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HTC quarterly profits improve by a third, beat even its own lofty expectations
We were impressed with HTC back in April when it forecast a record $1.6 billion revenue for itself over the second quarter, but lo and behold, the Taiwanese superphone maker has gone and outdone that with a $1.88 billion income over the period between April and June. Reporting a very solid 33 percent improvement in profits year-on-year -- $268 million versus $202 million 12 months ago -- the company points to strong sales (no doubt catalyzed by Android's growing popularity) as the chief culprit for its newly increased tax bill. Guess that shows that having a wide catalog of high-end devices doesn't preclude raking in the cash, provided they're all desirable enough to garner mind and market share.
US consumers purchase $55 million worth of 3D TVs and Blu-ray players, despite the glasses
It's early days yet, but NPD claims that revenue from US sales of 3D TVs and standalone 3D-capable Blu-ray players has exceeded $55 million in the first three months of availability. Mind you, this steady growth comes despite the absence of some major players. While that number might sound big, it's tiny in comparison to the total number of TVs sold each month in the US and, according to our friend Ross Rubin, executive director of industry analysis at NPD, sales are expected to remain small throughout 2010. Regarding those much maligned 3D glasses, only 10% of those surveyed by NPD cited "looking silly" as a main concern. Instead, the biggest concern was not having enough glasses on hand for everyone looking at the set. A concern driven by cost, undoubtedly, and a dearth of survey participants from New York's trendy Lower East Side. Disclaimer: NPD's Ross Rubin is a contributor to Engadget.
iDevices making up more and more of Apple's revenue
Apple held their latest earnings call this past week, which means we're right in the middle of a flood of analysts' charts and graphs about how well they're doing. This one's extra interesting, though -- we've talked before on this site about Apple's interesting position between its past of PCs and OS X and its apparent future as the "largest mobile device company in the world," but here it is, in bright colorful stripes put together by Silicon Alley Insider: the iPhone, the iPod, and iTunes make up the majority of this company's business, and have for quite a while. This chart only goes back to June of 2007, but notice how the whole thing trends upwards -- at some point here that I'd imagine is sooner than you might think, we'll reach a spot where the iPhone and various Apple iProducts will have made more money than the Mac ever did. Not that Apple is abandoning the Mac at all, and neither are we -- we're still an unofficial Apple weblog, and we're still committed to covering the whole company. But I even noticed this back at Macworld earlier this year -- there's definitely two factions in the Apple audience, one that hearkens back to the old school pre-OS X Mac identity, and another that can't get enough of the iPhone and the iPad (which, you'll notice, is still missing from the chart above) and apps and so on. As time goes on, that iFaction is growing bigger and bigger, both inside of Apple and out.
Apple has another record quarter, posts $3.07b profit
Apple might not be too happy about having a fourth-gen iPhone prototype get stolen, but there's nothing like cold, hard cash to turn a frown upside-down -- and the company certainly made plenty of it in the second quarter of 2010, posting a $3.07b profit on $13.5b in revenue. That's the Apple's best non-holiday quarter ever -- profits were up 90 percent while revenue was up 49 percent -- and yet another record quarter for Steve and the gang. Mac sales were up 33 percent from a year ago with 2.94m units sold, iPhone sales were up 131 percent with 8.75m units sold, and iPod sales were down one point with 10.89m units sold. We're just about to jump on the analyst conference call, we'll let you know if we hear anything good -- we wonder what people might be asking about? Update: Oh, why not -- let's liveblog this thing. Follow along after the break at 5PM ET.
