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AT&T plans to shut down entire 2G network by 2017
AT&T has only just begun the transition away from 2G services with its spectrum refarming in New York City, but it now has a target end date to mark on the calendar: January 1st, 2017. Courtesy of an SEC filing, we know that the carrier hopes that both its GSM voice and EDGE data networks will have gone to the great cell tower in the sky before we're popping the champagne corks about four and a half years from now. The Big Blue Ball expects the transition to be a smooth one, as only 12 percent of its regular subscribers are using 2G-only phones today; if it ever gets bumpy, the company promises to "proactively" steer the holdouts towards 3G and 4G. Don't get too misty-eyed. While the transition will mark the end to what's arguably one of the most definitive chapters in US cellular history, that far-flung date will likely come well after most of us have moved on -- much like the AMPS shutdown, it could be less of a bang and more of a whimper.
EA planning upcoming layoffs, 'completed by September 30, 2012'
EA today confirmed plans to enact a "restructuring" among its employees, resulting in an unnamed number of layoffs companywide. The restructuring is part of EA CEO John Riccitiello's move toward digital – an initiative that aims to alter the composition of EA's staff from one in eight engineers to one in two.The California-based publisher will incur a variety of expenses related to its upcoming plans, to the tune of "approximately $40 million in total costs." Ouch! Making things more painful is the fact that $23 million of that total is planned for "severance and other employee-related costs" – a number that'll be (conveniently) reflected in next year's financials.As recently as a few weeks ago, EA outright denied reports of upcoming layoffs. Those reports put the number at 5 to 10 percent of EA's workforce, or approximately 500 to 1,000 employees. EA corporate rep Jeff Brown told Joystiq that the restructuring "impacts a relatively small number of EA's 9,000 employees." He added, "Most importantly, EA is hiring and we expect to finish the year with more employees, not fewer."Update: During EA's financial call this afternoon, the company got more specific on restructuring numbers. Regardless of layoffs, EA expects to grow its current headcount of approximately 9,200 employees to 9,700 by the end of fiscal 2013 (ending March 31, 2013).
SEC investigating movie studios' dealings with China
Reuters is reporting that regulators have begun a probe of American movie studios and their dealings with Chinese officials. The Security and Exchange Commission has sent letters to at least five companies, including 20th Century Fox, Disney and DreamWorks Animation requesting information about "potential[ly] inappropriate payments" made to members of the Chinese government. The market in the pseudo-Communist nation is seen as one with huge potential for US-made films, but the state-owned China Film Group has placed strict limits on foreign cinema. However, in February, the group agreed to loosen restrictions and exempt up to 14 IMAX or 3D films a year (along with their 2D counterparts) from the 20 movie cap on international media. Around the same time, DreamWorks announced it would be building a production studio in Shanghai with participation from several large Chinese media companies. Even Disney struck a deal that will see the next Iron Man title co-produced by China's DMG Entertainment. The sudden shift in tone must have raised some eyebrows with watchdogs, and the SEC has responded by hitting up the studios for info over the last few months. Obviously, we'll be keeping an eye on this to see how it develops.
Nokia submits yearly SEC report, details €1.4b loss and Windows Phone risks
Nokia submitted its annual report (Form 20-F) to the SEC today, and -- as required of all publicly traded companies -- the information provided a candid overview of its financial health and market risks. Based on its quarterly reports, we've already known it was a rather bleak year for the Finnish outfit, which saw a €1.4b annual loss compared to €1.3b in profit just one year ago. Further, its net sales similarly took it on the chin, which amounted to €38.6b in 2011 versus €42.4b in the previous year. In terms of units sold, Nokia pushed out 339.8m feature phones during the year -- a three percent decline from the 349.2m units sold during 2010. The company attributed the drop to its aggressively priced competitors, as well as its lack of a dual-SIM handset for the first half of the year. Nokia's smartphone segment took an even harder hit, which fell to 77.3m units sold -- a 25 percent drop from the 103.6m devices shipped just one year ago. Once again, the company cites its aggressive competition as the primary factor for the decline, along with a waning interest in the Symbian platform.In its discussion of potential threats to the company's bottom-line, Nokia provides a rather forthright assessment that accurately pegs its future success in the smartphone marketplace upon the acceptance of Windows Phone among developers and consumers. Likewise, its projections to sell 150 million Symbian units is failing to materialize -- big shocker there -- and Nokia now expects demand for its homegrown platform to continue deteriorating. Nonetheless, it remains stalwart in the commitment to support Symbian through 2016 -- though surprisingly, no comment on how this in itself could be a disaster to the company's bottom-line. Should Nokia's smartphone effort fail, that leaves it with the Series 40 feature phone segment, which it characterizes as a low-margin business that may see its demand erode as smartphones reach even lower price points. Nobody ever said that the mobile industry was a bed of roses, but if you'd like to view the world through Nokia's eyes, you're certain to find its commentary (pages 13 - 47 of the source document) an interesting read.
