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Trion CEO introduces MMO investing to Bloomberg TV
Have you ever wondered where to invest your savings for the future? Have you thought about the MMO market? Apparently, multimedia companies like Time Warner, NBC Universal, and Bertelsmann believe it is worth their money. These three media giants have invested over $100 million into Trion Worlds, the top-tier gaming company featuring upcoming MMOs like Rift: Planes of Telara and End of Nations. Yesterday, Trion's CEO Lars Buttler was featured on Bloomberg's CEO Sitdown. In the interview, Buttler mentioned the role that games, specifically MMO games, will play in the future economy. "This is actually one of the fastest-growing segments of the games industry. And there are markets like Korea or China where you can see what a massive potential these online premium games already have," Buttler explains in the video. As MMOs become more mainstream, the media industry is beginning to see them as a viable form of entertainment. They are not just pretend fun for teenage boys anymore. Buttler expounds later, "It's really once-a-gamer-always-a-gamer, so as people get older they stay with their favorite game types." The industry is constantly growing because the audience sticks to its favorite form of entertainment. For more on this story check out the full video on Bloomberg's website.
On Apple's $40 billion, and the question of dividends
AAPL has been hitting new highs just about every day. Yesterday the stock price hit an intra-day high of $230.20, a lofty height indeed. We pointed out earlier that Apple now has the fourth largest market cap of any publicly traded domestic company, so maybe it's time to revisit the question of Apple declaring dividends on its stock. Apple has not declared a dividend since December of 1995. After the last shareholder meeting, Steve Jobs stated that the money was best left in the bank so there would be no question of loans if something big was to be bought. "The cash in the bank gives us tremendous flexibility," explained Steve. The Motley Fool makes an interesting case in favor of dividends. Apple has no history of massive acquisitions, and keeping $40 billion around for just that reason sounds less than reasonable. A case is also made for keeping the money as preparation for the next big recession. This doesn't seem to hold much water, however, since analysts predict that Apple will grow by 18% per year for the next five years. That should provide more than enough cash, predicting that Apple will report net income of around $21 billion in 2014. Of course, predictions are often wrong, but Apple has been excellent when it comes to beating expected earnings numbers for some time. 77% of informal Motley Fool poll respondents think that Apple should declare dividends. After all, that cash is really owned by the stockholders and it seems that a good number of them would like to get some of it back. Read on for another view.
Apple stock at another all-time high, market cap 4th in US
Apple's stock rose to another record high earlier today, reaching $228.36 at market close. That's almost another $10 above the record high it set back on March 5, which translates into nearly nine billion dollars in market capitalization gained in less than three weeks. Apple's market cap is so high that only three publicly-traded US companies have market caps higher than Apple's: Exxon, Microsoft, and a little retailer called Wal-Mart. Apple will probably never catch up to Exxon's market cap, which exceeds Apple's by more than $100 billion, and it has another $55 billion to go before it can surpass Microsoft -- not likely, but not impossible. Apple's market cap is within striking distance of Wal-Mart's, however, with only about $5.5 billion more to go before Apple surpasses the market value of the world's largest retailer.
Majesco threatened with Nasdaq delisting, again
Majesco, publisher of Cooking Mama and ... other stuff, has received a delisting notice from the Nasdaq stock market. The company now has 180 calendar days to bring its stock above $1 per share, the minimum required to remain on the exchange. The trick, though, is it can't just pop its fiscally hurting head above a buck for a day and everything will go back to being right with the world again. The company needs to hold the price for "a minimum of 10 consecutive trading days prior to August 30, 2010." This is not the first time Majesco was threatened with being kicked from the exchange. The company came back from the brink of that potential delisting disaster early last year. If you're curious to see what happens after a company is delisted, here are two case studies: Midway and Atari.
No Apple stock split...for now.
Thursday, Briefings.com, CNBC and a passel of other market analysts predicted that a 4 for 1 stock split would be announced at the Apple Shareholder Meeting. This rumor moved the market, but there are conflicting opinions to why. First, for the uninitiated, a stock split is a zero sum game. One interpretation is that a firm considers its stock too highly priced for the average consumer and decides to split. For example, let's say that Apple is trading for $200 and you have one share. If a 4 for 1 stock split takes place, you will wind up 4 shares, instead of 1, but each share will be valued at $50. Did you gain or lose any money? No. It's all on paper. However, to those not familiar with the Buttonwood tree, and that's a lot of us, it sounds like 'quick buy Apple and you'll be getting 4 times as much'. The case for this sort of stupidity is well made by Barrons. Stock splits are nothing new to AAPL. They've split 2 for 1 three time in the past, in June 1987, June 2000 and February 2005. There are two general schools of thought on the reason behind stock splits, and they are total opposites. The first theory is that a company will split a stock if it is in trouble to allow lower dollar investors to buy their shares at half the price and thus incur less risk. The other school of thought is that a good company realizes their stock is just too expensive for the small trader who has some cash on the sidelines. It is meant to give the small guy an easier way to buy some stock without needing to commit the $200 for a share. Both sides have their points and, to an extent, both points are based on smoke and mirrors since they do not effect the worth of the company or the aggregate value of the stock by one penny.
Nokia grows profits and smartphone share in Q4
Pretty good news for Nokia today as it announces its Q4 results. Net income jumped 65% to €948 million (on €12 billion in sales) or 26 eurocents per share, from €576 million euros, or 15 eurocents a share, earned in Q4 2008. That handily beat the consensus forecast of 19 eurocents per share. Importantly, Nokia grew its smartphone (or "converged devices" in Nokia parlance) marketshare to a healthy 40%, up from 35% just last quarter. Looking forward, Nokia cautioned that it expects its adjusted operating margin in Devices & Services in Q1 2010 will be at the low end of its 12% to 14% target. At the time of this posting, Nokia stock has jumped about 9% in recognition of these good times.
GameStop reveals 2010 capital allocation program
We know, we know -- you've been sitting around all day worried sick about GameStop. Ever since the recent announcement of a cut profit forecast and the resultant drop in share prices, we've been in exactly the same boat. Good thing then that the company has announced plans to repurchase $300 million in stock from investors as part of its 2010 "Capital Allocation Strategy," with intentions to increase earnings per share by 10 percent. Wedbush Morgan analyst Michael Pachter sees the announcement as "positive," echoing the company's statement of continued financial growth in 2010. "We believe that industry sales will rebound in 2010 and that GameStop is well-positioned to gain share the first half of the year. The company has high exposure to the hardcore software releases, which we expect to drive market growth in 2010, and comparatively low exposure to hardware, which we expect to decline," he says. It certainly doesn't hurt that GameStop plans to open 400 new stores over the course of the year -- the financials even leave $100 million on the side, reserved for "acquisition activity." It would appear that, at least for now, we can all can stop worrying. Finally.
The Daily Grind: Do you play the MMO stock market?
Ahhh, the stock market: The yo-yo that makes people jump for joy or jump off twenty-story buildings. Playing it can be just as exhilarating, frightening, and expensive as a high-octane weekend bender in Free Realms. Well, almost... With the quote-unquote Global Economic Crisis we've been going through, almost all stocks are down from a year ago. Does that mean that now is a good time to invest? It probably depends on whether or not you believe the market has hit the bottom yet.Word on the street is that the video game industry is recession-proof (or not). When you're pinching pennies, MMOs in particular are one of the cheapest forms of entertainment and escapism money can buy. We're not here to offer advice one way or the other, but we are curious -- do you play the MMO stock market? We did a bit of digging and found a number of stocks from companies producing MMOs: Activision Blizzard (ATVI) - World of Warcraft, new secret project Atari (FR:ATA) - Champions Online, Star Trek Online, etc. Electronic Arts (ERTS) - Warhammer Online, Star Wars: The Old Republic, etc. Funcom (NO:FUNCOM) - Age of Conan, The Secret World, etc. NCsoft (OTC:NCSCF) - Guild Wars, Aion, etc. Sony Corporation (SNE) - Free Realms, DC Universe Online, etc. THQ Inc. (THQI) - Dragonica Online, Warhammer 40k, etc. Based on that list, who do you think is the best investment and why?
Rumor: The9 to lose WoW in China
Trading Markets reports from the Xinhua News Agency that The9, the company that handles World of Warcraft in China, is likely to lose their license as agents of the game. Blizzard and The9 have not yet reached an agreement regarding the extension of their contract, although The9 representatives have repeatedly tried to quell these fears. President Xiaowei Chen has confidently stated that the contract would be renewed in June.An insider source, however, noted otherwise. Blizzard is said to have been unhappy with The9's performance over the past four years, and posed higher requirements in their renegotiation with the Chinese company. Recent troubles with the Chinese government in securing approval for Wrath of the Lich King hasn't helped matters, and The9 is facing bankruptcy should Wrath fail to get past China's censorship laws and negotiations fall apart. The online game operator gets 90 percent of their profits from managing World of Warcraft in China. The9 has refused to comment, only saying that negotiations have not been finalized.
Analyst: Nintendo profits have peaked, stock set to decline
Though Nintendo is currently making money faster than a brothel in shore leave season, Deutsche Bank analyst Satoru Kikuchi has given the company's stock a "sell" rating, usually reserved for companies who are facing an economic decline. Kikuchi foresees a slow trailing off for Nintendo's stock value -- he predicts an 18 percent decline over the next year, and an additional 19 percent drop sometime in 2011. The analyst referenced declining DS and Wii sales in Japan as evidence for his claims, adding that Nintendo's dependence on its few ridiculously successful titles (we assume he's talking about Wii Fit and Wii Play) will ultimately bring it down unless it introduces additional power sellers. Don't fret, Mr. Kikuchi -- we're sure Nintendo's got a Wii Fit 2 or Wii Play Again hidden somewhere up its gilded sleeves.
Virgin Mobile USA falls into non-compliance on NYSE, plans to get back on track
Virgin Mobile USA was one of the few outfits out there who managed to post a Q3 net profit, but even that couldn't help it avoid the unfortunate delivery of a non-compliance letter from the New York Stock Exchange. Just a few days before it slashed ten percent of its workforce, the company was notified by the NYSE that it was "not in compliance with certain listing criteria." More specifically, it's considered "below the applicable standards because the average market capitalization of its Class A common stock and substantial equivalents, over a period of 30 trading days, is less than $100 million." Now, it has 45 days to respond with a business plan that demonstrates its ability to get back into compliance within 18 months. Virgin Mobile USA has already texted (at least that's what we heard) the bigwigs on Wall Street with a confirmation that it would be working to get back on track, but even the best intentions fall through sometimes. Godspeed, VM.[Via mocoNews]
AAPL shares close up 8 percent
If you bought Apple at its lowest low yesterday, for just over a hundred bucks a share, you'd have made $13 per share back today. That doesn't cover your loss, of course, if you bought at its 52-week highs of just over $200 per share, but if you were a smart shopper yesterday, you got a heck of a deal. Goldman Sachs analyst David Bailey said that the yesterday's price drop was "overdone" and reiterated his "buy" rating and $200 price target. Citi analyst Richard Gardner also recommended buying, but cut his price target to $170 per share. "The recent sell off creates an opportunity as we think Apple will outperform our group through the end of the year, driven by iPhone unit upside and a strong product pipeline," said Bailey. AAPL closed today at 113.71, up 8.45 points, or eight percent from its close yesterday. [Via BusinessWeek.]
Game publishers bloody but unbowed after stock ruckus
Nobody but the most sunless and fungal of stock stereotype MMO-playing basement dwellers could fail to be aware of the recent events in the markets. Reports have been filtering through the various industry sites of how game publishers have fared. The stand-out news is Activision Blizzard's clobbering, ending the day 13.8 percent down; EA also suffered, dropping 9.16 percent. Various other game publishers also caught the flak, including UbiSoft who ended 14.4 percent down, but the overall sentiment is still the same: the game industry is robust. It would have been surprising if MMO publishers' stock hadn't suffered a decline in value, given the economic context. What's interesting to us is the attitude that games are a solid investment, possibly even more so in times of unease and uncertainty. Much like movies in the time of the Great Depression, MMOs offer a chance to escape the real world for a while and enjoy an immersive, imaginative experience detached from everyday concerns. The great mistake is to see that as a negative, a flight into escapism, rather than a crucial part of the process by which human beings recover their energy and return to coping with the world.
Publisher stocks hit by market freefall; analysts optimistic
If you haven't looked out your window today, you might have missed stocks that are falling faster than Chicken Little can blink. Game publishers were not immune, as the NASDAQ (where most publishers are listed) Composite Index fell 199.61 points, or 9.14 percent. As for the individual publishers, Gamespot points out that Electronic Arts saw a 9.16 percent drop to $36 a share. Activision Blizzard was hit hard with a 13.8 percent drop to $14.12 a share. As for the console makers, Sony and Microsoft saw a 5.09 and 8.72 respective percent drop. Overseas, Ubisoft's stock dropped a whopping 21.5% to €45.50 (US $65.37) on the Euronext market.Despite these stock drops, analysts speaking to Gamasutra remain optimistic, with Wedbush Morgan's Michael Pachter expecting none of the companies to be affected by the lending crisis. Lazard Capital Markets' Colin Sebastian predicts a "cocooning" effect where people flock to games as a cost-efficient form of escapism. In what is surely the most "no duh" prediction, Sebastian expects World of Warcraft to continue serving as an unwavering money stream for Activision Blizzard.[Image Source: Digg]
Discovery Communications gives you a say by going public
Looking to chime in on what kind of programming gets placed on any of Discovery Communications' many networks? No, we mean are you really looking to make an impact? If so, you can put your money where your mouth is now that the firm is listed on the NASDAQ. Yeah, it chose an odd and arguably terrible time in our history to go public, but it also ushered in a new corporate logo and website to fall more in line with that new Discovery HD logo that was unveiled this summer. It's hard to say if going public will have any immediate (and more importantly, visible) impact on programming, but if you're interested in getting involved, all the ticker details and whatnot are listed in the read link.
EVE Evolved: Money for nothing
In most MMOs, making currency without actually playing usually involves rule-breaking macro-farming which risks getting your account banned. In EVE Online, however, a number of viable options exist for making ISK with absolutely no effort. From hiring research and development agents to public investment schemes and even a player-run bank, there are plenty of ways to make ISK in EVE without even logging in.Investment Schemes:In the market discussion forums, players can sell shares in their company and present a business plan to potential investors. The corporation receives ISK in exchange for its shares and agrees to make regular dividend payments to all shareholders. Buyers have to trust that the company owner won't just run off with their ISK, so only the most trustworthy players have managed to successfully start very large investment schemes.In this article, I look at the different ways you can make ISK with virtually no effort, in some cases even if your account is inactive.
Activision stock reaches a new 52-week high
Steven Mallas over at BloggingStocks notes that Activision's stock (AVTI) capped a new 52-week high yesterday at $36.84. By the end of the day, the final price was slightly lower, but overall it grew nearly 5%. Mallas mentions what's on all of our minds -- Guitar Hero for DS, sure, but Activision is about to pick up a 10-million subscriber powerhouse called Blizzard. That's worth a little something to investors. So while other, similar companies lost share price yesterday (Electronic Arts and Take Two, for example), our Activision overlords (whom I, for one, welcome with open arms) continues to do well. With Wrath of the Lich King pending around the corner, we can hope for the stock to pick up a few additional pennies. I don't know what effect the whole eSport buzz might have, but it could still be too early to tell.
Nintendo stock rating downgraded because of demand worries
Nintendo stockholders have been profiting from their investments over the past year, but that might change in the near future. At least, that's what KBC Securities Japan thinks, and the company has thus downgraded Nintendo's stock investment rating from "buy" to "hold."One reason for the downgrade is the fear that Nintendo's sales will stall. Now that the Wii and DS have been around for a while, KBC is worried that demand for Nintendo's products will lessen in the coming months. The weakening dollar will also make overseas sales drop in value.Since economics is like alien speak to us, we're not sure how much weight KBC's rationale holds. It's true that Nintendo will have a hard time showing up the numbers of Wii Sports, Wii Play, and Wii Fit, especially in Japan -- the casual market is a key area when it comes to Nintendo's more explosive sales. Also, the DS is no longer the dominating force in Japan like it used to be, while the PSP has increased in popularity. Yet, even so, demand for Nintendo consoles and games is still high worldwide, so KBC might be jumping the gun. [Via Joystiq]
Nintendo stock downgraded on fears of slowing system demand
Despite Gamestop's recent assurances that the Wii will be hard to find for at least six more months, some think that the system's sales figures are about to peak. Exhibit one: KBC Securities Japan, which recently downgraded Nintendo's stock from a "buy" to a "hold" recommendation because of worries that Wii and DS sales will slow after "explosive growth" in the last year.The KBC report, which also includes a 30 percent cut in its 12-month price estimate for Nintendo stock, is also based on worries that the Japanese company will see its revenues continue to suffer as a result of the weakening American dollar. KBC's outlook stands in stark contrast to Nintendo's own bullish profit estimates over the last year of surging sales. Since everyone seems to be making predictions, we're going to go out on a limb and say that Nintendo's stock will plummet when contact with an alien race quickly erases all human want and destroys the international economic system as we know it. Hey, it could happen ...
WSJ: Strong PS3 projections makes Sony stock a "bargain"
Just as every cloud has a silver lining, every drop in stock value hides within it an opportunity for profit. At least that's what the Wall Street Journal seems to be saying with an article that argues the precipitous 26% drop in Sony stock this year could actually be an opportunity for bargain hunters.The Journal was heartened by the Sony video game unit's quarterly profit over the holidays -- its first in two years -- and sees increasing demand for the PS3 as a good reason to buy low in anticipation of selling high. Sony itself predicts sales of 9.5 million PS3s this year, and the Journal cites analysts predicting a whopping 14 million systems sold in '09. Pretty optimistic, considering the company only moved 3.6 million units in 2007, but with things looking up for the troubled system, it could happen.
