell for $599. This model won't hit North American markets until August.

From The AP:

[The higher-capacity PS3] plays into the company's upcoming strategy of eventually offering downloaded high-definition movies, video games, movie trailers and demos, Sony spokesman David Karraker said.

Karraker said further details on high-def movies for download would be released at a later date.

Could that later date be, say, Wednesday morning at 11:30 a.m., when Sony holds its E3 press conference? And what might this mean for Microsoft's Xbox 360?

The company isn't tipping its hand just yet. The president of Microsoft's Japan unit, Darren Huston, is quoted in this Wall Street Journal roundup as saying the Xbox 360 has "very competitive pricing" right now. He added that Microsoft would continue to "assess market dynamics." Not clear if his comments apply just to the Japanese market or to the Xbox 360 business globally.

Microsoft in March announced a $480 high-end version of the console, with 120 gigabytes of storage that appeared to be aimed squarely at the PS3's target audience.

I'll be keeping track of the major announcements from Santa Monica this week as E3 begins Tuesday. Check back here for updates following Microsoft's press conference Tuesday night at 8:30 p.m. Nintendo goes before the cameras Wednesday morning at 9, followed by Sony.

In other news going in to E3, Sony issued an apology for a shoot-out scene that takes place in an Anglican cathedral in "Resistance: Fall of Man." According to this AP report, the game depicts a "gun battle between an American soldier and aliens inside a building that resembles Manchester Cathedral in northwest England."

Here's another story updating Nintendo's efforts to make the DS Lite an integral part of baseball through a pilot project with the Mariners at Safeco Field.

July 2, 2007

Wii continues on a roll before E3

Posted by Benjamin J. Romano at 8:00 AM

The Nintendo Wii is still flying off of shelves -- even in the middle of summer -- a development that has to have the folks at the company's U.S. headquarters in Redmond feeling pretty good going in to next week's E3 conference.

With all three next-generation consoles launched, the toned-down video game confab in Santa Monica, Calif., will likely focus on upcoming games for the holiday season. But you can bet that Nintendo, Microsoft and Sony will be touting their console sales numbers -- or spinning them -- and Nintendo has plenty to crow about.

An AP story out of Japan this morning reports that the Wii outsold Sony's PlayStation 3 at a rate of six to one in June. The Wii also outsold Microsoft's Xbox 360, according to the statistics from Enterbrain, a publisher. Nintendo seems to be succeeding in its strategy of selling the console to a broader demographic.

From the story: "The Nintendo's game console is catching on not only among children but also adults and singles," said Enterbrain spokeswoman Yuko Magaribuchi.

Sales in the U.S. are going gangbusters, too. While Friday's iPhone lines got most of the attention, people are still queuing for fresh shipments of the Wii, more than seven months after it launched. See this AP story for details, including this one: Inside a Brooklyn Toys "R" Us store, "the systems didn't even make it to the shelves before they sold out."

June 8, 2007

Analyst expects Xbox 360 price cut

Posted by Benjamin J. Romano at 9:17 AM

Bloomberg reported this morning that one of the top financial analysts covering Microsoft, Heather Bellini at UBS, expects the company to lower prices on its Xbox 360 game console heading into the holiday shopping season.

Here are the goods from Bloomberg:

"If they really are going to have a good Christmas games lineup, then they just have to have the largest number of boxes out there so that they sell the largest number of games," said Bellini, Institutional Investor's top-ranked software analyst. She expects a price cut as early as September.

Nintendo's Wii, which was the subject of yet another success story in the New York Times today, is pulling ahead in this round of console wars with a mass appeal and a $250 price point that's $50 less than the cheapest Xbox 360, and half as much as the cheapest Sony Play Station 3.

(In another sign of Sony's console business struggles, the company announced job cuts in its U.S. video game unit, following layoffs in Europe in April. See coverage by The Associated Press.)

The Bloomberg story has the usual "no comment" on price cut timing from Microsoft. It does quote an Xbox product manager saying that the company is "well aware that the sweet spot of the market is really 199 bucks." Xbox boss Peter Moore also chimes in, acknowledging that Microsoft needs to pursue a broader market -- much the way Nintendo has by making its console appealing to audiences beyond the hard-core gamers.

June 5, 2007

Xbox Live debuts new Pac-Man from game's creator

Posted by Benjamin J. Romano at 2:22 PM

How many quarters dropped into the slot is Toru Iwatani responsible for? He created Pac-Man, the wildly popular arcade game, in 1981 for Namco. Today, Microsoft said, Iwatani, a Tokyo Polytechnic University professor, has again put his mark on the Pac-Man franchise.

Namco Bandai is releasing "Pac-Man Championship Edition" for download on Xbox Live Arcade starting tomorrow. It will have the first new mazes in 26 years, along with several other new bells and whistles, according to a Microsoft news release.

Microsoft held the Xbox 360 Pac-Man World Championships in New York City today. The finalists competed on the new game and winner Carlos Daniel Borrego, 27, of Pachuca, Mexico, was crowned by Iwatani himself.

Iwatani says this marks the end of his corporate career. See coverage from Reuters.

May 25, 2007

"Partial nudity" in "Halo 2" Vista version

Posted by Kim Peterson at 10:02 AM

The Windows Vista version of "Halo 2" has been delayed because Microsoft said it discovered "partial nudity" in the game, according to GamesIndustry.biz. Microsoft is blaming an "unfortunate, obscure content error."

And it sounds like Microsoft is going to still allow that version of the game on store shelves. The company said it will place a label on the game's box alerting buyers to the content. All future runs of the game will have the nudity removed, so expect these first editions to soon appear on eBay for hundreds of dollars. Users will be able to download an online update to remove the nudity themselves.

"Halo 2" for Vista is scheduled to come out May 31 in the U.S., about three weeks later than initially planned.

I can't find any details on what the offensive images exactly are, however.

May 24, 2007

Who will win: "Halo 3" or "GTA4"?

Posted by Kim Peterson at 4:04 PM

Which game will sell better this year: "Halo 3" or "Grand Theft Auto 4"? That's what I've been wondering after reading a Goldman Sachs report out today that says Microsoft was making a strategic play when it chose Sept. 25 as the official release date for "Halo 3." That's nearly a month before the Oct. 16 release of "Grand Theft Auto 4" for the Xbox 360 and the PlayStation 3.

