Week in Review, 2/22/2009

This week proved that no matter how big you get, you can have your ups and downs, and they don't come any bigger than Microsoft.

Chief executive Steve Balmer said that the company was going to take a hit from the bad economy, and to add insult to injury, they were slapped with a lawsuit by a user who said she was charged a downgrade fee to convert a laptop to XP. However, the company's future in the burgeoning field of cell phones definitely looks bright – Windows Mobile 6.5 will feature an app store, as well as a new interface, according to preliminary reports.

It was a rocky week elsewhere in technology land, too. Facebook found itself dealing with user fallout from its end user license agreement changes – a brouhaha that was even featured on major network newscasts.
Bankrupt game publisher Midway pulled out of the Entertainment Software Association, and news emerged that one of the company's investors could benefit unfairly from the bankruptcy.
Konomi found themselves facing a lawsuit from Viacom/Harmonix, claiming their game Rock Revolution was an infringement on the patent for Rock Band.

With all this going on, you might imagine that some companies would be breaking out the survival plans, and that's exactly what Sega has been doing. The former-hardware giant-turned-software-company has a strategy that includes emphasizing its Sonic brand and creating more Mature-rated titles for the Wii. This may seem a strange contradiction until you realize that Sonic is now known to two or three generations of gamers, and Sega recently scored a success with the violent House of the Dead: Overkill.

Electronic Arts, meanwhile, is taking a much more curious path – as in, going outside the game industry completely. The company announced a line of children's sports equipment – no, not wireless devices designed to interact with titles like Madden, the real deal. It definitely seems like an odd choice for the recently-troubled game manufacturer, and it remains to be seen if they can make an impact in a totally untested arena. (Taking the "sequels are a sure bet" route, they also announced a followup to the popular game American McGee's Alice.)

As for Nintento, they had mixed news from the Nielsen company: They're getting a broader audience and less play, meaning a lot of people consider them their secondary console, not their primary one.

On the media end of things, satellite radio company Sirius/XM got a reprieve from bankruptcy, while tech-oriented cable channel G4 said it would be laying off people and cutting back. The G4 news raises the question of whether super-specialized programming may someday leave television altogether and go online, becoming, in effect, video podcasts. Definitely something to think about – the rise of streaming video certainly seems to point in that direction.

So with all that "down" going on, what was "up?" Cell phones, once again. In addition to the Windows announcement, Android made appearances in the form of a price cap on Android apps and British manufacturer Vodaphone saying it would offer a Google phone. And it's been rumored that Dell is about to throw its hat in the smartphone arena. (We might add that phones aren't a guaranteed road to riches for everyone, though, as Sprint lost more than a million customers.)

Good news in gaming: Acclaim announced plans to expand, the Square Enix/Eidos deal seemed to be moving forward, and, in a sign that even a shutdown could lead to something good, Bonfire emerged from the wreckage of Ensemble Studios.

And one very big-money segment of the entertainment industry that quietly flexed its muscles was the tween audience – Wizard 101, a free-to-play MMORPG aimed at this audience, passed the one million user mark. In the rush to create the next blood-soaked Grand Theft Auto, many people forget that this demographic group can mean heavy brand loyalty and big success – just look at Disney's entire teenybopper empire. It most definitely doesn't hurt to play to the High School Musical crowd.

Links of the Day, 12/15/2008

Video Games

Time Warner has purchased 10 million more shares of Eidos and now owns about 20% of the company. This looks like a win-win on both sides. Tomb Raider company has been through some bumpy financial times as of late, and this new move should shore them up considerably. Meanwhile, Time Warner gets a big stake in the Lara Croft franchise, a proven cross-media success.

Is Electronic Arts headed in a more highbrow direction to help save itself? The company may have canceled its Need for Speed franchise, which focuses on auto racing, and has announced it is developing a game based on Dante's Inferno. The Dante project could be a game-changer for the company in either direction, and is worth keeping an eye on. 

Activision Blizzard has sold Chilean subsidiary Wanako Games to Montreal-based Artificial Mind and Movement. As Wanako's specialty is the up-and-coming field of downloadable games for consoles, this is definitely a forward-looking move on Artificial Mind's part. (Plus, it may mean more games jobs opening up in the Montreal area!)

Is the industry truly recession-proof? Bloomberg seems to think that Nintendo is, but the rest of the gaming business, not so much. The report especially cited the price of Sony's Playstation 3 as a factor in making the device undesirable in this economic climate. More bad news for Sony, which has fallen twice as far behind the Xbox as it was when the systems launch, according to an analysis by the Gamasutra blog. Furthermore, CNN says the PS3 is dying on the shelves. Sony's story is definitely a cautionary tale of corporate hubris – just because you had one massive success, that doesn't mean people will automatically buy your followup at any price.  

Sports games continue to be among the most popular on all consoles, and 505 games is throwing a new competitive arena in with all the football and baseball titles – swimming. The company is developing multiple titles in conjunction with Olympic swimmer Michael Phelps, for both console and handheld devices. And in a piece of good news for West Coast game industry types, the British company is opening a new studio in Los Angeles to work on the titles.

