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NCsoft offices undergoing 'realignment'
The hits just keep on coming for NCsoft. In the wake of City of Heroes' closure, the publisher's Seattle offices are apparently undergoing "realignment." The company has denied that the Seattle office is closing but has noted that several positions in the office have been terminated as a result of recent events. No details were released regarding how many people have been let go or how this will affect titles under NCsoft's aegis. NCsoft made a similar round of layoffs last year in October, with several offices hit with large staff reductions. This round comes in the wake of continued losses for the company, including a 12% reduction in revenue in 2011, major losses already posted from earlier in 2012, and a stock price that is currently half of what it was earlier in the year. Our best wishes go out to all those affected by these layoffs.
The Soapbox: I demand to pay more for this!
Champions Online launched amidst a bunch of controversy. Admittedly, this was back in a time when we as a community had a much lower bar for controversy, but still, there were accusations and recriminations flying around like, well, superheroes. One of the chief complaints was that the game had a subscription fee, but it also had a cash shop right from launch. Scandalous! These days we don't blink too much at this sort of thing. Pretty much every game in the world has a cash shop now, and the rare exceptions are games that try to pretend it's something else. But there are still a lot of people who object to the idea, who would much rather have a subscription or nothing or see everything from the cash shop free to subscribers. I am not one of those people. In fact, I'm happy when a game goes into the free model or just opens up a cash shop of any stripe. The way I see it, there are some definite upsides to having a cash shop.
The Daily Grind: Do players ask for too much free in a free-to-play game?
In a couple of decades, I imagine that telling people that playing an online game used to cost money will be met with some strange looks. These days everything is going free-to-play, with only a few games holding on to the traditional subscription model. As a result, though, I can't help but find more people complaining about how much a game gives you for free and what things should never exist in a free-to-play game, despite the fact that as little as three years ago the business model in its entirety was considered an also-ran. On the one hand, this is totally reasonable -- companies have found a lot of ways to monetize games of late, and some of those have become both ubiquitous and incredibly annoying. On the other hand, it's increasingly difficult to establish a baseline of what anyone "should" get for free in a game when the concept of "games are free to start playing" is fairly new. So what do you think? Do players expect more to be free in a free-to-play game than is realistic? Every morning, the Massively bloggers probe the minds of their readers with deep, thought-provoking questions about that most serious of topics: massively online gaming. We crave your opinions, so grab your caffeinated beverage of choice and chime in on today's Daily Grind!
Samsung makes $7.4 billion in Q3 profits, surpasses expectations
Samsung set the bar a little lower than the final mark when it told investors its expectations earlier this month, posting $7.4 billion in operating profits for Q3 and $5.97 billion in net income. This handily bests the $7.28 billion profit it told investors to expect, nearly doubling what it made over the same period last year. Why the jump? You can blame the Galaxy S III, which increased shipments "significantly due to global expansion," the company says. Indeed, smartphone sales are credited to Sammy's quarter over quarter leap in revenue. Consumer electronics sales also boosted profits a fair deal, achieving "industry leading profitability" in the TV market, according to Samsung, who cited growth both in the consumer space, and in the sales of OLED panels for televisions, tablets and high-end smartphones. The company's semiconductor sales, on the other hand, dropped by eight-percent in the face of weak PC demands. Samsung expects demand for PC DRAM and other high value-added chip products to remain weak, but optimistically notes that the sector is still profitable, and may pick up as new devices come to market. Got the basics? Great -- dive into the details and charts at the source link below, or read on for Sammy's official Q3 press release.
Wii U will sell at a loss from launch
The Wii U will sell at a loss when it launches, Nintendo revealed today. In an investor briefing, Nintendo President and CEO Satoru Iwata disclosed the console's price is "below cost," citing it as one of the reasons for the company's reduced annual net profit outlook announced yesterday. The 3DS, however, is now no longer selling at a loss, a turnaround Nintendo predicted earlier this year.Iwata's statement reads: "In addition to the yen's continuous appreciation, the Wii U hardware will have a negative impact on Nintendo's profits early after the launch because rather than determining a price based on its manufacturing cost, we selected one that consumers would consider to be reasonable. In this first half of the term before the launch of the Wii U, we were not able to make a profit on software for the system while we had to book a loss on the hardware, which is currently in production and will be sold below cost. Our loss has therefore widened during the second quarter in spite of bringing the Nintendo 3DS hardware back to profitability. Although we expect our financial performance to be revitalized, under these circumstances, unfortunately we cannot say that we will achieve "Nintendo-like" profits within this fiscal year."Nintendo revealed yesterday a loss of approximately $351 million for the first half of its fiscal year, along with predicted annual net profits of $75.2 million, down from $251 million. However, Nintendo expects to sell 24 million units of Wii U software worldwide by the end of March 2013, on the back of the 5.5 million consoles the company predicts it'll shift in that time. Iwata also noted GameStop has taken 250,000 Wii U pre-orders in North America, as of last week.
