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Money, Money, Money Don’t you just love year-end sales reports? Much of this week’s news has pecuniary overtones as various European game companies reveal how much money they’ve lost or gained. Last year’s biggest winner in the UK seems to have been the UK market itself. Analysts expected that total sales would breach the £1 billion mark by the end of the 1998, and indeed the sales did. Approximately £1.2 billion ($2 billion) in game-related sales occurred in 1998. Of these total sales, £882 million ($1.4 billion) is attributed to software sales and £235 million ($376 million) in hardware. Nintendo vs. Sony. The console market made up 51 percent of overall sales, with Sony alone managing to move 1.8 million PlayStations in 1998, bringing the total installed user base to a whopping 3.75 million. Despite Nintendo’s hopes to the contrary, 1998 wasn’t that company’s year. In fact, hardware sales over the Christmas period were actually down from the same period last year. These poor hardware sales stand in stark contrast to the stellar performance of Nintendo titles such as TUROK, F-1 WORLD GRAND PRIX, and THE LEGEND OF ZELDA: THE OCARINA OF TIME. Nintendo titles are still giving the top PlayStation titles a run for their money in the "All Formats" chart. Indeed, if not for the release of Gremlin’s PREMIER MANAGER ’99, last week Nintendo would have claimed both the number one and two spots in the chart with ROGUE SQUADRON and ZELDA, a feat that would have seemed impossible just a few months ago (even so, Nintendo still only "settled" for the silver and bronze spots). Hilariously, ZELDA’s intermittent stock shortages continue to affect the UK and Europe as a whole. The title completely dropped out of the "Top 40 All Formats" chart two weeks ago, only to shoot back in at number one the following week when new stock arrived. Despite all these problems, Nintendo of Europe boss Hans Stahler is still confident of boosting his 30 percent market share up to 40 or 50 percent in the next 18 months. Although the Dreamcast will be released during this time, Stahler has already dismissed Sega’s last chance as a "freak machine" — apparently because only five titles will launch, in contrast to Nintendo’s "huge" range of games. Eidos Rising? Despite failing to make a profit in previous years, Eidos is now confident that its next quarter results will show a marked rise back into the black. The City certainly seems to believe them, especially after Eidos reported higher than expected results for its Christmas sales — led, of course, by Core’s TOMB RAIDER III. With share prices jumping from 65p to £11.65, City analysts are forecasting yearly profits for the company of £35 million ($58 million), compared to an earlier prediction of £30 million ($49 million). EA is, as usual, the fattest cat in Europe. The company has the largest market share by units and value, beating both Sony and Nintendo, and has made more than £100 million ($165 million) in the UK alone — £111 million ($183 million), to be exact. EA’s total European revenue was up by 39 percent, and in Japan the company managed an even greater 58 percent rise in its fortunes. One can’t help wondering where all this money is coming from. Granted, every single person in the EU seems to buy a copy of the new FIFA game whenever one is released (roughly once a fortnight), but it’s difficult to see what else is being bought in the volumes necessary to make over £100 million. POPULOUS: THE BEGINNING was only a minor hit, and all of the EA Sports non-soccer releases are completely ignored by Europe. How then, is all the money being made? Send your answers on a postcard, please. Creative Financing. Sega has gone to some rather surprising lengths to finance and market the upcoming Dreamcast launch. First, company executives invited nearly 40 City fund managers to London in order to announce a ¥50 billion ($432 million) bond issue which is intended to finance Dreamcast’s European launch. The bonds will be convertible into shares of common stock and have a maturity of four years (which is longer than the Saturn ever lasted). The turnout for the announcement was said to be "healthy," with representatives from such financial institutions as Investco, Threadneedle, Royal London, Prudential, and Schroders. It’s been rumored that the queue to play the Dreamcasts on show was rather longer than the queue for the bonds themselves. Clearly giddy from their association with such big name investment companies, Sega tried to gain a sponsorship deal with Arsenal Football Club. Although the name may mean nothing to most Americans, "The Gunners" are the UK’s third biggest team, and the five-year deal under consideration is rumored to cost in the region of £10 million ($16 million). If the deal does go through — and it is far from certain that it will — then the shirt sponsorship deal will be the most expensive such arrangement in the English Premier League’s history. Covermount War Update. For those curious as to how Covermount War II is going (see the previous issue of Eurospeak), it seems that IDG Media, publishers of the offending PC Games Action magazine that covermounted a complete game with its last issue, is unrepentant. Ian Bloomfield, publisher of PC Games Action, is on record as saying, "We picked a game that is no longer on anyone’s back catalogue. It’s not with the mail order companies, so what market have we taken away?" Regarding future covermounting of previously full-price games Bloomfield says, "We will not use them on a regular basis but we may bob in and out one a year — who knows?" ELSPA and the publishers they represent are still adamant that covermounting complete games in the UK is a capital offense, despite the fact that the practice is common in Germany and other European countries. |
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News
Analysis 