Sega expects profits in fiscal Q4 2010 forecast
Sega recently posted quite the surprise for its investors: a revised earnings forecast. In an interesting turn of events, Sega has foregone the doom and gloom of having to admit it will likely earn less money during its Q4 2010 forecast -- the period between December 2009 and March 2010 -- for something a bit more on the cheery side: profits! First, Sega estimates net sales of ¥380 billion ($4.08 billion), a 9.5 percent decline from its previous estimate of ¥420 billion ($4.51 billion) -- wait, we thought we had good news in here? Aha! Here it is: net income. Sega previously forecast net income of ¥15 billion ($161 million), but has now adjusted that to ¥18 billion ($193 million). This spontaneous spike in cash money is attributed to "improved profit margins in the pachislot and pachinko machine business and amusement machine business." We imagine sales of Bayonetta and Aliens vs Predator also helped. And in case you're wondering what the difference between net sales and net income is: Net sales accounts for the total profits a company makes based on the products it sells, while net income takes into account net sales and other operating costs, such as licensing fees and taxes. [Via GameSpot]
RuneScape sees heavy profits for 2009
Jagex, the company behind long-running MMO RuneScape, is seeing happy faces all around these days. To absolutely nobody's surprise, profits from past years have seen a sharp rise and the latest round of numbers is no exception. RuneScape has been a growing success for Jagex, and Gamesbrief recently took a look at the company's profits for March 2008 - March 2009: "UK studio Jagex [...] generated £38.4 million in revenues ($59.3M) and £18 million in profits ($27.8M) during the March 2008 to March 2009 period." That's a pretty impressive figure, particularly when you take into account how far Jagex has come from £5.2 million ($8M) in revenues and a £2.7 million profit ($4.2M) back in 2004. Jagex definitely has RuneScape to thank for the majority of this, of course. 94% of this most recent round of profits came from RuneScape subscriptions, according to the Gamesbrief report. Considering that the game is free-to-play, the figures are nothing short of impressive. Take a look at Gamesbrief for the full story.
iAds could make a billion dollars, help Google make their deal
There's not a lot of details out about Apple's upcoming mobile advertising program, iAds, quite yet, but Broadpoint Amtech is already convinced it's a moneymaker. Analysts there say that the program could generate a whopping US$4.67 billion in revenue in just one year's time. Of course, that's a high-end guess, but even the medium figures are pretty amazing -- analyst Brian Marshall suggests that even conservatively, Apple could earn $2.48 billion. Realize what we're talking about here: this is more or less a from-scratch profit stream for Apple, and with developers receiving 60% of the revenue from iAds, Apple won't be the only company making money. In fact, Apple's good news may benefit Google, too -- CEO Eric Schmidt said that Apple's iAds announcement should convince those concerned that Google's deal with AdMob is good to go, and that the two companies will just be one big player in "a highly competitive market." Of course, Google has a bit more advertising experience than Apple -- it made most of its $23.7 billion revenue last year from its online advertising model. While iAds sounds big, it's not quite that big. Still, iAds will be big, and there's room to grow -- Apple is starting off with the mobile market, but don't forget that they've got a whole library of iTunes podcasts, and content space on AppleTV to sell as well. At this time next year, we might be reporting that Apple really has created a $2.5 billion-per-year income stream for themselves.
Nintendo accounts for nearly 25% of GameStop's new product purchased in fiscal 2009
Of the many, many games that GameStop sold in 2009 (not to mention the millions of dollars it made), we were left wondering where the lion's share of the game retail juggernaut's capital went in terms of product that the company was actually buying for its stores. And in a recent SEC filing for the last financial year, the company an unsurprising leader: Nintendo took the top spot, with 23 percent of GameStop's "new product purchases" in fiscal year 2009. Sony trailed in second place by only five less points at 17 percent, while MIcrosoft, EA, and Activision picked up 12, 12, and 11 percent (respectively). The remaining 25 percent presumably belongs to various third party peripherals and game-related items available for sale in the retail chain's stores. That said, while over 41 percent of GameStop's sales come from new products (read: from the vendors listed above) over the 26 percent coming from used game sales, the vast majority of revenue is still very much coming from used game sales, and thusly, the company's number one vendor: you.
