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Spotify bets on debt to fund expansion
Spotify has raised $1 billion in a deal onlookers have called "strict" and "devilish." Rather than another equity-based funding round, the money was raised through convertible bonds (i.e. debt), with some restrictive terms mostly tied to Spotify going public with an IPO. Investors will be able to convert their bonds to shares at a 20-percent discount within the next year. After that, if the IPO still hasn't happened, that percentage will increase by 2.5 percent every six months. Additionally, as it's debt, there's interest to pay -- 5 percent yearly, which similarly will increase every six months after a year, this time by one percent.
Apple planning a $5 billion bond offering
Thanks to the fun and excitement of financial accounting, even companies with $178 billion in cash need to incur some debt every once in a while. That's exactly what Apple has in store for the near future, filing a bond sale prospectus with the Securities and Exchange Commission in the amount of $5 billion. That amount isn't actually listed in the prospectus; the Associated Press reported the amount earlier today. What will Apple do with that little pile of debt? Probably fund the capital reinvestment program that has been buying back shares of Apple stock and paying quarterly dividends to shareholders. Goldman, Sachs & Co. and Deutsche Bank Securities will handle the bond sale, which is coming at a time when the U.S. bond market is suffering and 30-year bonds are at a record low. Apple has issued other bond offerings in the past, including a $17 billion six-part offering in 2013. At the time, that offering was the largest ever for a US corporation. Another $12 billion bond sale was offered in 2014, and the company made a Euro bond offering late in 2014.
RuneFest tickets on sale this week
If you're a RuneScape fan and you'll be in London on October 11th, you might want to know that tickets for this year's edition of RuneFest are now on sale. Passes are £99 each, or you can get in for free (and even get a hotel room!) with RuneScape's in-game bonds. The event starts at 10:00 a.m. local time and runs through 7:00 p.m., with an afterparty and late-night gaming scheduled through 11:00 p.m.
New membership currency introduced to RuneScape to help fight gold farming
You don't need to pay money to enjoy RuneScape on a monthly basis, but you certainly get a bit more out of the game with a subscription. But would you prefer to use some of your vast in-game fortune to pay for that membership? You can do that now thanks to the introduction of Bonds, a new item that can be purchased for $5 a pop and then traded or sold in the game itself. When used, Bonds can be redeemed for 14 days of play time, eight Squeal of Fortune spins, or 160 RuneCoins. You can also redeem them for RuneFest tickets (although it takes more than one Bond for that). In a video from Jagex CEO Mark Gerhard, the genesis of Bonds is explained -- this is the latest step in the game's long-standing battle with gold farming accounts, offering players more control over membership costs while cutting out the need to pay money to third parties. So spend cash on improving your in-game fortune or spend your in-game fortune to save some cash, it's up to you. [Source: Jagex press release]
Jagex introduces RuneScape bonds, new business model
Jagex CEO Mark Gerhard has posted a new video to the RuneScape website detailing the fantasy MMO's new business model. The clip, which runs a bit over three minutes in length, focuses on Jagex's efforts to eradicate goldfarmers from the long-running browser-based title. Gerhard mentions that the firm has removed over 3,700,000,000,000 GP from goldfarmer accounts and banned more than 1.1 million bot accounts this year alone. Despite those "signifcant blows, gold farming continues to survive," Gerhard explains. He also says that 40 to 50 percent of the game's active playerbase buys gold "on any given month!" The solution to what is clearly a thorn in Jagex's side is something called RuneScape bonds. Bonds are a tradeable membership item that can freely gifted or traded for any other tradeable in-game item. As a result, players will be able to pay for their game memberships via in-game wealth and gold farmers will theoretically have no customers. The bonds update will also include a gold-sink designed to help the economy recover from extreme inflation. Full details are available via the video after the cut and the links below. [Thanks Caio!]