The audience for the two games is similar, the analysts say, and so a person buying "Halo 3" will probably buy "GTA4" for the Xbox 360. Microsoft is trying to increase sales of the Xbox 360 and cut into PS3 sales, according to the report.

Microsoft also needed to launch "Halo 3" about a month ahead of "GTA4" in order to mitigate competition between the two titles and allow time later in the fall for other titles to launch, a more partner friendly strategy.

Microsoft executives say they expect the launch of "Halo 3" to be as big an entertainment event as the release of the last "Harry Potter" book and the opening of "Pirates of the Caribbean 3." But how does the "Halo 3" launch stack up next to "GTA4"?

I put my money on "GTA4" because it will be out on two consoles. But an informal poll of my friends gives the advantage to "Halo 3." What do you think?

May 21, 2007

Valve: No acquisition in our future

Posted by Kim Peterson at 9:55 AM

Bellevue-based Valve Software is going to remain independent, according to founder Gabe Newell. In an interview with GamesIndustry.biz, Newell says independence is what makes his studio great:

I think something that contributes to our ability to be successful is that we don't have external financing on our projects...There's no venture capitalists breathing down our neck, and I think that helps us make decisions that are more focused on what customers will like than what a third party has an opinion about.

Valve is best known for the "Half-Life" and "Counter-Strike" series of games.

May 17, 2007

"Halo 3" beta working, getting (mostly) good reviews

Posted by Kim Peterson at 1:59 PM

I played the "Halo 3" beta last night. You know, the one that gamers waited all day for?

First impressions: The graphics are beautiful. The game play is completely fun. But I was often confused, particularly when it came to reloading guns or trying to pick up weapons on the ground.

Here's what others have to say:

Kotaku: The first thing that strikes you is the quality of the graphics compared with "Halo 2." A lot of the same elements are there -- weapons, vehicles -- but all a whole lot shinier, more finely detailed, and, well, sexier. Everything flowed beautifully.

Geek.com:
The grass looks as good as any game I've ever seen -- on par with "Call of Duty 3's" grass that blows in the wind. The water, ohmygosh, the water. It's almost worth getting killed in the water just to get the water kill camera.

UGO: ... there's still this nagging feeling that we're playing the same game we've been playing since "Halo 2," which in itself wasn't a particularly marked change from the first entry in the series.

A "big project" underway at Zipper

Posted by Kim Peterson at 1:37 PM

I previously profiled Zipper Interactive, a super-hot video game studio in Redmond that develops the "Socom" military-themed game series.

Zipper has been making "Socom" games exclusively for Sony since 1999, doing so well that last year Sony decided to buy the studio.

This week, Sony announced a new game in the series, the online-only "Socom Confrontation," but the developer wasn't Zipper. Instead, the Vancouver, B.C.-based Slant Six Games is making it.

I asked Sony what was going on. Spokeswoman Jennifer Clark said that Zipper has been pulled off to work on "a big project" so the Socom work went to Slant Six. All of this was likely in the works when Sony acquired Zipper. Sony is promising me a sneak peek at Zipper's project down the road, so stay tuned.

Update:
1Up.com says it confirmed that Zipper is working on a separate Socom game. Is that all the developer has up its sleeve?

May 16, 2007

"Halo 3" beta delayed, everyone freaks out

Posted by Kim Peterson at 1:42 PM

Some gamers are none too happy with Microsoft today after the "Halo 3" beta video game was not available to play as promised.

The company had said it would allow gamers today to play some of the multiplayer elements of the game, which is expected to go on sale Sept. 25. People who own the Xbox 360 game "Crackdown" were invited to participate in the beta trial version of "Halo 3." But those players found today they couldn't access the game.

Gaming site Gamespot says "pandemonium" has ensued following the delay.

"Halo" developer Bungie has a short note online addressing the problem:

Folks are reporting problems downloading the "Halo 3" beta via "Crackdown" this morning. We have alerted the appropriate Live authorities and they are taking care of the problem as we speak. More news as it comes in.

Microsoft gaming guru Major Nelson's Web page was so overloaded that it now has a brief message about the situation. "Bungie Studios is working with the Xbox Live team to resolve this as quickly as possible -- stay tuned," Nelson writes.

May 15, 2007

Microsoft building Chinese Zune factory

Posted by Kim Peterson at 2:23 PM

Microsoft is building a factory in China to make the next version of its Zune player, according to this Marketwatch article.

Toshiba provided the parts and framework for the original Zune, which came out last November. According to the article, Microsoft wants to take a more direct role in the manufacturing for the second version.

The article seems to imply that Microsoft has dumped Toshiba. Microsoft isn't naming its new manufacturing partner but said the new factory will be in Doumen, China. That's the same city where the Xbox 360 video-game console is made by Flextronics International, according to Marketwatch.

Nintendo Europe seeking new ad agency

Posted by Kim Peterson at 10:30 AM

News broke last week that Nintendo was moving its marketing and advertising people out of Redmond, possibly to New York or San Francisco.

Now, word is out that the company's U.K. advertising agency, Leo Burnett, has resigned. Leo Burnett handled advertising for the launch of the Wii console last fall. In reporting the split, Brand Republic says Leo Burnett was unhappy with "the lack of creative authority" it had on Nintendo's account. Some of the ads it created for the Wii launch, for example, were reshot.

Separately, IGN brings up a rumor I had heard last week when reporting the Nintendo story: Nintendo's marketing magazine, Nintendo Power, may shut down. Employees are being told to look for new work by September, according to IGN.

May 14, 2007

Xbox Live: Hollywood's meeting ground?

Posted by Kim Peterson at 4:41 PM

Xbox Live is the new place to network for Hollywood types, according to this Variety article. Blowing someone's head off at night makes it easier to approach them the next day with pitches, the article says. One writer interviewed says that listening in to the profanity used in the game helps him keep up with the latest slang.

"Is it really socially acceptable to talk business at 2 a.m. on the phone? Of course not," observes Zach Shiff-Abrams, an exec at Michael De Luca Prods. "But it's completely acceptable on Xbox Live."

May 9, 2007

TV watching plummets; DVR miscount?

Posted by Kim Peterson at 1:39 PM

The number of television viewers is plummeting, the Associated Press reports. About 2.5 million fewer people have been watching the main networks compared with last year.

NBC set a record last month for its least-watched week during the past 20 years, and maybe ever -- then broke it a week later. This is the least popular season ever for CBS' "Survivor." ABC's "Lost" has lost nearly half its live audience -- more than 10 million people -- from the days it was a sensation. "The Sopranos" (a show that has earned broadcast-network-like ratings in the past) is ending on HBO, and the response is a collective yawn.

The shift may cause traditional television advertisers to rethink their spending.

There could be many reasons for the drop in viewership, the article says. An earlier daylight savings time is partly responsible.

But the article highlighted some measurement problems. Nielsen doesn't count people who download a show on Apple's iTunes or stream it from a network's Web site.

And Nielsen is trying to include the estimated 17 percent of homes that have digital video recorders, but it only counts a show if the viewer watches it within 24 hours from when it aired. That's screwing up the numbers for heavily recorded shows like "The Office."

May 8, 2007

J Allard in dreadlocks: not a pretty sight

Posted by Kim Peterson at 10:24 AM


Microsoft

Microsoft's J Allard, on the losing end of a bet.

A new look for Microsoft's J Allard? For a while, at least.

Allard's dreds are the result of a bet he made with Newsweek reporter N'Gai Croal over Sony's handheld PSP game player. In 2005, Croal said that the PSP would sell faster than the PlayStation 2 console. Allard bet that it wouldn't.

If Croal lost, Allard was to shave off Croal's dreadlocks onstage at Microsoft's E3 press conference. If Allard lost, he would wear a dreadlock wig for the month of May 2006, including the week of E3.

Allard was wrong, but by last year's E3 he had shifted his focus to Zune and didn't go onstage at Microsoft's event. So he's making good on the bet now with an updated bio page on Microsoft's site.

The picture shows Allard holding a PSP with the words "N'Gai had it right." Here's how Croal describes the bet.

April 27, 2007

Xbox 360 Elite on sale Sunday

Posted by Kim Peterson at 10:08 AM


Microsoft

The Xbox 360 Elite: more of the same?

The Xbox 360 Elite console goes on sale Sunday. It has a 120 gigabyte hard drive (six times that of the original Xbox 360), an HDMI port and cables and costs $480. And it's in matte black with a metallic sheen. Existing Xbox 360 owners who just want to buy the super-sized hard drive can do so for $180.

Engadget tested the Elite against the regular Xbox 360, which came out in November 2005, and found that there really isn't much difference between the two.

Do yourself a favor, just buy that 120GB drive if you need the space, the HDMI really just doesn't justify replacing your whole console for a new $480 unit.

CNET's Crave blog says the Elite is actually disappointing when compared with Sony's PlayStation 3. It doesn't have a next-generation disc player (there is an add-on HD-DVD player), a Wi-Fi adapter or a flash media reader, which come on every PS3.

The bottom line is that the Xbox 360 Elite isn't a must-have upgrade for existing 360 owners, and it doesn't bring the 360 feature set in line with that of the PlayStation 3.

April 26, 2007

Monolith artist in Portfolio's Job of the Week

Posted by Kim Peterson at 11:25 AM

In its "Job of the Week" section, Conde Nast's new Portfolio magazine features Chris Alderson, a 24-year-old video game character artist at Kirkland-based Monolith Productions.

Recently, Alderson has been working on a metal-plated villain for a new project. To design this "giant robotic samurai," he trolled Google and Flickr for a day, searching for junkyard images of car parts, metal plates, and walls.

Father of the PlayStation to step down

Posted by Kim Peterson at 10:20 AM

Ken Kutaragi, often called the "father of the PlayStation," said he will step down as chief executive of Sony's game division on June 19. He will become honorary chairman of Sony Computer Entertainment.

He will be replaced in the CEO spot by Kazuo Hirai, a longtime Sony games exec who is currently the division's president and chief operating officer.

Kutaragi is a gaming industry legend for his work on the PlayStation. His resignation comes after a very tough couple of years for Sony's games group. The company delayed the release of the PlayStation 3 by months and cut production shipment goals in half. Only about half a million PS3s have been sold in the U.S. this year, according to data by The NPD Group, compared with 1 million Nintendo Wiis and 721,000 Xbox 360 systems.

Father of the PlayStation to step down

Posted by Kim Peterson at 10:20 AM

Ken Kutaragi, often called the "father of the PlayStation," said he will step down as chief executive of Sony's game division on June 19. He will become honorary chairman of Sony Computer Entertainment.

He will be replaced in the CEO spot by Kazuo Hirai, a longtime Sony games exec who is currently the division's president and chief operating officer.

Kutaragi is a gaming industry legend for his work on the PlayStation. His resignation comes after a very tough couple of years for Sony's games group. The company delayed the release of the PlayStation 3 by months and cut production shipment goals in half. Only about half a million PS3s have been sold in the U.S. this year, according to data by The NPD Group, compared with 1 million Nintendo Wiis and 721,000 Xbox 360 systems.

Nintendo just misses Wii sales goal

Posted by Kim Peterson at 9:56 AM

It's hard to find a Wii video game console anywhere. In fact, some analysts say that supplies of the console won't meet demand until 2009. So when Nintendo said today that it missed its sales goal for the Wii, all signs point to a problem on the production side.

The company, whose North American headquarters are in Redmond, sold 5.84 million Wii systems in its fiscal year ending March 31. It had planned to sell 6 million -- a milestone that was reportedly hit in April. For the next fiscal year, Nintendo said it expects to sell 14 million Wiis.

The real bright spot for the company is still the handheld DS player. Sales of 23 million DS players was a major factor in Nintendo reporting record sales and profits today for the year. And Nintendo doesn't expect DS sales to slow much, forecasting 22 million in unit sales for the next year.

Nintendo today reported sales of about $8.1 billion for the year and operating profits of $1.9 billion. That's an increase of 90 percent and 150 percent over the previous year.