Google cutting in Android carriers, manufacturers on ad revenue? (update: not according to Google)
Free, ad-supported phones have long been a rumored endgame for Android, but the way that model ends up playing out may not happen the way everyone thought. mocoNews is citing "multiple sources who are familiar with the deals" in saying that Google has been sweetening the pot for both manufacturers and carriers of Android devices by tossing in a cut of the ad revenue generated from their services -- search, Maps, and the like. This would certainly explain Android's stratospheric rise through the ranks in carriers' lineups around the globe, and -- more importantly for consumers -- gives them more wiggle room to slap huge subsidies on handsets (assuming the trickle-down economic effect kicks in at all). For competitors, Google offers a unique value proposition here that can't really be met by anyone except perhaps Microsoft -- and with Redmond looking to reestablish its relevance in the mobile space this year more than any other in recent memory, we could definitely see the two sparring to line Verizon's and AT&T's pockets with the most green. Naturally, all the parties involved have clammed up -- no one's saying a peep about whether this is true, or to what extent -- but we certainly wouldn't be surprised. Update: Google pinged us refuting this report, and even gave us a statement to match (in relation to the source material), which is as follows: The article is not true. We share revenue on search, not on mobile applications. The same is true for non-Android devices that use Google as the default search engine.
Apple increases gaming share at the expense of DS and PSP
Apple's intentions to dominate handheld gaming were already pretty clear back in March of 2008 as game studio after game studio lined up behind the iPhone (and iPod touch by extension). Now look at the graphics above. Yeah, based on the report from Flurry Analytics, Apple's casual gaming approach is carving out a nice slice of the US revenue pie related to gaming software. The PSP was hit especially hard dropping from a 20% share in 2008 to just 11% of US revenue last year. Numbers that highlight just how ridiculous John Koller's spin maneuver was after the iPad launch. Speaking of which, you have to wonder how these numbers might be affected once developers have a chance to spread out on the iPad, looming Nintendo 3DS or not. Especially with early data showing robust pre-sales and games accounting for almost half of the iPad apps being tested. See that chart after the break. Mmm, pie.
PC gaming revenue grew in 2009 as retail PC game sales shrank
[Logitech PC accessories] Despite fears about the languishing PC game industry, revenue seems to have grown a bit in 2009. According to PC Gaming Alliance's Horizons Report, revenue hit $13.1 billion in 2009, versus $11 billion in 2008. Don't expect that growth to translate to increased shelf space for PC games, however. The report notes that digital distribution sales are way up, as are the sales of virtual items. "In 2009 we saw North America and Europe experience a rapid uptake in purchasing virtual items," PCGA president Randy Stude said. "This model is what drove growth in Asia and we think it is just starting to come to Western markets." As expected, given the rise in digital distribution, packaged game sales have dropped for a second year, now accounting for just 20 percent of PC game revenue. It appears that PC games are going to go all digital unless we start seeing some really awesome cloth maps.
Activision report lists World of Warcraft as a 'risk factor'
If there's anything that all the chaos between Activision and Infinity Ward in the past 24 hours has taught us, it's that no one is safe and dry under Bobby Kotick's umbrella. And while Call of Duty: Modern Warfare was one of Activision's biggest earners, that hasn't stopped the company from revamping the brand however it sees fit. So what about Activision's other big game, Blizzard's World of Warcraft? The same annual report released to the SEC yesterday that kicked off the Infinity Ward shakeup also mentions that Activision is worried about WoW becoming "obsolete," and that the regulatory issues in China could affect the entire company's bottom line. So will we hear about Mike Morhaime being frogmarched off of the Blizzard campus? Not likely -- the fears about WoW are all in a section of the report labeled "Risk Factors," in which a company must disclose anything that could possibly go wrong with its financials in the future, just in case. In there, Activision worries about everything from credit card fraud to its ESRB ratings -- WoW is mentioned a lot because it makes up most of the revenue (in fact, one of the worries is that Activision depends on WoW too much), but these are all worst case scenario guesses. The report admits that Blizzard did decrease its net revenues last year, but then credits that to no new releases in 2009 and interrupted licensing fees from China. Assuming Blizzard releases both Starcraft II and Cataclysm as planned in 2010, the odds are low that Activision will raise the axe in that direction.
Turbine makes more money by giving its MMO away for free
Here's a story that you're probably going to see a lot over the next few years: A company started giving away its game for free, and now reports that it's making more money than before. That's what happened to Turbine, maker of the Dungeons and Dragons Online MMO. Last year, it decided to move from a subscription model to free-to-play, instead earning its revenue off of in-game transactions, and now it's announced that income has increased by 500% and the game is making more money than ever. DDO is sort of a special case here -- the game was already developed for a subscription model, so the content might be a little more in-depth (not to mention officially licensed) than you'd find on most free-to-play properties. And since the game still does offer subscription plans, the number of subscribers has actually doubled since the changeover (there's no information about whether more money is being made from selling in-game items or from new players who have decided to subscribe). But you can be sure other game developers are closely watching this model, and it's not a stretch to think that, in the next few years, we'll see many more publishers -- of MMOs and otherwise -- try to pull off the paradox of making more money by giving their games away for free.
EA loses $82 million in fiscal Q3 2010, revenue down 25%
Right off the bat, you should know this: for EA, losing $82 million in the third quarter of a fiscal year is an enormous improvement. Compared to the same period last year ("Q3" for EA is October 1 – December 31), the company lost 559 million fewer actual physical dollars. Yes, really. Now that we've told you that, we should also note that the publisher pulled in 24.85 percent less revenue year over year (down to $1.243 billion in Q3 2010 from $1.654 billion in Q3 2009). That said, Playfish had "two of the top ten Facebook games" for the quarter! Good thing EA spent $300 million on those folks, eh? Okay, okay, real talk: the company also points out that it was the "#1 packaged goods publisher in North America and Europe" for its entire fiscal year. CEO John Riccitiello even notes that Mass Effect 2 is "the first blockbuster of 2010." And hey, with 2 million units already shipped, we tend to agree.
Gameloft revenues increase 11% in 2009, 122 million (mostly) digital dollars made
Yep, it says it all right there in the headline, folks. Gameloft swiftly took $122 million from consumers in 2009, roughly equating to 15 million digital copies of DSiWare Oregon Trail. Alright, alright, the digital distribution-based publishers probably sold some of its other games too, we guess -- mobile games (in general) represented a whopping 94 percent of the company's sales in 2009. And despite our voracious habit for mobile games here at Joystiq, North Americans were second place in terms of worldwide sales at 32 percent, with Europeans leading at 39 percent and the rest of the world trailing at 27 percent. Good luck catching up, rest of the world! And yes, even amidst the global economic recession, Gameloft predicted "further growth in 2010 in terms of revenue and profitability." The publisher also pointed out its strong position in the long term, saying it will "benefit from the rapid emergence of digitally distributed video games on mobile phones, tablets, consoles, and from major technological innovations." You catch that tablet reference in there? Yeah, we did too. Hey, it's 2010, right? The future. We're in it.
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.