Nintendo cuts annual profit forecast by 70%, first-half loss of $351 million
Nintendo slashed its annual net profit outlook by 70 percent, following first-half losses of approximately $351 million, 40 percent greater than expected. Ahead of the Wii U launch, the Japanese company now expects net profits of ¥6 billion ($75.2 million) for the fiscal year ending March 31 2013, compared to initial forecasts of ¥20 billion ($251 million).In those initial forecasts Nintendo predicted losses of ¥20 billion for the six-month period ending September 30, but today revealed a significantly greater figure of almost ¥28 billion ($351 million). The company cited weaker than expected overseas sales of 3DS hardware and software, along with increased yen appreciation.Nintendo also revealed the 3DS shifted 5 million units across the six months, taking the console to over 22 million worldwide sales to date. The company now expects 17.5 million sales for the 3DS by the end of the fiscal year, down 1 million from initial projections.Nintendo of course expects the Wii U to takes figures back into the black in six months time, with the company now predicting 5.5 million units sold worldwide by March 2013.
ARM posts healthy Q3 profits: up 22 percent thanks to smart TVs and other growing markets
British chip designer ARM has just revealed its accounts for Q3 2012 and they show a familiar pattern: namely, a double-digit rise in both revenue (up 20 percent to £144.6 million, or around $230 million) and pre-tax earnings (up 22 percent to £68.1 million). According to Reuters, the company is attributing its latest bout of success to making "further inroads" into growing markets like smart TVs and microcontrollers. Of course, all of this is stands in stark contrast to the traditional x86 PC world, where giants like Intel and AMD have been struggling with weak demand.
Samsung expects around $7.28 billion in operating profits for Q3, setting another record
Samsung has provided investors guidance ahead of its full Q3 earnings report that's due before October 26th, and as has been the custom, the numbers are huge. It's expecting a fourth straight record quarter with overall operating profit of 8.1 trillion won ($7.28 billion), an amount that would more than double last year's results for the same period and clear Q2s $5.86 billion, all on sales of 52 trillion won ($46 billion). We'll have to wait for the full report to see numbers broken down by department, but it's safe to say that there's a lot of Galaxy S IIIs (it ticked past 20 million last month) adding up to reach that pinnacle. Reuters and Bloomberg have predictions from various analysts on how many handsets, RAM chips and flat-panel HDTVs were sold, but if its legal battle with Apple ends in the worst-case scenario, at least we figure Samsung will have enough left over to keep the lights on.
Investment group predicts positive returns for Star Wars: The Old Republic following free-to-play announcement
Yesterday's bombshell from Star Wars: The Old Republic has prompted the usual spirited debate among fans over the game: Is this a last gasp before it dies or a smart move in the current MMO marketplace? Wedbush Securities believes it's the latter, with analyst Michael Pachter stating that the news from Electronic Arts is positive and that the change in business models should result in a significant profit for the game. Pachter described Wedbush's reaction as "incorrigibly positive," with specific emphasis on EA's digital catalogue and the free-to-play shift for Star Wars: The Old Republic. According to his analysis, the change in business models will remove the most significant hurdles from potential players, leading to a net increase in revenue from the game. The market as a whole responded positively to the financial news, with EA's stock rising six percent as a result of the call. Pachter has previously been critical of the MMO market, having claimed in early July that subscriber numbers have peaked for the industry as a whole.
Samsung's Q2 2012 earnings show $5.86 billion operating profit, that's a lot of Galaxy S IIIs
The numbers for Samsung's Q2 2012 earnings period are in and it was another big one, with the electronics giant reporting an operating profit of $5.9 billion, driven largely by growth in its smartphone business -- just as it predicted. That's up 79 percent from the same period last year, with the Galaxy S III and Galaxy Note specifically mentioned as having contributed to both high sales and higher average selling prices. The company doesn't break out exact selling figures in its earnings reports, however that business unit contributed $3.65 billion in profit to the bottom line. Sales of memory chips and processors declined slightly from last year, TV sales were up slightly, thanks to demand for 3D and LED models. Samsung is claiming a mid-80 percent share of LED HDTV sales and plans to keep that going by pushing "entry level" models in emerging markets. Ready to dig through the numbers yourself? The press release follows after the break, if we find any more details or hear anything on the earnings call, we'll let you know.
LG Q2 2012 earnings show a loss on cellphones, but higher profits overall thanks to home theater
LG has released its earnings statement for the Q2 2012 period, the claim of "turning a corner" in Q1 has just managed to hold up as it registered net profits of $138 million, up 46 percent from the same period last year. Revenues, while higher than Q1, were actually down from last year and blamed on declines in featurephone sales and slow sales of IT products. The mobile division also struggled after a strong Q1 and took an operating loss, however the positive takeaways are a rising percentage of smartphone shipments and plans to launch new LTE-connected models in North America (we've spotted the likely Spectrum 2 for Verizon already), Europe and Asia later this year. The good news for the home theater segment continued however, with an operating profit of more than double last year at $187.5 million despite slightly lower sales due to an increase in sales of premium products like its Cinema 3D HDTVs, which it expects to become the "top global seller" in the 3D segment. There's more details in the press release after the break or PDF linked below if you need more numbers.
Ask Massively: Owls, the bears of the sky edition
It is important in these troubling times that we understand what things are in relation to other things. Dogs, for example, are very clearly the sea lions of the land. Volcanoes are the ulcers of the earth, camels are the ships of the desert, and hoodies are the kangaroo costumes of the non-Australian. But what are owls? Owls are the bears of the sky, my friend. Inversely, bears are the owls of the land. I hope this makes your day-to-day life significantly easier. Now that I've gotten one of your major questions out of the way, I guess I can move on to finish up with the rest of Ask Massively, which discusses free-to-play profits versus sub profits and more about our comment system. (For the record, our comment system is the smoke signal of the site, if smoke signals also involved smiley faces and memes.) If you've got a question you'd like to see answered in a future installment of the column, mail it along to ask@massively.com or leave it in the comments below. Questions may be edited slightly for clarity and/or brevity.
ABI: Apple and Samsung have over 55 percent of the smartphone space, 90 percent of its money-making
Tech finance sleuth Horace Dediu was clearly astute when he determined that it's really Apple and Samsung's smartphone world, and we just live in it. ABI Research just estimated that, combined, the iPhone and Galaxy creators were responsible for more than 90 percent of the profits in the first quarter of 2012 -- mostly through carving out more than 55 percent of the total market share for themselves. We already know that only a handful of companies, like HTC, were making any kind of profit at the same time; ABI, however, has underscored just how much of a mountain Nokia has to climb to reclaim its glory days. For Nokia to completely make up for Symbian's decline, shipments of Lumia phones will have to jump a staggering 5,000 percent this year. The Finnish phone maker is certainly hopeful, but with the 80 percent growth rate in China mostly being led by locals like Huawei and ZTE, that's no mean feat.
Lenovo beats PC market with 46 percent profit surge
Yep, it's party-time in Beijing once again. While the PC industry as a whole reportedly grew by a tight handful of percentage points over the past year, Lenovo has somehow managed to continue its long-running growth spurt, with shipments up 44 percent and operating profits up 46 percent. Sales of both laptop and desktop (including IdeaCentre all-in-ones) grew roughly equally, helped along by blossoming demand in emerging markets, while fledgling smartphones and tablets also proved popular in Lenovo's homeland. The manufacturer reckons it's now second in command of the market behind HP, although it conveniently disregards Apple's iPad from its ranking.
DirecTV adds 81,000 subscribers during Q1 in the US, increases revenue by 12 percent
Unlike with Comcast, Wall Street experts weren't surprised by DirecTV's latest Q1 results -- in fact, they were quite disappointed. The satellite provider only managed to add 81,000 subscribers in the US of A during the quarter, which is more than a 50 percent decrease compared to last year's Q1 (184,000). Meanwhile, DirecTV did see a 12 percent increase in revenue, pushing the total to about $7.05 billion. That last bit thanks in large part to landing over 590,000 new customers in Latin America, though that didn't keep its current share price from dropping about 2.7 percent to $46.60. Nonetheless, DirecTV CEO, Mike White, says his company "delivered another strong quarter [..] highlighted by double-digit revenue, EPS and cash flow growth." Us? Well, we're wondering why those "roadside ditch" commercials aren't luring more Stateside folks away from cable...