38 Studios loan under SEC investigation
It seems as though we can't go more than a few weeks without hearing about some new complication related to the collapse of 38 Studios and the financial catastrophe it left in its wake. This week's news comes in the form of an SEC probe into the $75 million in loan guarantees offered to the studio by the Rhode Island Economic Development Corporation. The RIEDC has secured the services of a law firm to help it handle the SEC's investigation. Further details are sparse, as the RIEDC has offered only that it "doesn't discuss ongoing matters related to 38 Studios and maintains a level of confidentiality as requested by the SEC." Strangely, the SEC investigation, which launched in early 2012, was not mentioned to investors when Rhode Island published financial documents related to a bond transaction in April of that year. According to the treasurer's spokesperson, the state's treasury was not aware of the probe at that time. The RIEDC is currently involved in a lawsuit against studio head Curt Schilling and former RIEDC members responsible for the 38 Studios deal.
Rhode Island set to pay 38 Studios bonds. Probably.
38 Studios collapsed upon itself in a heap of flaming disaster last year, and Rhode Island taxpayers ended up stuck with the bill. The state used a $75 million loan, acquired through the sale of taxable bonds, to convince 38 to operate within its borders, and RI is now on the hook for around $89 million after the studio declared bankruptcy. Some state lawmakers in Rhode Island flirted with the idea of "walking away" from the debt, which is apparently a privilege afforded to a government and not its citizens. However, the state's House Finance Committee has approved a budget that includes, at the very least, making an interest payment of $2.5 million on the debt in May 2014. If Rhode Island is running off the plan it talked about last month, this first payment will be followed by yearly payments of $12.5 million until the debt is repaid. The budget hasn't passed; it still needs to get through the state's House and Senate. Future interest payments will also have to be approved by the state legislature.
Daily Update for May 1, 2013
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen. Subscribe via RSS
Apple's $17 billion bond deal is the largest in history
The Wall Street Journal reports that Apple made the largest corporate-bond deal in history on Tuesday, when it raised US$17 billion in bonds -- the first time the company has offered bonds in 20 years. In response, The New York Times asks, why would cash-rich Apple do this in the first place? Analysts tell the NYT that the debt actually can boost returns to shareholders, something Apple has already taken steps to do when it announced its dividend and share-repurchase program last week and in March 2012. In the process, Apple was using historically low rates to its advantage. The company can step around the taxes it would need to pay by repatriating some of its overseas cash stockpile, buying the company more time to lobby Congress to its advantage. We reported shortly before the deal took place that Apple was filing the required SEC paperwork. The company plans to return $100 billion to stockholders by the end of 2015. Its next dividend payout is May 16.
Sony generating $1.9 billion via convertible bonds sales
Sony is raising a little extra "walking around town" money by selling convertible bonds to the tune of $1.9 billion. A third of the $1.9 billion will go toward an investment in Japanese optics company Olympus Corp., while some will be used to finance Sony's acquistion of Gaikai. Sony is also looking to repay debt and increase its financial focus on CMOS image sensors.In Q2 2012, Sony reported a net loss of $198 million, with a year-on-year decline in profit in the gaming division. PS3 and PS2 sales hit 3.5 million during the quarter, compared with 4.9 million the previous year, and Sony revised expected Vita and PSP sales for the year from an initial 16 million to 10 million.
The Daily Grind: There's a line, and you crossed it
The relationships we form in games are by their very nature kind of mercenary. You make friends in EVE Online not because you know your bosom buddy is waiting for you, but because flying in 0.0 is pretty dangerous on your own. So most of your friends in a game start off based on you deriving some benefit, and with a few exceptions that's where they remain. The problem comes when that benefit is outweighed by something else. That's when guilds of friends have nasty splits over what seem like minor matters, because someone crossed a line and no amount of in-game support is worth the drama. Sometimes it's all game-related, and other times outside drama shoves its way into the game. Either way, it's something bad enough that you're often cutting off a significant advantage -- sometimes even a whole guild and the concurrent access to the endgame -- for purely personal reasons. Those of us who have done so, though, rarely look back with regret. What about you? When has a relationship in a game passed the point where the benefits are outweighed by the drawbacks? Or have you only ever been on the flipside of the equation?