Verizon lost $653 million last quarter in spite of increasing revenues
91.2 million total customers, 2.2 million of whom joined in Q4, $27.1 billion operating revenue in the quarter, and you still make a loss? Well, in fact Verizon made a tidy profit, which may be considered comparable to Google and Intel's latest results, but its culling of jobs at the end of last year cost it a whopping $3 billion (presumably in redundancy settlements). Still, the company looks buoyant with that quarterly revenue number growing by 9.9 percent year-on-year, and CEO Ivan Seidenberg noting that significant costs were incurred in setting up for a 4G network deployment in 2010. Our favorite nugget of info? The "cash expense per customer" per month number: $27.62, which presumably includes Droid subsidies and the like. How does that compare to what you're giving VZW each month? [Thanks, Josta]
Amazon Kindle moves to App Store's 70/30 revenue split
Most of the rumors coming out about next week's event say that there'll be a tablet with a lot of similarities to the popular Amazon Kindle device, but even before Apple takes the stage, Amazon is taking one of the new ideas for its own. The online retail powerhouse announced that it is adapting a payment model for content providers that's very similar to the App Store, with a 70/30 split on pay sharing. There are a few limitations (there's still a cost for delivery, and the publisher has to conform to a number of price, feature, and location standards), but essentially, Amazon is taking the exact same model that has worked so well for both Apple and its development partners, and bringing it to the Kindle platform. The timing is interesting -- with Apple just about to release what many expect to be a Kindle competitor, you have to wonder what Jeff Bezos is thinking. You have to wonder what Apple will do, too: while there are certainly all kinds of other things the theoretical tablet can do, it's possible that, if they are as close as some people think, Apple and Amazon will end up competing over content delivery, and one or the other may have to change its royalty offerings in order to attract more premium content. That's all a ways down the line, of course -- first, Apple needs to announce the tablet, and then we have to see what happens in terms of releasing content for it. But there's no question Amazon and other companies are watching Apple's plans in the App Store, and it'll be interesting to see what comes next.
Amazon to start paying 70 percent royalties on Kindle books that play by its rules
Sure, you know how much you pay for a book on your Kindle, but do you know how much an author gets from that sale? For most it's probably some meager single-digit percentage, with the publisher taking the rest of the roughly 35% of revenue Amazon doles out. The remaining 65% goes straight into the site's coffers, but that's about to change. On June 30, Amazon is launching a new option in its Digital Text Platform (DTP) publishing scheme that would give authors and publishers 70% of the revenue, with Amazon taking just 30% -- effectively flipping the ratio on its head. The catch? There are plenty: Distribution costs are now paid by the publisher, but that should be on average a few cents per book. These books must sell for between $2.99 and $9.99 and must be priced at least 20% lower than a comparable physical copy of the book. (This is good news for readers, putting a greater incentive for lower-priced digital volumes.) The book must support the "broad set" of Kindle features, including text-to-speech. This will only be available for books that are in-copyright and only for those sold in the US. This is an obvious reaction to the competition from places like Scribd, which pays publishers 80%, and publisher-friendly upstarts like Skiff, but it's also an interesting push to force more books to enable Kindle's text-to-speech. That is currently something of a sore spot amongst those who provide the content, so while we're sure authors will love the extra money coming here, we're wondering whether their publishers will take it given the possible loss of lucrative audiobook revenue. Will this help Amazon in the upcoming war of the e-readers, or will it hurt? We can't wait to find out.
Plummeting PS2 and PSP sales shrunk Sony's market share in 2009
For many, 2009 was the year Sony started turning things around: the PS3 finally dropped to an affordable price with an ad campaign that didn't give children nightmares. However, Gamasutra's Matt Matthews points out that in terms of revenue, 2009 is one of the worst years for the company. Whereas Sony was able to generate $6.4 billion in revenue from its family of PlayStation products in 2008, the company was only able to rake in $5.1 billion in 2009 -- that's a drop of $1.3 billion, or 20 percent. While Microsoft and Nintendo also shed some revenue in the difficult economic climate, their losses seem insignificant in comparison: about $200 million each. Matthews notes that a large portion of Sony's lost revenue in 2009 comes from sagging sales of its decade-old PS2 platform. The (understandable) lack of software sales on the PS2 resulted in the loss of approximately $700 million in revenue, while hardware sales have contracted another $150 million. The PSP also had a difficult year, and it appears the PSP Go hasn't turned around Sony's fortunes. According to Gamasutra's analysis, hardware and software sales on Sony's handheld shrank by about $425 million in 2009. With the demise of the PS2, and the languishing state of the PSP, Sony's former dominance of the market seems but a memory.