Nintendo just misses Wii sales goal

Posted by Kim Peterson at 9:56 AM

It's hard to find a Wii video game console anywhere. In fact, some analysts say that supplies of the console won't meet demand until 2009. So when Nintendo said today that it missed its sales goal for the Wii, all signs point to a problem on the production side.

The company, whose North American headquarters are in Redmond, sold 5.84 million Wii systems in its fiscal year ending March 31. It had planned to sell 6 million -- a milestone that was reportedly hit in April. For the next fiscal year, Nintendo said it expects to sell 14 million Wiis.

The real bright spot for the company is still the handheld DS player. Sales of 23 million DS players was a major factor in Nintendo reporting record sales and profits today for the year. And Nintendo doesn't expect DS sales to slow much, forecasting 22 million in unit sales for the next year.

Nintendo today reported sales of about $8.1 billion for the year and operating profits of $1.9 billion. That's an increase of 90 percent and 150 percent over the previous year.

April 19, 2007

Top 10 video games for March

Posted by Kim Peterson at 5:11 PM

For all the gushing over Nintendo's Wii console, only one Wii game cracked the top 10 list of bestselling games in the U.S. in March, according to data out today by research firm The NPD Group.

The "Wii Play" game ranked fourth, with 273,000 units sold that month. Two titles for Nintendo's DS handheld player came in at No. 6 and No. 7.

The list had four games for the Xbox 360, including the expensive "Guitar Hero 2" in the No. 3 spot with 291,000 units sold. For a game that costs $90, that's pretty impressive.

Sony had three games on the list and only one, "Motorstorm," was a PlayStation 3 title. But Sony can claim the top-selling game, as "God of War 2" for the PlayStation 2 led the list with 833,000 units sold.

April 18, 2007

Sony cutting gaming jobs

Posted by Kim Peterson at 3:42 PM

Sony said it may cut as many as 160 video-gaming jobs in Europe, according to Reuters. The company is also reportedly looking at streamlining its business in the U.S., but hasn't announced any cuts here.

Sony acquired the Redmond-based Zipper Interactive last year. At the time, Zipper had 130 employees and was looking to hire more.

April 17, 2007

Hobbits in Bellevue Square

Posted by Kim Peterson at 2:41 PM

The company behind the upcoming "Lord of the Rings Online" -- a new massively multiplayer game -- is staging launch events in Bellevue and four other cities on April 23 at 11 p.m.

Don't be alarmed if you see a Frodo lookalike shuffling through Bellevue Square. Prizes will be given for best costume.

April 10, 2007

Is the Xbox "Doom"-ed?

Posted by Kim Peterson at 10:48 AM

Video gaming veteran John Romero, who designed "Doom" and other landmark games, thinks the video game console is history. In an interview with gaming site Adrenaline Vault, Romero says the future lies with new personal computers that are cheap but are sophisticated enough to handle the big games. But Nintendo's Wii console has found its niche, he says.

Next-gen console is big but its future isn't too bright with the emergence of cheap PC multi-core processors and the big change the PC industry will go through during the next 5 years to accommodate the new multi-core-centric hardware designs. My prediction is that the game console in the vein of the PS3 and Xbox 360 is going to either undergo a massive rethink or go away altogether. The Wii has the perfect design for a console that doesn't pretend to be a PC and is geared more toward casual gamers than hardcore gamers.

April 9, 2007

Rushing to keep pace with the Wii

Posted by Kim Peterson at 10:53 AM

Electronic Arts and other video game publishers were sure that Sony's PlayStation 3 would be the hot console right about now. They generally underestimated the success of Nintendo's Wii, which has become the top-selling game system this year.

According to Bloomberg, Electronic Arts experienced a 25 percent drop in sales in February from a year earlier because it didn't have enough Wii games. Now, the company is rushing to get out Wii games as fast as it can.

Research firm IDC is estimating that Nintendo will ship 16.1 million Wiis this year, according to the article, compared with 9.9 million Xbox 360s and 9.1 million PlayStation 3 systems.

IM on the Xbox 360

Posted by Kim Peterson at 10:24 AM

Microsoft is making its instant messaging program available for the Xbox 360 next month. That means gamers can send messages from the video game console directly to people using Windows computers and cellphones.

But the company isn't coming out with a custom keyboard for the Xbox 360 until this summer. So unless you have a USB keyboard that works with the machine, sending instant messages on the Xbox 360 will not be so instant -- probably similar to what it would be like to send an IM from your cellphone.

April 5, 2007

Nintendo ups forecast....again

Posted by Kim Peterson at 9:59 AM

Nintendo is on a tear. Just three months ago it raised its yearly sales predictions from $6.4 billion to $7.6 billion. Today, it's doing so again. Yearly sales are now forecast at $8.1 billion. Profit is also up for the year, but Nintendo didn't give specifics.

The jump isn't because of that new Wii console that's getting all the attention. The company said it's seeing "robust trends" in sales of its handheld player, the DS.

Nintendo's fiscal year ended March 31, but it's announcing the financial results on April 26.

April 4, 2007

Kickballers cast aspersions, call competition 'Microsoft'

Posted by Benjamin J. Romano at 12:56 PM

The Seattle Weekly has a story on the behemoth of adult kickball leagues entering the Seattle market this season. It includes two references to ballers from rival leagues equating the World Adult Kickball Association (WAKA) to Microsoft. Even the story's headline proclaims: "'The Microsoft of Kickball' Has Arrived."

So are these comments meant to malign WAKA or compliment its success? (As the Weekly reports, 32,000 players in 21 states participated in WAKA kickball last year.)

WAKA clearly feels maligned. The kickball league sued another D.C.-based league, DC Kickball, for infringing on WAKA's copyrighted rules and accused a DC Kickball founder of defamation "for calling it 'the Microsoft of kickball' in a 2005 Washington City Paper story," the Weekly reports. "WAKA is seeking $356,000 in compensatory and punitive damages."

Later in the story, the kickball coordinator for local adult league Underdog Sports makes the Microsoft comparison again.

Lawrence Martin tells the Weekly he thought WAKA was awesome when he was in college, when "they were sort of independent. ... They sound like a Microsoft now. I think they've lost their way."

(Full disclosure: At least one member of the Tech Tracks staff played in an Underdog kickball and/or bowling league within the last 12 months.)

