News

Week of November 15-21, 1999

[Friday, November 19, 1999]

Dreamcast Machine of the Year
Time Digital, the technology spin-off of Time Magazine, has named Sega Dreamcast its Machine of the Year. Computer, audio, and video technologies were all in the running for Machine of the Year honors. Time Digital singled out Dreamcast both for its advanced design as well as for the speed in which it has made its way into American homes. "We at Sega are honored to have Sega Dreamcast hailed as the 'Machine of the Year' by the respected editorial staff at Time Digital,'' said Sega's senior vice president Peter Moore. Dreamcast had early picked a "Best of Whats New" award from Popular Science Magazine.

Kinesoft Files Suit
Austin, Texas, based Kinesoft has filed suit in U.S. District Court in Illinois against SoftBank Holdings and SoftBank Corporation alleging a breach of obligations under a previously agreed settlement. "Several attempts to negotiate a reasonable settle had failed, and we were forced to turn to the courts to seek appropriate remedy," said Kinesoft chairman and CEO Peter Sills. Sills also stressed that SoftBank is a minority investor in Kinesoft and the court action will not affect the company's day to day operations.

Take-Two Signs Austin Powers
Electronic Arts may have locked up James Bond, but the silver screen's other big name spy is signing with Take-Two. New Line Cinema and Take-Two Interactive have entered into a four year deal granting Take-Two exclusive world-wide rights to create interactive software titles based on the Austin Powers characters and films. Take-Two will hand development responsibities for a range of products across all platforms to it's Rockstar Games division. "The development team at Take-Two's Rockstar Games clearly understand the creative possibilities of this franchise and we are looking forward to working with them on what we all hope will be exciting new interactive gaming concepts,'' said New Line marketing co-chaiman Bob Friedman.

The Zone Marks 10 Million Members
Since it's debut in 1996 with 15,000 members and six games, the MSN Gaming Zone has grown to reach its latest milestone of 10 million subscribers and 118 games. The Zone is now the largest multiplayer gaming site on the net, with an average of 50,000 concurrent players worldwide. The Zone has doubled its enrollment in the last year and has added fifty new games, including Asheron's Call.

PC Data's Top 20 Games for October
1 Microsoft Age Of Empires II: Age of Kings Microsoft
2 Deer Hunter III GT Interactive
3 Tom Clancy's Rainbow Six: Rogue Spear Red Storm Entertainment
4 MP Roller Coaster Tycoon Hasbro Interactive
5 Command & Conquer 2: Tiberian Sun Electronic Arts
6 Cabela's Big Game Hunter 3 Activision
7 Tom Clancy's Rainbow Six Gold Edition Red Storm Entertainment
8 Sim City 3000 Electronic Arts
9 Starcraft Havas Interactive
10 Homeworld Havas Interactive
11 Need For Speed 3 Electronic Arts
12 Driver GT Interactive
13 Half-Life Havas Interactive
14 Tonka Search & Rescue Hasbro Interactive
15 Lemmings Paintball Psygnosis
16 Harley Davidson: Race Across America GT Interactive
17 Microsoft Flight Simulator Microsoft
18 Madden NFL 2000 Electronic Arts
19 Sierra Sports: NASCAR Racing III Havas Interactive
20 Warcraft II: Battle.net Edition Havas Interactive

[Thursday, November 18, 1999]

EA Secures 007 Rights
Electronic Arts announced that it has closed a mulit-year deal with MGM that grants EA exclusive worldwide rights to develop, publish, and distribute game titles based on the James Bond character. EA plans a series of Bond games for both console and PC, the first to be based on the current Bond film "The World is Not Enough" for release in 2000. "`It is with great pleasure that we join forces with EA to build the Bond name into a leading game franchise,'' concluded MGM Interactive president David Bishop, "The Bond license is the longest running and most successful, to date, and we are confident that combining the talent and passion between all parties will result in a line of top-quality interactive entertainment titles that stays true to the Bond world.''

Class Action against Mattel
The firm of Kaplan, Kilsheimer & Fox LLP has brought a class action lawsuit against Mattel in relation to Mattel's merger with The Learning Company. The suit, brought on behalf of shareholders, charges that Mattel violated the Securities Exchange Act of 1934 by providing financial information that was false and misleading due to improper accounting and by failing to disclose problems with the financial information. The suit seeks to recover for shareholder the value lost when The Learning Company's true financial state came to light and caused a drop in Mattel's share price.

Burns Leaves Activison
Activision's managing director for Europe and the U.K. will leave his post at the end of the year. John Burns' four-year tenure at Activision saw substantial growth for the company in Europe and record revenues for the second quarter. Burns said that his departure was for personal reasons.

100 New Pokemon
After repeated delays, Nintendo will ship two new versions of the marketing phenomenon Pokemon in Japan on Sunday. Pokemon Silver and Pokemon Gold for Gameboy Color will together add 100 new Pokemon to the existing roster of 151. As of this summer, Nintendo had sold nearly 180 million copies of the Pokemon games worldwide. Nintendo will ship 1.8 million units of the new versions on the first day with an additional 1.2 million to follow in the first two weeks. A Nintendo spokesperson cautioned, ``Although the start will be a bit slower than we originally expected, we will be able to catch up with our goal to ship a total of five million units by the year end, and a total of eight million units by the end of next March.''

