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Activision loses money, Blizzard to release one marquee game per year
Activision-Blizzard held a conference call for the press yesterday, and so there's all kinds of financial and release news floating around out there. The biggest news isn't necessarily Blizzard-related, but it does mean that our game's company is finally feeling the crunch a bit: Activision-Blizzard reported a loss of $72 million in the last quarter, and their outlook for the coming year fell short of analysts' expectations. Even though that sounds bad, it doesn't mean things are necessarily bad, though: Blizzard themselves added nearly a billion dollars to the total, so while A-B might not be doing so well, B is doing just fine.Blizzard CEO Paul Sams also announced during the call that the company is now aiming for "one 'frontline' title per year," though not necessarily World of Warcraft related. That likely means that we'll see the first Starcraft 2 this year -- our friends at Joystiq have a quick report on the beta appearing soon, as well as the Battle.net revamp we've been waiting for. And it also means that (unless Blizzard is really rolling on Diablo III, which I doubt, given its condition when we played it at last year's BlizzCon), that we'll be looking at mid/late 2010 for the release of the next WoW expansion.Besides the loss of the $72 million (it's always in the last place you look), things seem to be hopping at Blizzard and their parent company. Should be a pretty busy 2009 for them.
Sony games division expects increased loss of $337 million
Sony Corp. is having a bad year, and it appears that the company's games division isn't helping the situation. GI.biz reports that the PlayStation group is expected to increase losses by $337 million this fiscal year, though it's unclear what number the loss is increasing from. The erosion is due to lower than expected sales of hardware and software.Sony's video game division seems to have teetered between good and bad financial news over the last couple years. The very dim silver lining here is if the reports of Sony CEO Howard Stringer wanting to focus on software are correct, the PlayStation division shouldn't suffer as mightily as others.
Sony said to be sitting on $1.1 billion annual loss, first in 14 years
Belt tightening at Sony already underway during Sir Howard Stringer's keynote. There are plenty of directions to point fingers: trying to be a premium brand in a weak world economy, a strong Yen (harder to export) or difficulties in making the PlayStation 3 profitable, but whatever the cause, it looks like Sony lost $1.1 billion last year, the company's first practical loss in 14 years. Of course, the report isn't official just yet, earnings aren't due until the 29th, and Sony has put out a statement to that effect, with no further comment -- but let's just say this is a pretty widely bandied number at this point. This seems to line up with rumors of additional cost cutting, with 16,000 jobs already cut at Sony thanks to the hard times. But don't worry, the VAIO P with Windows 7 will save us all.[Via Electronista]
BlizzCon 2008: Bingo results
Bad news. We didn't hear about a WoW expansion, or anything solid about the next-gen MMO at the convention in Anaheim, so this year's BlizzCon bingo failed. There might be hope, if you're willing to fudge things -- in the Art panel, they did obliquely mention the next expansion, and quickly corrected themselves, so if you take that as an official announcement (and you saw someone playing the TCG or Board Game throughout the weekend, you could win with the free space). Or, if you saw Jim Lee while he was there (we didn't), and consider all the talking about Dance Studios to have actually seen the studios themselves (we don't) then maybe you hit five across that way.Otherwise, you're out of luck -- unfortunately, no one predicted that they'd cut Starcraft II up into three different games, and L80ETC didn't say anything about DLC for Guitar Hero. The good news, however, is that instead of giving out a prize to someone who presented us with a winning card at BlizzCon (no one did), we'll eventually over it to all of you readers. Stay tuned, and better luck with BlizzCon Bingo next time around.
iPhone 101: Re-downloading an application
Has a sync somehow gone terribly wrong and you've lost your favorite paid application for your iPhone or iPod touch? Well, if you didn't have a backup of it in your iTunes library, fear not. Apple has designed the App Store to allow for re-downloading purchased applications. All you have to do is navigate to the application that you originally bought in the App Store and tap "Buy." You will have to enter your password, and the App Store will return you to your home screen where it displays a message saying that you've already bought this application and are entitled to an additional free download. After you tap "OK," your app will begin downloading. Now you don't have to fret about losing your favorite iPhone or iPod touch application.