So what do you think when you hear a group described as "the Microsoft of (blank)"? Is this a compliment? An insult? Did it change somewhere along the way?

March 30, 2007

New cruise amenity: Wii video games

Posted by Benjamin J. Romano at 11:16 AM

Norwiegan Cruise Lines announced yesterday that it will be outfitting all of its ships with Nintendo Wii video game consoles. The move speaks to the multi-generational appeal of the next-generation console, which uses a motion sensitive controller that people newer to video games find easier to handle.

"With its active, engaging and inviting game experiences appealing to every age from kids to parents to grandparents, the Wii from Nintendo is a natural fit for Freestyle Cruising," Colin Veitch, the cruise line's president and CEO, said in a press release. "With the addition of Wii to our on-board activities, we can now offer bowling, boxing, golf, tennis and baseball across the entire fleet. Cheering, yelling and high-fives will be highly encouraged."

The consoles will be in public places equipped with large projection screens. The ships will hold tournaments and other events around the Wii, the cruise line said.

This New York Times story talks about the different ways seniors are getting into video games, including a retirement home where nuns play Bejeweled. A spokesperson for Seattle's PopCap Games, which makes Bejeweled and others, conveyed these statistics: "71 percent of its players were older than 40, 47 percent were older than 50, and 76 percent of PopCap players were women."

Our own Kim Peterson wrote about the trend of baby boomers playing casual games a few years ago.

March 28, 2007

Redefining first-person shooter

Posted by Benjamin J. Romano at 4:50 PM

Here's ammunition for any sarcastic contrarians arguing that video games reduce violence in the real world: In Mexico City, Reuters reports, the new mayor is trading Xbox video game consoles for guns as part of a broader crime-fighting effort.

Details from the Reuters story:

Launching the program Tuesday in the notorious inner-city barrio of Tepito, which police stormed last month, city police chief Joel Ortega said anyone who turns in a high-caliber weapon like a machine gun will get a computer.

Owners can swap smaller guns for cash or Microsoft Corp.'s Xbox video-game consoles under the plan. ...

Organizers say they have 100 computers ready for the first wave of the program, each worth 8,500 pesos ($769) and equipped with software donated by Microsoft. On the first day, Olayo said the city received 17 guns, including 12 from Tepito.

The police action there of late sounds like the stuff of a first-person shooter: "Last month police stormed Tepito, a warren of scruffy homes and market stalls a few blocks north of the capital's main square, seizing a tenement complex known as 'The Fortress' -- reputedly a major cocaine and marijuana distribution center."

March 16, 2007

'Halo 3' to come in three flavors

Posted by Benjamin J. Romano at 9:27 AM

The third installment in Microsoft's best-selling video game series, "Halo," will come in a high-end collector's edition priced at $130.

"Halo 3," the concluding chapter of the alien-fighting trilogy based on the Marvel graphic novels, is set to be released later this year. No specific date was given by Microsoft today, but the company did detail three editions it will sell.

Standard Edition, which is just the game, will cost $60.

Limited Edition, $70, will include a bonus disk with a documentary on the making of the game. It will also have what Microsoft is calling "an audio-visual calibration tool ... to make the most of fans' high-definition home theaters".

The $130 Legendary Edition, which will come in limited quantities, comes in a Spartan helmet and includes a second bonus disk with more documentary materials. As an added treat, this edition will come with original "Halo 3" storyboard art.

March 1, 2007

Big Fish eBay update

Posted by Tricia Duryee at 3:13 PM

Earlier this week, we said Big Fish Games was auctioning off a chance for someone's photo to appear in its next Mystery Case Files game.

The auction is occuring on eBay.

Here's the update: Two days since it launched, the auction has attracted more than 8,540 visitors with 27 bids, reaching $540 at last check.

The auction will close March 8 at 3 p.m. The proceeds go to charity.

February 27, 2007

Big Fish drops eBay line

Posted by Tricia Duryee at 2:07 PM

Seattle-based Big Fish Games, a developer of casual games, said today that it is auctioning on eBay a chance to have your picture (and three friends' photos) used in the next episode of its "Mystery Case Files" series.

Gamers playing the sequel will try to find "hidden" characters in the game. Those characters will be the photos provided by the eBay winners.

The auction started this morning here and will close at 3 p.m. March 8. All of the proceeds will go Child's Play, a game industry charity that aids terminally ill children.

This afternoon, the highest bid was at $115.50.

According to Big Fish Games' Web site, the company has a history of charitable giving. It donates 5 percent of all profits to causes that help those in need throughout the world.

February 22, 2007

EA vet to advise Microsoft entertainment unit

Posted by Benjamin J. Romano at 12:25 PM

Video-game industry veteran Don Mattrick will advise Microsoft's Entertainment and Devices Division, The Wall Street Journal reported today.

Microsoft confirmed that Mattrick, who left leading game studio Electronic Arts in September 2005 after 23 years with the company, will serve as an external adviser to the Entertainment and Devices Division.

"Don will be working directly with [Division President] Robbie Bach and his E&D senior leadership team to further cultivate the broadest and best experiences across Microsoft gaming and entertainment platforms," according to a company statement.

February 6, 2007

A day for casual games

Posted by Tricia Duryee at 12:16 PM

Following news that RealNetworks purchased a Brazilian casual games company today, Microsoft released a survey today regarding its own casual games site -- MSN Games.

The survey, which Microsoft commissioned, found that Americans are feeling more stressed out and starved for time than ever, with 56 percent of men 18 to 34 and 71 percent of women 18 to 34 spending less than an hour on themselves a day engaged in activities that provide downtime or alone time.

Playing casual games, such as arcade, puzzle, word and trivia games, and card and board games, is one of the activities men and women said they like to engage in when they have just 20 minutes to "recharge" during the day.

Each month, Microsoft said more than 13 million people play games on MSN Games, such as Sudoku, Fish Tycoon, Bejeweled 2 and Uno.

RealNetworks goes to Brazil

Posted by Tricia Duryee at 10:26 AM

RealNetworks said today that it acquired Sao Paulo, Brazil-based Atrativa, a casual games Web site, to strengthen its already strong international game portfolio.

The acquisition allows Real to move into South America. Previously, it had a casual games footprint in Europe, China, Latin America and the U.S. Today, Real said it offers games to consumers through RealArcade, GameHouse.com, Zylom.com and Atrativa.com.br, accounting for more than 750,000 game downloads on a typical day.

The Seattle company said it purchased Atrativa for an undisclosed price at the end of 2006.

December 19, 2006

Opera browser available on Wii on Dec. 22

Posted by Benjamin J. Romano at 10:04 AM

Nintendo said in September that the Wii game console -- this holiday season's hot item -- would include a trial version of the Opera Web browser. Today, Nintendo and Opera announced that the browser will be available for free download beginning Friday. The announcement came from Nintendo in Europe, but it looks like Wii owners everywhere can download the browser.

Here's the news from Opera in comic form, a nice twist on the traditional press release.

From Nintendo's press release: "The final version of the Opera browser will be available at the end of March 2007, and will be free for all Wii owners to download through the end of June. After June 2007, the browser will be available for download in the Wii Shop Channel for 500 Wii Points."

Adding a browser to the Wii strengthens Nintendo's position in the living room. Opera, meanwhile, is pursuing a strategy to optimize its browser, which trails offerings from Microsoft and Mozilla, for use on set-top boxes, mobile and other devices.

December 7, 2006

Nintendo seeking Wii antidote

Posted by Kim Peterson at 12:57 PM

Nintendo is now trying to get everyone to calm down and stop abusing furniture, window panes, other players and houseplants with its new Wii controller. Some Web sites are showing evidence of the damage that can happen when the controller flies out of a player's hands and hits nearby objects.

Just how excited could someone get? Here's a good example.

"Some people are getting a lot more excited than we'd expected," Nintendo President Satoru Iwata said, according to the Associated Press. "We need to better communicate to people how to deal with Wii as a new form of entertainment."

Well known Nintendo developer Shigeru Miyamoto reportedly said the company is looking for additional methods to get people to chill out.

"We are encouraging people to understand that you really don't have to be so excited," he said. Look for a lineup of Wii relaxation products at game stores in the future.

November 30, 2006

Shakeup at Sony: PS3 to blame?

Posted by Kim Peterson at 11:23 AM

Sony shuffles its top dogs in its Sony Computer Entertainment (SCE) gaming group in a chain of "promotions." What does it all mean? First, the facts:

Ken Kutaragi has been moved from president to chairman, and retains his Group CEO title. Kaz Hirai, who previously headed up Sony's PlayStation team in America, moves into Kutaragi's old position as president of all of SCE. That could mean a move to Japan for Hirai.

It sounds like Kutaragi will still oversee Sony's games business but might have less responsibility over day-to-day operations.

As far as the American team goes, Sony has moved Jack Tretton into Hirai's old position heading up SCE America. Tretton was previously an executive vice president for that team.

Numerous observers have interpreted this as a demotion for Kutaragi after a fairly disastrous PlayStation 3 launch. Today brings word of yet another disappointment: the chief of Electronics Arts said Sony was only able to get 200,000 PS3s to the U.S. for launch, about half of what the company had promised.

And people are still talking about a Newsweek report that said Sony lost out on exclusive access to two smokin' hot properties - "Grand Theft Auto IV" and "Assassin's Creed" - because Kutaragi dragged his feet on cementing deals with the games' publishers. Meanwhile, Microsoft was calling them every day. The end result is that those two games will debut on the Xbox 360 as well as the PS3.

November 27, 2006

Nintendo sells 600,000 Wiis

Posted by Kim Peterson at 3:42 PM

Nintendo reported today that it has sold 600,000 Wii consoles in the Americas since the Nov. 19 launch. If you include games and accessory purchases, that totals about $190 million in sales, the company said.

Looks like the best-selling launch game was "The Legend of Zelda: Twilight Princess," which sold about 454,000 units.

Sony said it would have 400,000 PlayStation 3 consoles in North America for its Nov. 17 launch. No word on whether the company was able to meet that goal.

Nintendo is planning to sell 4 million Wii consoles through the holidays. By comparison, Microsoft sold 5 million Xbox 360 consoles from its launch on Nov. 22, 2005 through the end of June 2006.

November 22, 2006

How did the game consoles do last weekend?

Posted by Kim Peterson at 11:44 AM

Two video game industry analysts offered takes today on how the launch weekend went for Sony and Nintendo.

P.J. McNealy with American Technology Research said Sony had only about 125,000 to 175,000 PlayStation 3 units to sell last weekend -- well below McNealy's previous guess of 250,000 to 300,000. Sony had said it would get 2 million PS3s to stores worldwide by the end of the year, but now that number is looking questionable, McNealy said.

Nintendo was more successful getting on store shelves, with about 425,000 to 475,000 Wii consoles sold at its launch, McNealy said. That company will likely send at least 1.5 million to 2 million units to North American stores this year.

Colin Sebastian with Lazard Capital said the Xbox 360 is benefiting from the PS3 and Wii shortages at stores and the momentum around its hot holiday game "Gears of War." Sebastian estimated that Sony will sell only about 750,000 PS3s by the end of the year in the U.S.

He also said that about 20,000 PS3s have sold on eBay since pre-orders began last month. That's nearly 15 percent of the units sold in stores. The average auction price was $1,500.

Nintendo wrote in to tell us that it will have an interactive Wii kiosk set up for two months in 25 malls around the U.S., including Southcenter in this area. Company representatives will be there to show people how to play games on the Wii. It's a good strategy for a console with such novel features.

November 21, 2006

WildTangent snaps up a Microsoftie

Posted by Kim Peterson at 11:09 AM

Redmond-based WildTangent said today it has hired A.J. Redmer away from Microsoft Game Studios. Redmer, who was most recently the general manager of MGS Asia, will become the executive vice president of WildTangent Studios. WildTangent develops and publishes online games, mostly ones that fall into the casual game category.

Redmer oversaw the development of Microsoft-branded gaming products, and before that he worked at Nintendo and Lucasfilm Games.

November 20, 2006

Dust settles from wild gaming weekend

Posted by Kim Peterson at 2:09 PM

Looks like things are finally starting to calm down after a crazy weekend of PlayStation 3 and Wii snatching. Some people had lined up all night last week in hopes of reselling their PlayStation 3 for thousands of dollars, but a check on eBay today shows the console isn't quite breaking the $1,000 mark in most cases.