Sprint reveals it spent $15.5 billion to fuel its iPhone hunger
Sprint's SEC filings have revealed that the carrier has committed to purchasing $15.5 billion worth of iPhones as part of the long-promised $20 billion gamble. If each handset costs around $630 at trade, then we're talking about the network holding nearly 24 million units. Given that the company most recently ate a loss of $1.3 billion, most of which was caused by carrier subsidies for the 4S, there's a genuine fear that the company won't be able to make enough back on each customer to offset the initial outlay. Given the Baller-style purchasing decisions of Dan Hesse of late, we'll be watching how this unfolds with great interest and our fingers very firmly crossed.
THQ confirms layoffs of 240 employees [updated]
THQ has confirmed planned layoffs of "up to 240 selling, general and administrative personnel worldwide," with plans to finalize the proceedings by September 30, 2012. The company promises that the "majority" of said layoffs will occur before March 31, 2012 and many of the employees affected have already been notified.The 240 number is a marked increase from numbers we heard earlier today, making the situation at THQ look all the more dire. Today's announcement reflects specific numbers for layoffs that THQ first confirmed last week.Though the company makes note of the recently announced restructuring away from kids and licensed titles, nothing is mentioned of the rumored cancelation of the Warhammer 40K MMO. We expect to hear even more when THQ announces its fiscal third quarter results tomorrow afternoon.Update: THQ tells Joystiq that, "These are the cuts we described in our statement last week. No studios are a part of this. It's administration and publishing offices worldwide." The company declined to comment on whether these layoffs will affect any currently announced projects.Update 2: This post originally stated that THQ would be laying off the 240 employees across nine months, which is inaccurate. Due to varying employment guidelines around the world and internal financial considerations, the restructuring will be completed by September 30, 2012, but most of the affected employees have already been notified.
Apple senior executives get lucrative stock grant
According to a report in the Wall Street Journal, Apple's senior executive team received lucrative stock grants worth US$60 million dollars at current market prices. A Securities and Exchange commission document filed by Apple on Friday details this financial reward. Each executive will receive restricted stock shares that are meant to entice the executives to stay with Apple for the next five years. The grant requires that the executive remain at Apple to claim half of the stocks which will vest in 2013. The second half will vest in 2016. Executives receiving the 150,000 shares include CFO Peter Oppenheimer, general counsel Bruce Sewell, iOS Software VP Scott Forstall, Worldwide Product Marketing VP Phil Schiller, Hardware Engineering VP Bob Mansfied and Operations VP Jeffrey Williams. Senior VP of Internet Software and Services Eddy Cue received 100,000 restricted shares.
Google outbid itself by 33 percent in Motorola Mobility acquisition, SEC filing reveals
Google's acquisition of Motorola Mobility is already starting to lose that new car smell, but a fresh batch of financial details has now emerged, providing deeper insight into how the deal actually went down. According to an SEC filing that Motorola Mobility released yesterday, Google made an initial offer of $30 per share on August 1st, but soon raised that bid to $37 per share on August 9th, after Moto and its advisers asked for $43.50. On that same day, Google again raised its offer to $40 per share, even though Motorola wasn't accepting bids from other firms, for fear that a public auction would jeopardize its sale. This 33 percent increase ultimately added some $3 billion to the pot, bringing the final price tag to $12.5 billion. A Mountain View spokeswoman declined to comment on the negotiations, though its aggressive bidding suggests that the search giant desperately wanted the deal to go through. The documents also reveal that patent-related issues were at the forefront of discussions from the very beginning, when Google's Senior Vice President Andy Rubin met with Motorola Mobility CEO Sanjay Jha to talk about their mutual concerns, way back in July. According to the Wall Street Journal, these talks eventually convinced Jha that his company would be better off under Google's stewardship, amid fears that Moto could get swallowed by the stormy seas of patent litigation -- anxieties that the exec made all too apparent just four days before the merger was announced. You can dig through the full SEC filing at the source link below.
Zynga delaying stock IPO, due to 'rocky stock markets' and SEC questioning
Zynga was all revved up to release the initial public offering of its stock, but has had to delay that plan due to market instability and to answer questions from the SEC, according to The New York Post. The IPO was planned for next month, but the SEC is looking into how the social games company is reporting both its user numbers and revenue, two factors which would obviously greatly influence a stock's performance. Zynga's also citing "the rocky stock markets" as a factor in the delay, which means the IPO will be pushed back to sometime later this year, possibly in November. Zynga also needed some time to post its performance numbers on all of its friends' walls on Facebook, as well as send out Free Mystery Gifts to everyone on the SEC's ruling board.
Fallout Online's future in doubt as Interplay crumbles
Fallout Online and several other Interplay-developed titles may be in serious jeopardy, according to a US Securities and Exchange Commission report filed by Interplay last week. Develop discovered the filing, which spells out dire financial concerns for the immediate future of the company. Multiple times, the report states: "If we do not receive sufficient financing or income we may (i) liquidate assets, (ii) sell the company (iii) seek protection from our creditors including the filing of voluntary bankruptcy or being the subject of involuntary bankruptcy, and/or (iv) continue operations, but incur material harm to our business, operations or financial conditions. These conditions, combined with our historical operating losses and our deficits in stockholders' equity and working capital, raise substantial doubt about our ability to continue as a going concern." Similarly worrying, the company's current cash balance is approximately $3,000 (yes, that's just three thousand dollars, seriously), and it's operating with nearly $2.9 million in debt. The filing also illuminates the company's shift from paying its developers upfront for projects to working on a "net revenue sharing model," where devs get a cut of the final sales rather than paid when their work is complete. While that model sounds hugely profitable for third-party devs, and has been sporadically successful in the movie business, it seems to signal something less than wonderful in Interplay's case. Additionally, the company's credit agreement has ended, which Interplay says "has resulted in a substantial reduction in the cash available to finance our operations." Rather than assure investors that everything will work out, the company again warns of potential negative outcomes, saying instead, "There can be no assurance that we will be able to enter into a new credit agreement or that if we do enter into a new credit agreement, it will be on terms favorable to us." Currently, Interplay has five known projects, ranging from a lawsuit-entangled Fallout MMO to a sparsely detailed Earthworm Jim sequel. Several WiiWare and DSiWare projects are also in the works, though the fate of all five games could be grim given the wording of the company's SEC filing.
Apple Inc. files SEC form 10-K with sales figures
Like every other publicly traded company, Apple Inc. is required to file a form 10-K with the U.S. Securities and Exchange Commission every three months. These typically contain some interesting bits of information that aren't necessarily revealed in press releases. Apple's most recent 10-K chronicles its unit sales and per-unit revenue for its just completed 2010 fiscal year. Apple sold almost 13.7 million Macs in 2010, a 31 percent increase compared to 2009. Interestingly, portables (not including the iPad) accounted for almost two-thirds of that total. Nonetheless, desktops still grew faster than portables with a 45 percent increase to almost 4.7 million units. Unfortunately, Apple doesn't break out sales of specific models, so we're not sure which machines account for the growth. However, it's a safe bet that the huge and gorgeous 27-inch iMac, and perhaps the latest generation mini, accounted for most of the increase. Overall revenue per unit for all Macs (portable and desktop) dropped off a bit from $1,333 last year to $1,279, which points to success for both the mini and the plastic MacBooks. The U.S. market has always been the strongest for Apple, but the increasing popularity of the iPhone and the opening of new retail stores overseas seems to be helping Mac sales, too. Overseas Mac growth outpaced the U.S. in 2010 with Asia-Pacific in particular jumping 62 percent to 1.5 million units while Europe was up 36 percent to almost 3.9 million units. All of these Mac sales, however, are dwarfed by the iPhone and the iPad. Global Sales of the iPhone nearly doubled last year to 40 million units while nearly 7.5 million people picked up the new tablet in its first six months on the market. You can check out all of the details of Apple's 10-K right here. [Via Mac Daily News]
Dell hit by Intel's antitrust aftershocks, prepares for $100 million settlement
Hounded by international antitrust allegations, Intel fired an initial $1.25 billion salvo's worth of settlement last year, but now Chipzilla's biggest distributor of silicon is feeling the heat as well. Dell publicly announced it has set aside a $100 million reserve fund to head off investigations at the pass with a potential settlement of its own. While the company doesn't admit wrongdoing, it recognizes "alleged violations of negligence-based fraud provisions," also known as accepting Intel's controversial chip rebates without reporting them to the government. Dell's actually been under SEC investigation since 2005 for accounting-related transgressions and the company now hopes to tie up all loose ends at once -- here's hoping we see cheaper Core i7-infused laptops whether or not execs pull it off.
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.
Activision CFO Thomas Tippl now COO
Acitvision chief financial officer Thomas Tippl was recently promoted to the position of chief operating officer at the publisher, and will serve double duty as temporary acting CFO while a replacement is found. A filing with the Securities and Exchange Commission from last week detailed the executive swap (titled the "Tippl Amendment," effective as of March 23), including an $885k annual salary, stock options, an annual raise "at least equal to the average [undisclosed] percentage increase" (pending approval by the board), and a yearly performance-based bonus of "120 percent of his base salary [$1,062,000]." The wonderfully candid thing about SEC filings is that there's little room for spin or marketing, but the downside is all the financial jargon -- like the fact that part of Tippl's new contract entitles him to a grant of 225,000 "performance shares" that "vest ratably." This means we're put in a position where we're telling you about stuff that is at the least pretty confusing and likely kind of meaningless. So let's break it down! "Performance shares" are, according to Investopedia, "shares of company stock given to managers only if certain company wide performance criteria are met, such as earnings per share targets." Meaning, in so many words, that Activision has to meet a certain performance level in order for Tippl to earn said shares. That they will "vest ratably" is only to say that on Feb. 15 of each year for the next four years, he will earn part of that eventual 225,000-share goal (in 2014) ... should he stay in his position for all that time, of course. And finally, this is all based on the prediction that he delivers a higher or equal to non-GAAP earning per share when compared to the previous year. In short, he has to either break even or make money to get the stocks, and he has to maintain that for the next four years. Quite a tall order, sir! [Via Edge]
Silver lining: THQ acquires 40 percent of Midway San Diego employees, maybe more
You've been reading an awful lot about Midway business minutiae over the last six months, so we won't bore you with too many unexciting details about THQ buying Midway's San Diego studio for $200k last week. The most important thing for you to know is that out of 100 employees, 40 have been offered jobs by THQ, and more positions may be opening, the Chicago Tribune reports. According to the SEC filing, the TNA iMPACT! license wasn't part of the deal, a strange omission considering THQ publishes UFC games. The deal is all but finalized, awaiting Midway's bankruptcy court's approval and an agreement between THQ and Warner Bros. over the sharing of certain undisclosed IPs (the terms of which have already been settled). Considering the sad tale surrounding the shuttering of Midway Newcastle, we're glad to finally be writing something somewhat positive in the wake of Midway's collapse.[Via Kotaku]
Take-Two settles for $3M over old SEC investigation
Take-Two has agreed to settle for $3 million in a stock-option backdating scheme conducted by the company over a decade ago -- by folks that were punished and haven't been part of the company in years. Take-Two announced years ago that it would pursue the settlement route, accepting the corporate version of pleading "no contest," as the publisher did not admit nor deny the SEC allegations.In fairness, Take-Two appears to be a very different company under the muscled shadow of Strauss Zelnick, compared to the darker days of Paul Eibeler. Think of this whole incident like the time your uncle got really drunk at Christmas and ... well, you know. Point is: the family has moved on and tries not to remember that.[Via Gamespot]