Apple is now touting the iPhone as a gaming console, saying it may even be a threat to the DS. This is to be taken with a major grain of salt – in fact, the entire shaker, given that the device has yet to really prove its mettle in the gaming arena (although it did score the latest release in thKatamari Damacy franchise)  - but at least it shows that the company will very much be open to game development for its handheld. 


Google just can't seem to stay out of the news. The company is taking heat from the Wall Street Journal , which is accusing it of abandoning its support of network neutrality by approaching major internet service providers "with a proposal to create a fast lane for its own content," making sites like YouTube run faster than their competition. Google is loudly denying this, but the inevitable further investigation of the claims should prove interesting, especially in light of how close they came to antitrust claims in the failed Yahoo ad deal. Meanwhile, it seems to consider its Chrome browser much more of a level playing field, allowing a company outsider to add code to the project.

Palm, which is still trying to stay alive in an iPhone world, is planning a massive product launch next month, featuring a new Linux-based OS called Nova. This is the latest appearance of the suddenly-hot Linux, which is rapidly looking like a must in the toolbox of software developers for all sorts of platforms.

Ways to Monetize Twitter: Industry experts offer suggestions on how the infuentual but unprofitable microblogging tool can be turned into a money-spinner, including merchandising, selling ads within tweets and offering a "Twitter Pro" version. Some of the suggestions are good advice for anyone planning to build a social networking system.

BitTorrent's initial $17 million funding round may have been reduced, which could be very bad news for the file-sharing service, which has had a bumpy ride of it lately. It's interesting that a lot of people perceive BitTorrent to be a massive success (especially considering the extent of its use in the anime community), but this proves a sobering reality – you can have a ton of users for your product, but you can't make a living of it without the funding. 


Investors may be too optimistic about consumer recovery: A caution that even if the holiday shopping season tuns out to be more successful than expected, that doesn't necessarily mean the economy is recovering. 

Week in Review, 11/16/08

The past week’s news,
unfortunately, brought more bad news for the publishing industry. The Kansas
City Star eliminated
about 50 jobsActive Interest Media, the South Bend Tribune and the Omaha World Herald 
also made staff cuts, and
the Raleigh News Observer even
eliminated delivery jobs.

What’s interesting is that the losses seem to be both among
major city papers and local ones, but local publications are being hit
especially hard. It's probably significant that the API finally, officially declared a crisis in newspapers.

Some media outlets,
however, are taking steps toward survival by branching out into other outlets.
purchased Ripple 6, a social media firm, and the Financial Times
revamped its Web site. . Look for more and more
publishing companies to be pushing people toward their online editions (even
the Old Gray Lady, the New York Times, is running “all the news that’s fit to
click” commercials for its Web site) and go multimedia. This is an industry
that’s getting hard-hit by a perfect storm of emerging technologies and a lousy
economy, but at the same time, it’s heartening to see that it refuses to
completely die.

The economy as a whole
continued to be a not-quite-cheery subject: we found out that unemployment
levels are
the same as after 9/11Foreclosures are up and the bailout isn't going as planned.

However, some industries
continued to boom, and they were all in the high-tech arena. Video-related news
was everywhere. Huge venture capital investments went to online video/video
publishing firms
Mobile Video  and Digitalsmithswhile the leader in online
video, YouTube, got an even bigger boost when it was announced that Obama’s
weekly “fireside chats,” traditionally offered via radio, would be
posted on
the site
. Google, meanwhile, announced it would enter the video chat arenaOld saw Blockbuster made a
move toward futuristic movie delivery with an announcement of a
set-top box for
movies on demand.

Cell phones/mobile devices
continue to expand like crazy, with Verizon Wireless getting ready to strike a
$500 million
deal with Microsoft for search services, Apple announcing better
gaming software
in the future of the iPhone, Electronic Arts
console and phone versions of Tiger Woods Golf and Opera launching a new mobile device browser.

Electronics retailers,
however, are going through a bumpy period, with Circuit City officially
for bankruptcy
  and Best Buy announcing a drop in salesTheir fortunes will
probably reverse themselves when the economy recovers – at least in the case of
Best Buy – but it’s still worth keeping an eye on.

Finally, the gaming industry was in the news as always. The
Blogging Stocks blog
pooh-poohed the idea of an EA/Disney merger, which was
championed by the Wall Street Journal. Sega's A&R content head
Darren Williams
slammed the Wii, comparing it to an expensive board game, strangely disrespectful considering the amount of Sega properties on Wii and DS – and a potential sign of a change of pace for Sega?

The bottom line this week:
Things are still bad, but there’s still pathways to fame and fortune,
especially if one embraces forward-thinking technology. Companies in danger of
becoming dinosaurs – traditional newspapers, Blockbuster – are learning this.
And the right piece of technology at the right time can even made you a
multimillionaire in this climate – just ask Rock Band creators Harmonix, who
will get a bonus of
more than $150 million each for developing their megahit

– Bonnie