Sony surely must have been disappointed in the New York Times' harsh review of the PS3 out today. The reviewer has plenty of praise for Microsoft, however.

And so it is a bit of a shock to realize that on the video game front Microsoft and Sony are moving in exactly the opposite directions one might expect given their roots. Microsoft, the prototypical PC company, has made the Xbox 360 into a powerful but intuitive, welcoming, people-friendly system. Sony's PlayStation 3, on the other hand, often feels like a brawny but somewhat recalcitrant specialized computer.

At least PC Magazine likes it, giving the system 4.5 out of 5 stars. Meanwhile, Bloomberg is quoting analysts who think that Sony missed its goal of having 400,000 PS3 units out the door by the time the console debuted Friday.

The launch of Nintendo's Wii seemed to go more smoothly, and the reviews range from the all-out positive to the who is this made for, anyway?

Thousands gathered at the Times Square Toys R Us and chanted "Reggie! Reggie!" at the sight of Nintendo president Reggie Fils-Aime. (Don't understand why? Read this profile from last week). The first person in line was someone who was such a gaming fan that he had his name legally changed to his gamer name, "Triforce."

November 16, 2006

PS3: Lines long, patience short

Posted by Kim Peterson at 3:14 PM

I've seen the angry video gamer in action at several E3 video game conventions, particularly when the food runs out, when the shuttle buses are full, or when models are told to cover up their bikinis.

All those years of killing zombies, jacking cars and vaporizing aliens have got to leave some inner rage issues for some. So when you put hundreds of people in line in cities around the country waiting to buy what may only be a handful of Sony PlayStation 3s per store, it's entirely possible that some angry gamer channeling might take place. The PS3's go on sale on Friday, in many places at 12:01 a.m. And the reports are coming in:

West Bend, Wis.: Wal-Mart sure handled this one well. A crowd of 50 lined up early this morning only to learn that 10 consoles were available. A store manager placed 10 chairs by the store, pushed the crowd back and told them to run for the chairs to see who would get one. A 19-year-old fan ran into a pole instead and had to be hospitalized. Link (scroll down on page).

Palmdale, Calif: Another winner for Wal-Mart. The store actually had to shut down and called in Los Angeles County sheriff's deputies after a crowd became too rowdy. This newscast on Yahoo Video has the details.
"It was just pure chaos," said one participant. "Little kids got knocked over," said another. Some people were given a $400 ticket for setting up tents.

New York City: Unhappy people at the SonyStyle store and Circuit City. "People are just jumping the line, there were even fights last night," said one observer. "It's totally messed up."

Lexington, Ky.: A drive-by BB gun shooting hits four people waiting in line at Best Buy. It's enough to send two people home, but one stays, saying, "I'd do it again, even if I get shot again."

Want more video? YouTube, predictably, has it.

Manhattan: People cutting in line and selling their spots in line. Link.

Burbank, Calif.: People lined up since Nov. 6. Link. One guy quit his job to line up.
"It wasn't a good job," he said. Another guy said the PS3 is keeping him from buying his girlfriend an engagement ring.

There are lines in the Seattle area, too, but no reports of violence yet.

Update: From a reader who was out at a Fred Meyer:
"The first in line equals first to buy" policy of some stores seems to cause the most problems. I went to a local Fred Meyer with friends, and it was relatively peaceful despite 300+ people competing for only 4 systems. The Fred Meyer had ample security / large, muscled employees as they ran a simple lottery system - everyone was issued a numbered ticket and then a drawing was held in public, with only the 4 winners allowed into the store with a security escort.
My friend happened to have the good luck to be fourth number called and got to buy the 20gig system.

A strange Scrabble game in Seattle tomorrow

Posted by Kim Peterson at 9:54 AM

RealNetworks is holding a "man vs. machine" Scrabble game tomorrow at 11:30 a.m. at Seattle's Westlake Plaza. National Scrabble champ Jim Kramer will play against the Scrabble video game that Real has on its RealArcade gaming service.

He'll be in an isolation booth and will play three games, vying for a $10,000 prize. For some reason, a police officer will be handcuffed to a clear briefcase containing the money. (Why is the "Mission Impossible" theme suddenly playing in my head?) The game will be projected onto a giant video screen for those of us whose Scrabble games consist mostly of words like "tot" and "see."

A couple hours before that match, RealNetworks CEO Rob Glaser will be playing against the president of the National Scrabble Association at an internal company event.

November 15, 2006

Kirkland game developer sold

Posted by Kim Peterson at 11:10 AM

Kirkland video game developer Amaze Entertainment has been sold to Foundation 9 Entertainment of Newport Beach, Calif.

Foundation 9 says it's now the largest independent game developer in the world, with 725 employees in 11 studios across the country. There will be no layoffs in Kirkland, in fact Amaze's CEO says the company will probably be hiring.

The acquisition price wasn't announced. Amaze has three studios in Kirkland, and has mainly been working on games for handheld players like Nintendo's DS and Sony's PSP.

More details in our story today.

November 3, 2006

"Halo" is the biggest industry franchise?

Posted by Kim Peterson at 2:24 PM

Microsoft's Shane Kim says the company's "Halo" series is "arguably the biggest franchise in our industry today."

Say what?

I'd like to see the numbers backing that up. I'd argue the title would more likely go to Nintendo's Mario (which has appeared in some 77 games) franchise, Nintendo's Zelda franchise or even perhaps the top-selling "Grand Theft Auto" series.

"Halo" is huge, no doubt about it. Not huge enough to get a movie through production, apparently, but a formidable rock of the industry. Perhaps "Halo 3," when it comes out in 2007, could cement the franchise in the top spot, but until then I need more evidence to believe Kim's remarks.

October 31, 2006

Billionaire's son pleads guilty, but story isn't over

Posted by Kim Peterson at 10:46 AM

Michael Pickens, the son of legendary billionaire Boone Pickens, pleaded guilty to securities fraud on Monday and agreed to a sentence that could be four years and nine months at a minimum or a maximum of five years and 11 months.