Found Footage: Android running on the iPhone
Hacker David "Planetbeing" Wong has posted a video of Google's Linux-based Android OS running via OpeniBoot on the iPhone. Obviously, it's way off of Apple's reservation, but as you can see in the video above, it works very well -- you can browse the web, play media, and even send and receive calls and messages. If you want to give it a shot (and of course, with all iPhone hacks, the usual disclaimers apply -- you might brick your iPhone or worse, cause Steve Jobs a headache), the files are all available for download from his site. Currently he's only got it running on the 1st generation iPhone, but he says that it should eventually be able to work with later versions. His goal, he says, is to eventually provide iPhone users with a supplementary or even an alternative OS, but as with most of these hacks, it seems like more of a novelty rather than a useful implementation. Still, if you've been itching to free the OS bonds of your 1st gen iPhone, now's your chance to try and slip free of the chains.
The strong bond between healer and tank
We often post about the bonds created with this game -- there are some terrific bonds between guildies, and Arena teams and battleground groups have some strong bonds as well. But Omen of Clarity and Resto4Life, two great Druid blogs, recently took a look at an even more intimate bond ingame: that between tanks and healers.Omen started it off -- after stepping into a tanking role, he noticed that a certain Paladin healer had really bonded with him in terms of keeping each other up and running, and it really made them both better players -- the tank was more willing to step up when aggro got lost, and the healer had more reason to keep up buffs and rely on the tank, even at his own expense. Resto, from the other side of the spells, agrees -- even out of raids, the healer there will send the tank potions and go out of their way to keep both together. And from my time raiding as a Resto Shaman, I was always thrilled when I got to be in the same group as the tank I was healing, and got to Earth Shield them and spend my trinkets just to keep them up.It's not the only major relationship in the game (there's also a nice relationship between the tank and the rest of the melee and DPS, as well as the buffers and the buffed in a raid group), but it is an interesting, minute one, and it's something pretty specific to these MMOs that we play. Playing together isn't just fun and games -- by building bonds with other players in other roles, we both become better at the roles we play.Update: Just in case, like Ratshag, our little hint on the picture wasn't enough for you, the two characters in the pic above are another fairly well-known tank and healer combo, Tree of Life and Pretty in Plate. You try to hide a subtle little easter egg in there for those of us who read all these WoW blogs, and Ratshag won't let you get away with it. Thanks for keeping us honest.
Farewell, my friend
For people who don't play the World of Warcraft or similar games, or do not spend much time on the internet at all, it's difficult to grasp the idea of bonds and friendships formed over the web. How can you be friends with someone you've never seen before? I can understand the inability to grasp such a thing, it's rarely easy to comprehend what you haven't seen or experienced yourself. To those who haven't had powerful friendships over the internet, it makes no sense how you can grow so close to someone you can't see, you can't touch.Even through the supposed anonymity of the internet, the greatest of friendships can be formed. Bonds so powerful that you never want to let them go, and may change your life forever, for the better. Despite the distance, despite the inability to touch and feel, you can grow as close as family to these supposed anonymous people. These individuals are more than just "internet people." They're people. In the World of Warcraft, a video game, I have found people that have truly changed me. I would not be the person I am today without them.I've been playing WoW since launch day, and the community I've been a part of in the game has been a constant for all of these years. People have come and people have gone, but for the most part, I've played the World of Warcraft with the same names, the same faces, the same people. I'm 21 now, and I started gaming with this crew when I was 17. I can safely say I've essentially grown up with these people. We reminisce on the old days, and we realize that we've all changed quite a bit since the beginning. We've matured together, we've grown up together. People who have never had this experience, as I said before, don't understand how you can form such bonds over the internet. Some of the greatest friendships I've ever had, and ever will have, have been on the internet. Some people you will never forget, no matter where you met them. This is something I've had to think about quite a bit the last few days.
Sony moves a step closer to junk; outlook "negative"
Fitch Ratings (a company that assesses the risk level of debt) announced today that they have downgraded several types of Sony debt to "BBB+" (the debt is still three notches above the dreaded "junk" moniker, however). Fitch also slapped a "negative" outlook on the debt, indicating that future debt downgrades are possible as "Sony's financial profile [continues] to weaken in the next one to two years." Reasons for the downgrade include:
