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Sun rises in the east, and the DS rakes in the money
Nintendo posted the final numbers for fiscal year 2006, and as expected, between the DS and the Wii, Nintendo's raking in piles of money that would make Scrooge McDuck's eyes pop. Is it the Wii? Alas, no; while Nintendo's latest has certainly been a powerhouse, the big N tells it like it is: 2006's major profits are due in large part to the DS. Last year, Nintendo sold more than 23 million DS units, raising the handheld's lifetime sales to over 40 million. Nintendo predicts similar numbers for the 2007 fiscal year, and triple the number of Wiis sold from release through March 31, 2006, for a total of 15 million units. That means that by this time next year, Nintendo's 226 billion yen profit will seem like small potatoes.It's good to be Nintendo right now.
Helio drags Earthlink earnings down, gets more cash from SKT
Alright, we've got good news and bad news. Which do you want first? The bad, you say? Well, it seems Helio's losses in the first quarter amounted to a $29.3 million equity loss for parent Earthlink in the same timespan, which ultimately accounts for over 97 percent of Earthlink's Q1 losses -- though in the earnings report, the company still seems pretty optimistic and committed to its MVNO lovechild with Korea's SK Telecom. Speaking of SK Telecom, the good news: Helio's other corporate parent said this week that it would be injecting additional capital to help out with marketing efforts (though would maintain the same equity balance in Helio with Earthlink that it does now). Like Earthlink, SK Telecom sounds optimistic about Helio's future, saying that despite falling short of initial expectations, ARPU (average revenue per user) and subscriber count are both looking up for 2008 and 2009. Something tells us the upcoming Ocean is going to help with those efforts significantly.Read - Earnings release [Via mocoNews]Read - SK Telecom's plans
RIM reports revenue up 66 percent over last year
RIM, -- previously known as NTP's patent punching bag -- seems to have clawed its way out of the misery that was last year and is showing some signs of a pleasant recovery. The Canadian messaging monster is reporting preliminary earnings in the 4rth quarter of $930.4 million, up 66% from the same quarter last year -- though we suspect that the $612.5 million payout to NTP is reflected here. Year totals are equally impressive with sales of $3 billion, which is up a booming 47 percent. Aside from the financial mumbo jumbo, what really caught our eyes is the addition of 1.02 million new subscribers (in this quarter alone) giving RIM a fat total of 8 million happy messaging enthusiasts. In the spirit of keeping things moving on the Blackberry front, what we really need to see now is some WiFi goodness in a handset, mmmkay RIM?
Sony may offer swag in exchange for your Cell cycles
So it's one thing getting people to contribute their spare processor cycles to a noble cause like Folding@Home, but it would be quite another convincing gamers to leave their PS3s on at night so that large companies -- like the ones that they perceive screw them over on a regular basis -- can solve tough problems and make even more money. Yet the Financial Times is reporting that Sony has already fielded several inquiries from private firms keen on doing just that, harnessing the power of all those idle Cell processors to simulate a relatively cheap cheap supercomputer; of course, this leaves the Japanese giant in a sticky situation of trying to capitalize on that interest in the wake of a likely backlash from owners. The simplest solution? Offer gamers a carrot, or in this case, free points, products, exclusives, etc., etc. -- something so they feel like they're profiting too, and ideally, in direct correlation to the amount of time they donate. So far this is only speculation and conjecture, though, so turn down that beeping on your swag radar -- and make sure that whatever you do, you don't let Sony bribe you into giving up all your Folding donations for a few bonus game maps and a bunch of stickers for your controller.[Via Joystiq]
The DS propels Nintendo to new heights of profit
The Wii may be exceeding the goals that have been set for sales, but it's the DS that continues to be the backbone of the Nintendo profit machine, and it's thanks to sales of the handheld that Nintendo has raised their financial forecast for the fiscal year that ended March 31. The actual reports won't be available until the end of this month, but Nintendo continues to raise their estimates. We guess there must have been a recount somewhere, and we know how messy those can be. So what's the new estimated figure? 966 billion yen, which factors out to about eight billion in U.S. dollars, up from a mere 900 billion yen. We're starting to think the DS really does print money. Is that available as a homebrew app?
Motorola gives bleak outlook, plays musical chairs with execs
Okay, look, we seriously don't support laughing at Moto's misfortunes, and that's the truth -- but they just made it too easy here. Above is a screen shot of AP's brief about the sitch as it appeared for us on Yahoo! News. How better to compliment a MOTOSTRY than with a MOTOADVT, right? The ad here is encouraging us to get our news right on our V3xx, even if said news has to do with Motorola's bleak outlook for fiscal '07, apparently. Come on, if you don't get a good belly laugh out of that, you need to check your pulse... so yeah, anyway, the post-RAZR hangover continues at Moto, with CFO David Devonshire "retiring" to make way for Thomas Meredeth effective April Fools' Day. Profit forecasts are also continuing to follow their downward trend, with the first quarter now expected to rake in revenues of $9.2 to 9.3 billion, down from the $10.4 to 10.6 billion quoted just two short months ago. CEO Zander himself blames much of the shortfall on competitors' price pressures in the low-end segment; personally, we blame the shortfall on the fact that we still don't have a frickin' MOTORIZR Z8 in our hands, but what do we know?
Analyst: Developer profits to suffer until 2008
It might seem odd to suggest that the games industry is struggling in light of recent sales reports that show healthy growth in both software and hardware revenue. But a recent report from media analysts Screen Digest seems to do just that, saying most game developers will have trouble turning a profit until 2008. The analysis, as reported by the BBC, suggests that rising development costs, long production timelines and small, fragmented user bases for the newest generation of systems means sales often don't make up for production costs. The end result? "Sequels to popular games or those based on films are now the focus." Say it ain't so. The article goes on to contrast Microsoft's strategy of buying up exclusives to Sony and Nintendo's focus on home-grown hits, but it doesn't really address how to solve the core problem of runaway budgets and overwrought game design. If developers can't streamline and simplify their design processes, the industry may be doomed to a hard-to-escape downward spiral of increased costs and increased reliance on proven brands and unoriginal ideas.
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.
50-percent of your iPhone purchase to pad Apple's wallet?
Sure, LG's KE850 Prada handset will set users back a cool $778, and the Google Switch just might pop in to make things a bit more interesting, but a recent research report has unveiled that Apple's sure-to-be-sold-out iPhone is a lean, mean, profit-generating machine nonetheless. While Apple's well-known for selling its iPods (and to a lesser extent, its Macs) for much, much more than it cost to manufacture, even we're a bit taken aback at how hard those corporate buyers must be workin' those suppliers on this one. According to iSuppli (no affiliation with Apple, of course), the 4GB iPhone will yield a "49.3 percent profit margin on each unit sold at the $499 retail price," while the 8GB rendition will kick back a 46.9-percent margin. You heard right, they're supposing the $499 mobile only costs Apple $245.83 to produce, while the 8GB flavor demands just $264.85. Of course, this isn't the first time a hot-selling product has been broken down by the numbers to prove just how ripped off we're all getting (if these numbers are to be trusted, that is) -- but hey, unless you've got the means to buy capacitors and LCD touchscreens by the boatload, you're probably stuck paying exactly what they ask. Plus if all this sudden competition gets a bit too heated, don't think Apple doesn't have any room to introduce a (highly desired) price drop.
Nintendo raises profit forecast....again
Nintendo's stock has been going up like ... like, um ... like Apple's stock! But not even the bookies could predict such a dominating performance (sorry, I just couldn't resist that link ... go Gators!), and as such, Nintendo has had to once again raises its profits forecast thanks to extremely strong game sales for both the Nintendo DS and the Wii. How much, you ask? One billion dollars. That's USD, folks.We also have a gem of a quote from one Edwin Merner, president of Atlantis Investment Research Corp. in Tokyo: "Nintendo is going like gangbusters, and the Wii consoles are selling like hotcakes." Gangbusters, huh? According to UrbanDictionary.com, a gangbuster is: "a sexual advance made by someone in an attempt to turn on another person." Hot, Edwin. Very hot.
Microsoft: "Does it make sense for us to be in the movie business?"
The interview with Microsoft's Robbie Bach is all over the grid today. While most of the hubbub on the net concerns price cuts for the 360, there's another little gem in this interview. Bach replies to a question about the lagging progress of the Halo movie by saying, "There are a couple of things you have to recognize. Does it make sense for Microsoft to be in the movie business? It's not what we do, nor would I anticipate us ever doing it."Bach is saying this to the people who ask why Microsoft doesn't just fund the reportedly $200 million dollar budget film themselves. It's also why Microsoft got into trouble with the film to begin with. Both Fox and Universal pulled out of the deal because MS wanted them to pony up $5 million upfront and then 10% of all the film's profits later. The three companies couldn't come to terms on the deal when the studios tried to change things, and the picture fell apart.
A Playstation 3 Confession
Friends, I have a confession to make. Last year when our beloved Xbox 360 hit store shelves there was a bit of a shortage, fanboys went crazy, parents were angry, and kids were sad. Microsoft just couldn't make enough consoles to supply the consumer's massive demand. And so many people felt they had no other options left, no where to turn, no other choice but one. Those consumers who needed a 360 by Christmas had to go spend their money on eBay where Xbox 360s were selling for crazy inflated amounts. Those who preordered the white console or had an extra one made a killing on eBay, racked in the big bucks and chuckled as they were selling Xbox 360s for two to three times their value. Well... we've come to a similar situation this holiday season with the release of the ::shiver:: Playstation 3...