Forum post of the day: Using the Auction House properly
The economy in WoW has some interesting nuances. Players spend oodles of WoW gold on their crafting professions, and sometimes manage to turn a tidy profit. I'm often surprised to see some items that are strongly in-demand, like Light Feathers. Shrewd players use the auction house to build their bankrolls. Lomentari of EU-Draenor is exasperated with people who fail to use the auction house "properly." She is angry that other crafters are selling the same product she creates for several gold lower than her preferred price. The items are placed on the auction house en masse at the low low rate, which the original poster blames on Leather Workers skilling up. She feels powerless to do anything about her "massive money loss." The original poster is willing to accept small cuts in pricing, but has a hard time deal with steep declines in prices.
Forum post of the Day: E-Sportsmanship
I played softball when I was just a little mandy. I was in right field, and I wasn't particularly good, but I had a blast playing. Some how I came out of it with a few championship trophies and a lot of great memories. At the conclusion of each of our games we would line up as a team and slap hands with the opposition. "Good game. Good Game. Good Game. Good Game. Good Game." I'm sure that a number of you have had similar experiences. We were taught to be good sports when we won and when we lost. The fascinating part of an esport is that we are not face to face. Rather than bringing out our magnanimous natures, we tend to get cranky in the wake of a loss, and sometimes even after a victory. Karelle of Hydraxis admitted in the general forums the he is a poor loser. He felt he was unjustly beaten by a team that overgeared him and was insulted when the team leader whispered "good game." Rather than repeating the greeting, the original poster /spit on the victor.
Making/Money: Flawed by Design
Last week your intrepid blogger was caught up in the other kind of beta testing - a Statistics final. Yeah, that was a bad pun. Oh well. Back to the money talk!In the last column, we discussed value chains and how, in World of Warcraft, they work when dealing with NPCs but not the auction house. Today we are looking at another game and how it deals with value chains to ensure that they do not work when crafting by NPC purchases/sales alone.Lord of the Rings Online offers players vocations - sets of three linked professions that cannot be chosen by themselves. In any given vocation, there is usually one "useful" gathering profession which supports one of the craft professions in the set and another, unsupported, profession. In other words, vocations are structured to enforce cooperation and trade between players by ensuring that no one can gather all the raw materials they will require to level their craft. But that doesn't mean that the supported profession is good to go from the start.
Sony could be losing much more than $130 on every console sold
We know that the PS3 is an expensive system to make. Sony lost hundreds of dollars on each system sold, as the technology offered in Sony's home console is far more expensive than what it sells for in retail stores. Even now, over a year after the launch of PS3, Sony continues to lose money on each system. While Sony internal data suggests that the loss is $130 per system, a closer look by The Guardian shows that it may be much more."On Sony's own figures, the games division made a loss of $130 for each PlayStation 3 shipped. Let's assume that it's making pots of money on the PSP and the PlayStation 2: the PS2 is now hugely profitable and still sells more games than anything else. These two platforms could easily have made a profit of $1.2bn in the year. In that case, the total PS3 loss would have been $2.4bn shared between 9.24m PS3 consoles, or $260 per PS3 -- including any attached Sony games."While this is deduced from anecdotal evidence, it's clear that Sony is still losing quite a bit of money on each system sold. Perhaps it really is wise to forgo getting a large install base for now ... until Sony can reduce the costs of manufacturing even further.[Via Next-Gen]
Sega Sammy posts loss, job cuts imminent
It's no wonder Sonic is looking blue these days (har har). Sega Sammy has reported a ¥52.47 billion (US $501 million) loss in its fiscal year 2008, with sales of ¥458.98b (US $4.38b). Comparatively, the company posted ¥43.46b net income (¥95.93b difference) with ¥528.4b in sales (¥69.4b difference) in fiscal year 2007.According to GameDaily, Sega's entertainment group will be cutting 400 jobs and close 110 facilities. The company is predicting that fiscal year 2009, which ends in March 2009, will see a net income of ¥5b with sales of ¥470b.
Funcom fields tough quarter in anticipation of AoC launch
We all know that MMOs don't come cheap. While we still chuckle a bit at the suggestion that it takes an investment of over $1 billion to make a truly blockbuster MMO, it does cost quite a bit to keep a team of highly skills programmers and artists housed and clothed for the daunting 2 year+ development cycle that they're subject to these days.So when Funcom announced an earnings loss of $3.13 million during the first quarter of this year ending March 31, we can't say we were terribly surprised. They continue to subsist on revenues from Anarchy Online, which they've described as steady, while they gear up for the Age of Conan launch. While AoC is still less than a sure thing, they're confident that they'll have a strong launch, based on the million plus beta applications they've received and generally positive reports they've been getting from the experts.