Pickens sent hundreds of thousands of phony faxes across the country, each looking like a handwritten note with a hot stock tip on it. The idea was to convince people receiving the faxes that they were privy to a secret way to get rich quick, and apparently the scheme did work to some extent.

One of the companies Pickens promoted was Seattle-based Infinium Labs, a video game company that has since changed its name to Phantom Entertainment. The SEC has charged Infinium's chairman, Timothy Roberts, for authorizing the fraud and for making a $422,500 profit by selling his shares as the stock price increased.

The SEC estimated that Roberts paid Pickens $200,000 in cash and gave him 4 million shares of his own stock. That case is still ongoing in Florida, where Roberts lives.

October 26, 2006

Gaming companies report earnings

Posted by Kim Peterson at 4:48 PM

This is an apples to oranges to, uh, grapes picture, but the financial reports out today from the three biggest gaming companies are worth looking at together.

First up, Nintendo. The company's profit was up 48 percent in the first half of its fiscal year because the handheld DS player is still flying off the shelves. Nintendo sold 10 million DS units in the first half of the year, up from 3.6 million during the same period last year. It plans to sell 20 million during its full fiscal year -- a shocking number if you think about it.

Nintendo's Wii debuts Nov. 19 in the U.S. for $250. It's pretty much a given that it will sell all of the 4 million it has allocated for the holidays.

Poor Sony. I know, it's weird to feel sorry for a multi-billion-dollar entertainment conglomerate, but the bad news just doesn't stop. The company's quarterly profit plummeted 94 percent for the third quarter, falling to $14 million. Sony was hit hard by the recall of some 9.6 million computer batteries that it made for some of the biggest PC makers out there. On top of that, the company is gearing up for a big price war on flat-screen TVs this holiday.

All of that has precious little to do with the PlayStation 3 system, which goes on sale Nov. 17 in the U.S. for $500 and $600. But Sony has a lot riding on the PS3 -- not just on sales, but on the hope that the console will lead to more money from sales of televisions, accessories and online content. The PS3 could be a bright spot for Sony over the next year, made brighter by the fact that so much else in the Sony universe is dark.

Microsoft announced solid quarterly numbers today, handily beating analysts' expectations with nearly $3.5 billion in profit on $10.8 billion in revenue.

The company said it has sold 6 million Xbox 360 units in the year that they've been on the market, and it's on track to sell 10 million by the end of December. By the end of March, the company is predicting it will have sold 13 million to 15 million.

Its Entertainment and devices Division, which makes the Xbox, is losing less money, with a loss of $96 million compared with $173 million a year ago. And the company reports that it is costing less to make the 360 these days, which is to be expected as component parts drop in price and manufacturing is streamlined.

October 20, 2006

"Halo" movie loses major backers, future uncertain

Posted by Kim Peterson at 10:47 AM

The movie based on Microsoft's "Halo" game hit a huge stumbling block this week when co-financiers Universal and Fox abruptly backed out of the project, Variety is reporting today.

Variety said there are rumors that the movie's price tag is inching to $200 million from the original $135 million. The two studios had tried to get Microsoft and the filmmakers to cut the profit they stood to make from the film, but that didn't happen, according to the report.

Ken Kamins, who represents executive producers Peter Jackson and Fran Walsh, told Variety that Universal waited until the last minute before asking that the filmmakers and Microsoft "significantly reduce" their profit deals. Jackson and Walsh conferred with Microsoft and its Bungie Studios division and came back saying no to any changes.

I asked Microsoft about the news and received this statement from a spokeswoman:

We are disappointed that Universal wanted to significantly renegotiate the financial points of the deal. But the Halo franchise is hugely popular and our goal remains the same -- to find a partner that shares our passion and will creatively collaborate with us to best represent the story and spirit of the Halo franchise. Peter Jackson, Fran Walsh and the rest of the creative team are dedicated to ensuring the Halo movie becomes a reality. We are already in discussions with potential partners who recognize the value of the Halo brand and its appeal to consumers worldwide.

So don't write the movie off as dead yet.

October 19, 2006

Sony says profit will drop, blames batteries, PS3

Posted by Kim Peterson at 11:40 AM

Sony just can't catch a break in this crucial time before the launch of the PlayStation 3.

The company cut back its fiscal year profit forecasts today by almost 40 percent, blaming that massive laptop battery recall and the price cuts it had to make on the PS3 in Japan even before the system came out.

The company didn't change its sales outlook, however. But it listed several ways in which its profits will be hacked, including the 20 percent price cut on the PS3 in Japan and the delay of the PS3 launch in Europe to next March.


October 17, 2006

New Xbox already in development

Posted by Kim Peterson at 1:20 PM

Microsoft is already working on the successor to the Xbox 360 video game console, according to an interview with European boss Chris Lewis on the gaming site Kikizo.

"Of course we're thinking about that ... we're constantly thinking about the next thing, we have to. It's my point about complacency -- you can't sit back on your laurels in this business -- the consumer won't let you, the developers certainly won't let us. So that's happening right now."

It makes sense. Microsoft began thinking about the Xbox 360 almost immediately after the original Xbox launched. But how long will the 360's life cycle be? Lewis said he thinks the 360 will live longer than the original Xbox, which, although still around, pretty much lasted four years.

The 360 was built to last a long time, with the ability to upgrade the hard drive and add accessories as technology develops. And if the Microsoft-preferred HD-DVD format beats Blu-Ray technology for next-generation video, then even better. The 360 could become a standard HD-DVD player for households for years.

Let's say that the Xbox team is banking on at least a five or six-year window for the 360. That means that they're sitting down now to plan a console that comes out in 2011 or 2012. That's gotta be a tough job.

October 12, 2006

Missed out on PS3? Wii pre-orders tomorrow

Posted by Kim Peterson at 4:16 PM

Sony's PlayStation 3 sold out in a matter of minutes earlier this week when the retailer GameStop began taking pre-orders. Wonder if Nintendo's Wii gaming console wil get the same treatment Friday, when pre-orders go on sale. A $50 deposit is required.

Nintendo expects to get 4 million Wii consoles to stores by the end of the year, compared with 2 million PS3's. Still, you'll probably see some early-morning lines at the handful of GameStop and EB Games stores around town.

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