Samsung's Q1 2012 profits nearly double year-over-year on higher margins for TVs and phones
The numbers for Samsung's first quarter of 2012 are in and as it expected they are up sharply over the same period from 2011. After predicting profits of 5.8 trillion won it managed to top that, notching an operating profit of 5.85 trillion won ($5.16 billion US) for the quarter, a 98 percent gain over a year ago. Phones accounted for 73 percent of the profit, contributing 4.27 trillion won to the bottom line. As the world awaits the debut of what we assume will be the Samsung Galaxy S III May 3rd powered by its Exynos 4 Quad CPU, there's clearly no shortage of demand for the Galaxy S II and Note. Sales of chips and TVs decreased from last quarter, but like its competitor LG, growing sales of high res tablet panels (we wonder which one that might be), 3DTVs and OLEDs increased profitability. Specifically, the high end 7000/8000 series of HDTVs increased sales by 50 percent from last year, while the company plans to focus on "region-specific" LED models for emerging markets, and high end (and high priced) flat-panels for developed markets. We're listening in to the earnings call at the moment, and we'll let you know if there's any other details that come out of what is mostly boring numbers talk. So far it's all pretty businessy, although in response to a question executives did confirm that they expect the Galaxy S III and Galaxy Note to occupy different segments in terms of size. So there you have it -- the Galaxy S III will (shockingly) not have a 5.3-inch screen. Also, it predictably is trying to continue the trend of global launches, although that hardly puts to rest the issue of how long we may end up waiting for carrier-specific versions here in the US. Check out the rest of Samsung's details in a press release and a few slides from the report embedded after the break.
3DS sold under cost since price cut, Nintendo 'hoping' to profit by March 2013
Nintendo took a big hit last year when it dropped the price of its then-nascent handheld, the 3DS, to $170 just a few months after initial launch. Such a hit, apparently, that Nintendo is selling the unit for less than it costs the company to produce, as revealed in the company's latest financial earnings. "Its hardware has been sold below cost because of its significant price cut in the fiscal year ended March 31, 2012," the financial report says.But don't count Nintendo out! The company says it "expects to cease selling it below cost by the middle of the fiscal year ending March 31, 2013." Which, in normal human terms, means Nintendo expects to start making money on the console around August of this year. So, you know, if you're really trying to stick it to Nintendo, go buy the 3DS between now and August. That'll show 'em!The 3DS currently sells for $170, down from the $250 price tag it launched with back March of 2011.Update: We've added context from financial analyst extraordinaires Michael Pachter (of Wedbush Securities) and Jesse Divnich (of EEDAR) just below the break.
Nintendo posts first annual loss of $460 million, predicts turnaround next year
Nintendo has announced its first annual operating loss following an initially lukewarm response to its new 3DS handheld and an aging Wii console -- set to be replaced later this year. Nintendo made an operating loss of 37.3 billion yen ($459.54 million) from 2011 to 2012, but intends to spin it around to a 35 billion yen operating profit in the forthcoming year. Net sales dropped by 36.2 percent compared to 2010-2011 , despite price cuts on its existing hardware like the 3DS and Wii. The Japanese games manufacturer has also seen increased competition from new rivals on Apple and Android hardware, as mobile gaming continues to go from strength to strength. Nintendo also laid some of the blame at the feet of the weakened yen, but expects the incoming Wii U, cheaper 3DS production and incoming titles like New Super Mario Bros. 2, Brain Training and Animal Crossing will all help turn its fortunes around. Nintendo intends to stop selling the 3DS "below cost" (that is; at a reduced manufacturing cost) by the middle of the next financial year, after strong sales from the substantial price cut last year. The company sold 13.53 million 3DS devices and 36 million 3DS games, compared to 80.2 million on the original DS. The original DS still managed to sell 5.1 million units in the last year. Nintendo's main console, the Wii, sold 9.84 million units in the last year, with 102.37 million games sold.
Motorola Solutions reports Q1 2012 sales of $2 billion, expects jump in Q2
Motorola Solutions (MSI) -- the less familiar Motorola that makes radios, barcode scanners and such for government and enterprise sectors -- just posted sales of $2 billion for the first quarter of 2012. This is a seven percent boost over Moto's results from the same period last year, and that growth reflects an 11 percent jump in government sales. It wasn't all rosy for Motorola this quarter, though: Profit was down two-thirds to $157 million, and sales to large businesses slipped two percent. MSI (not that MSI) expects second-quarter sales to grow six percent compared to last year's earnings, so it doesn't look like government clients will be dropping those wearable displays any time soon.
ARM reports revenues up 13 percent, bicep-curling profits up 22 percent
UK-based chip designer ARM just announced another booming quarter, with revenue up by 13 percent to $209.4 million. Pre-tax profits were even stronger, growing 22 percent year-over-year to $100 million. Not a bad profit margin by anyone's standards, and due to entirely to the Cambridge outfit's business model, which has seen 22 new processor licenses signed this quarter. That includes everything from the smallest Cortex-M class chips for use in the "Internet of Things" right through to the mini-monster Cortex-A15. There were also two new signings for the Mali graphics core, which is still proving its worth in some of the latest Samsung Galaxy devices. Overall, the number of chips that went into mobile phones and mobile computers remained steady, but the shipment of chips for other types of consumer and embedded devices grew by 15 percent year-on-year, proving that ARM not only has muscle, but also fingers in pies.