Sony's game division to post smaller losses
Are things finally looking up for the Japanese electronics giant? Sony, plagued by a slowing US economy and weakening US dollar, has struggled to meet its financial targets. However, things aren't all gloom and doom. A report by the Nikkei (via Reuters) shows that Sony's video game division is starting to turn around. The fiscal year, ending in March 2007, was a disastrous affair for the company, with an operating loss of 232 billion yen. The high cost of PS3 production and development bled money from the department.However, due to improving sales and smaller manufacturing costs, Sony's game division will see its operating loss shrink by 100 billion yen in its March 2008 fiscal year. While that means it will still have lost 132 billion yen, it's certainly a turnaround from the previous year. Overall profitability of Sony has improved thanks to the game division's smaller losses.PlayStation, once the leading brand of video games, has been struggling since the launch of the PS3. In the latest console generation, Nintendo has been posting incredible profits (much to the happiness of investors). Microsoft's game division has historically posted loss after loss, but has finally started to become profitable in recent months.
Toshiba projects $669 million loss on HD DVD (and $459 million more)
While entering a format war is still worthy of a cautionary tale or two -- Sony, you may have been on a winning side this time, but we remember Betamax -- Toshiba appears to have escaped the fall of HD DVD a bit more intact than expected. Its official forecast for the financial year shows a loss of 65 billion yen ($669 million U.S.), a bit less than the ¥100b/ $1b U.S. figure anticipated last week. Unfortunately, the company as a whole is expecting slightly lower profits, so former red campers may not want to light cigars just yet.Update: That's actually 65 billion yen PLUS an additional one-time charge of 45 billion yen for a grand total ¥110b ($1.12 billion) going the wrong way in 2007's books. Hey Toshiba, uh, you guys want a Best Buy gift card?
Analyst: EA financial troubles are only beginning
While most analysts have been upbeat about EA's $195 million loss in the last quarter, Deutsche Bank analyst Jeetil Patel is saying it's only the beginning. Deusche Bank has downgraded the stock to "sell,", with Patel pointing to a "lack of major outperformance on unit volumes" among EA titles. He says despite market enthusiasm, EA is not achieving the profits it once did, a situation he doesn't see changing in the foreseeable future.One thing Patel really gets into is that EA's product is not moving quickly. He states that several of the next-gen games have been marked down within 4-6 months of release and thinks "this could become a more widespread problem considering lackluster product quality, weak sell-through thus far (even on major franchises), and a crowded holiday selling season that should favor a handful of titles (Call of Duty 4, Halo 3, Super Mario, Guitar Hero to name a few)." Games like Rock Band, The Orange Box and Crysis are pointed out as not being owned by EA -- they can't be depended on for fiscal franchise fortitude in the long term. Patel goes on to conclude that EA will continue to lose market share going forward.
Xbox division has $1.9 billion loss, blame red rings
For Microsoft's fiscal year ending June 30 the division which includes the Xbox posted a $1.9 billion loss -- $1.2 billion of that was from the fourth quarter alone when Microsoft owned up to the Red Ring of Death issues. The division actually climbed 28% over the year and may even be profitable soon according to Microsoft entertainment division lead Robbie Bach, who sold millions in stock just as the Red Ring of Death warranty issue broke -- but, that's just a coincidence.Microsoft says it shipped 6.6 million units of the Xbox 360 and now has a base of 11.6 million and manufacturing costs for the Xbox 360 continue to decline. They also say that revenue in games increased 19% to a total of $650 million. They're also expecting a blockbuster holiday with that little game called Halo 3 coming out along with some other highly anticipated titles. If it weren't for the RROD debacle Xbox wouldn't have actually had such a bad year. Now we wait for the price drop.