Games a big part of Sony profit woes
The Japanese PS3 price cut and slower-than-expected sales of the PSP are among the reasons being cited for Sony's announcement yesterday of a 62 percent drop in profit forecasts for the fiscal year ending in March. The revised numbers include a 200 billion yen expected loss for the games unit, nearly double the initial estimate for the fiscal year, and costs incurred during the recent recall of many Sony laptop batteries.Sony also announced reduced shipment targets for the PSP, down from 12 million units to 9 million units for the fiscal year. The reduction mirrors a recent increase in DS sales expectations from Nintendo from 17 million to 20 million units for the business year.
Wii: it's all about the bling, son
A report over at Reuters is quoting Reggie Fils-ass kicker, name takerAime as saying that the Wii "will make a profit on the entire Wii proposition out of the box -- hardware and software." This is good news for Nintendo, who are not adapting the business models of their competition. With Sony and Microsoft, initial units sold are at a loss, so in this manner Nintendo has already managed to win in the next-gen console wars.Now that we have the pricing on the hardware, is this the reason the Wiimote and nunchuk attachment cost a ridiculous amount of money, to ensure profit immediately?[Via Joystiq]
Vivendi profiting from WoW; in other news, Pope Catholic
Vivendi is certainly raking in the cash from its subsidiary Blizzard -- the company has recorded a 12.1% boost in profit for Q2 2006, and attributes much of it to WoW's phenomenal success. This isn't exactly news -- Vivendi has been reporting continual increases on last year as WoW has grown -- but it's something to think about as a player.I frequently see comments on forums and in general channels along the lines of "Blizzard are making loads of money, why don't they fix our servers/add new content/pay attention to me?". It's certainly true that Blizzard and Vivendi are profiting from WoW, but how many corners are being cut in order to announce new profit highs? Even if Blizzard are doing all they can with the vast sums of money available, having players who think they are doing nothing with it is bad communication. These days, when Blizzard say they are aware of a problem and working to fix it, few of us believe it.
Apple receives "outperform" rating on back of MacBooks
The MacBooks are selling well. Really well. According to an article at Apple Insider, shipments of the spiffy little laptops are currently 200,000 units ahead of the initial estimate (580,000) made by Robert Semple of Credit Suisse equity research. Semple identifies the education market and back-to-school shopping (as well as the attractive $1099US price tag) as being largely responsible for the impressive sales. This has caused both Apple's fourth quarter earnings estimate and fiscal year 2007 estimates to climb.I can tell you that we ordered a couple here at my day job, as well as a single MacBook Pro from a third party vendor, and they're all back ordered. We'll see what effect tomorrow's announcement has on Apple's projected bottom line soon enough (I'm guessing it won't be bad).
PSP shipments down, but software gaining momentum
While we were so hyped up about the new 2.80 firmware, some of the smaller news stories fell through the cracks. For example, Sony revealed their quarterly results, and revealed that yes, they finally made money. But, that money certainly didn't come from the games division. Rather, sales of digital cameras, cell phones, and the theatrical release of The DaVinci Code seemed to pour the cash into Sony's pockets. The games division has seen a 29.1 percent drop in sales and operating revenue for this quarter, and the operating losses have increased this quarter to $232.2 million.Sales for PlayStation 2's notably aged hardware and software predictably went down. Unfortunately, it appears that demand for PSP hardware has dropped worldwide, resulting in approximately 3% less shipments this quarter (note that shipments and sales are two different figures). However, shipments for software have nearly doubled, reaching 9.1 million (an increase of 4.2 million).While hardware may have seen a small dip, that software figure shows a still-impressive run for the PSP. It appears that the games division will be making most of its money from the PSP for now, as analysts predict that PS3 manufacturing costs will cost the company $2 billion within a year.[Via Gamasutra]
Vodafone sheds 21.9 billion in fiscal 2005
Despite a $15 billion sale of Vodafone Japan to Softbank, Vodafone proper managed to lose some $40.7 billion in the fiscal year ending March 31, making it the largest single full-year loss in history for any British company. The world's #2 operator blamed writeoffs and stiff European competition, but another contributing factor could be Vodafone's ongoing trend of hemorrhaging much of their revenue in the form of dividends -- over $10 billion of the Japan sale, for example, was returned directly to shareholders. We know they're denying it, but is a sale of Vodafone's stake in Verizon starting to look appealing? Or is Vodafone itself looking ripe for the picking?
Advice for wannabe game developers
The days of the bedroom coder are mostly behind us, though casual games and mini-games still provide the opportunity for a single coder to make it big -- not to mention one-man projects like Rag Doll Kung Fu which don't quite fit into the above categories. If you're interested in running your own game development project, Download Squad has some business advice for you. Covering engines, team-building, documentation, project management, testing, marketing and the all-important "making money", this article is a useful starting point and gives a good idea of what's actually involved in a small-scale game development project. Of course, you'll want to do further research before embarking on such a project yourself.