Atari lost another $70 million this year
Atari Inc. plans to report a loss of $71.3 million for their fiscal year which ended March 31. This is up from the $69 million loss from the previous fiscal year. Most of the loss is due to some jargon regarding an "impairment of goodwill," relating to a significant erosion of their market capitalization in which Atari lost an extra $54.1 million -- otherwise they would have only lost $17.2 million. In May, Atari cut 20% of their workforce and parent company Infogrames hasn't seen a profit in seven years.It's kinda sad seeing what Atari has become. Instead of being the granddaddy the industry looks up to, they've become the worthless geriatric that's been locked away in the state-funded old folks home and forgotten. Although, the upside is that Atari actually has some stuff we're looking forward to with Alone in the Dark and The Witcher. We'll find out next week if there is some hope for the future or if we can already begin reporting another $70 million loss for next year.[Via Gamasutra]
BlackBerry email outage ruins relationship
Okay, so maybe the writing was already on the wall and the recent BlackBerry email outages aren't solely to blame, but still, being the proverbial straw to break the camel's back deserves a portion of the censure. While we already knew that most fellas would undoubtedly choose a hot new gizmo over a foxy new lady, this mentality probably changes once you're already committed, and in the case of Rafael Paz, the recent email glitches cost him the latter. In another story hampered by horrific timing, Paz and his SO suffered through "a really bad argument" shortly before the breakdowns began, and after writing her man several emails and getting no reply, she cut the cord on their relationship for good. Of course, Rafael received the notes hours later, but apparently, his lady isn't "falling for" the so-called BlackBerry outages excuse. So while your business plans or daily routine may have been momentarily on the fritz, we're fairly sure the mass failure was kinder to you than it was to Mr. Paz.[Via Fark]
Left Behind Games leaves behind money
According to Next-Gen, Left Behind Games posted a $4.1 million loss for its fiscal third quarter. This was on top of a last year's loss of $934,000. It really doesn't mean much given their first product, Left Behind: Eternal Forces, just debuted at the end of the last calendar year.Troy Lyndon, CEO of Left Behind Games, says the company will be profitable within the year, "We are expanding our sales channels beyond major retailers to include more Christian bookstores, ministry sponsorships, church outreaches, Christian conferences, LAN center licensing, viral online and Internet sales, music concerts and trial versions. We look forward to a very prosperous year." Left Behind Games is already fixing previous mistakes by using Big Huge Games' (Rise of Nations) RTS engine and some of their staff to make a better sequel -- it's not like the next game could be worse.
PS3 hurts Sony profits, but less than expected
Yesterday's Bloomberg prediction that the PS3 would drag down Sony profits 50 percent turned out to be a little lofty. While the company's games division did show a withering 54.2 billion yen (about $446 million) loss for the quarter ending Dec. 31 (down from a 67.8 billion yen/$558 million profit in 2005), strong sales of Bravia TVs and other Sony electronics meant the company as a whole showed only a modest five percent decrease in profits for the quarter, year over year. Sony blamed the weak game unit performance on the massive costs associated with rolling out the PS3 and selling it at a substantial loss. Slowing sales for the PSP also hurt the bottom line, Sony said. Despite the bad news, the company actually raised their profit forecast for the fiscal year ending March 31. Still, unless Sony can find another quick-selling "champion product" along the lines of the PS2, Sony's bottom line may be continuing in this same direction for a while.
Sony losing mad loot on each PS3
We all knew Sony was dropping a fair bit of cash on each PS3 sold, but we suppose we got a bit too hung up on the resultant pricetags -- the notorious $499 and $599 SKUs -- to give the actual losses much of a thought. Well, worry not Sony, iSuppli's got your back. Turns out Sony will be losing change to the tune of $241.35 for every "premium" (WiFi and 60GB HDD) console, and a whoppin' $306.85 for the bargain-basement 20 gigger. In comparison, Microsoft loses $75.70 per 360 it sells, while Nintendo is laughing all the way to the bank with a profit per Wii sold. Just in case you missed it the first time around, or fell off your chair and forgot what you were reading about: Sony will lose the equivalent (or more) to the retail price of a competing console every time a cash register rings up a PS3 sale this holiday. We suppose it's for the best, then, that Sony won't have a whole lot of 'em to hand out, since we're sure Sony's own costs will start to drop as production really ramps up next year. Be sure to peep the read link for a full breakdown of the costs.UPDATE: Our bad, Microsoft actually makes $75.70 per 360 sold, as opposed to the $71 they were losing last year at launch.