AOL Joins ESRB Ratings
Along with commerce partners eToys and Beyond.com, America Online has announced its intention to support the games rating system created by the Entertainment Software Rating Board. AOL has decided that only rated games will be available for play on AOL, and marketing partners selling games on AOL will prominently display the rating of games and will not sell any games which have not been rated. Games carrying an 'Adults Only' rating will not be available for play or for sale. ``Parents need help from business to make sure their kids are playing only those games that are right for them. Today's announcement by AOL is an extremely important contribution to our efforts,'' commented ESRB executive director Arthur Prober. America Online expects all of its partners to be in full compliance by March 2000.

[Wednesday, November 17, 1999]

Nintendo Insists on Dolphin for 2000
Hiroshi Yamauchi, Nintendo's president, maintained in an interview with Yomiuri Shimbun that the next generation Dolphin console will ship in 2000 and will be priced significantly below Sony's Playstation 2. "We would like to release the Dolphin closer to the PS2," said Yamauchi about Dolphin's release date, "we're aiming for the Christmas 2000 shopping season, I don't think the time difference is that big of a handicap." Of the Playstation 2 expected $390 price tag, he said, "Dolphin will not be that expensive."

Earthlink Partners with iEN
Earthlink has teamed up with iEntertainment Network to re-launch its existing Games Arena online gaming area. The new Games Arena will be a co-branded enterprise that will put iENs premium fee games, like Warbirds and Dawn of Aces, in front of Earthilink's more than 1.5 million subscribers. The Games Arena will also be touted heavily in Earthlink's web pages and newsletters. The site will feature multiplayer games, news, and previews. ``Being selected as an entertainment content provider for EarthLink is a huge opportunity,'' said Mike Pearce iEntertainment Network CEO. `` It's a perfect fit for iEntertainment Network."

Creative Celebrates 100 Million with a Dividend
Creative Technology shareholders will receive a dividend for the second year in a row. The company will pay a dividend of $0.25 a share for the fiscal year ending June 30, 2000. Creative recently announced that it had reached the mark of 100 million units shipped in its ten-year history, and that 60% of all PC audio systems use Creative's SoundBlaster technology.

Hasbro Expands NASCAR Deal
Hasbro Sports has expanded on an earlier NASCAR licensing agreement by signing up 29 top drivers. Deals were reached to allow Hasbro to feature the drivers, their teams, and there cars in a range of mass-market NASCAR themed products that the company plans to roll out beginning next year. "Attracting so many of [the drivers] at this stage has hugely added to our plans for 2000 and beyond,'' commented Hasbro Interactive President Tom Dusenberry. Multiyear agreements were reached with Dale Earnhardt, Dale Earnhardt, Jr., Bill Elliott, Jeff Gordon, Bobby Hamilton, Ernie Irvan, Kenny Irwin, Dale Jarrett, Chad Little, Bobby Labonte, Terry Labonte, Kevin Lepage, Sterling Marlin, Mark Martin, Jeremy Mayfield, Joe Nemechek, Steve Park, Adam Petty, John Andretti, Johnny Benson, Jeff Burton, Ward Burton, Kenny Schrader, Mike Skinner, Tony Stewart, Kenny Wallace, Rusty Wallace, and Michael Waltrip. Racing legend Richard Petty is also on Hasbro's roster of NASCAR drivers.

Games Contribute of Physical Rehabilitation
Researchers at the Sister Kenny Institute at Northwest Abbot Hospital in Minnesota have reported encouraging result is using computer games to speed patient rehabilitation. The system uses a bio-feedback device to allow patients to play games by controlling a computer cursor with small muscle contractions. "The system is based on the simple premise that a motivated patient works harder at their therapy, because they have fun and enjoy the immediate feedback and interactivity of the games, "said Krista Coleman, Ph.D., vice president of Research and Development at Enhanced Mobility Technologies.

[Tuesday, November 16, 1999]

GT Sale Details
Infogrames has released details of its GT Interactive takeover. All told, Infogrames will spend $135 million dollars to purchase a combination of common stock, convertible notes, and newly issued shares giving Infogrames control of up to 70% of the outstanding stock. Infogrames appointed Pierre Sissman to the position of president of Infogrames' European operations, allowing Infogrames chairman and founder Bruno Bonnell to actively participate in refocusing GT's activities. "I am really excited about the opportunity we have to re-energize this company, which has so much potential," said Bonnell, "I am confident that Infogrames can drive GTIS back to profitability." Added GT Interactive chairman Tom Heymann, "It is the right move for our company and it opens a new chapter for GT Interactive Software."

Sony at Comdex
Sony used a keynote address at Comdex to outline how Sony plans to use the Playstation 2 to help the world become better networked. The company hopes that the Playstation 2 will speed the adoption of high speed network access in the home, which will then be taken advantage of by Sony's new generation of set-top boxes and Vaio desktop computers. Stated Sony Computer Entertainment of America president Kazuo Hirai, "We believe it is the Playstation2 and its compelling software which will accelerate the deployment of broadband networks into consumers homes." Sony demonstrated the new console, and announced that there are as many as 250 titles being developed for the system in anticipation of its March 2000 Japanese release. Sony also used the Comdex forum to announce a deal to license the Palm OS for use in a series of portable networked devices.

GT Financials
GT Interactive followed up the announcement of its takeover by releasing its second quarter financials. Same quarter revenues were down sharply, from $116.2 million this time last year to $91.4 million this year. Losses for the quarter stretched to $57.1 million. The losses came despite strong sales of titles like Driver, and are attributed largely to a decline in distribution revenues. Losses are expected to continue in the short term as GT looks to reorganize it distribution commitments and focus on its publishing activities.

[Monday, November 15, 1999]

GT Interactive Joins Infogrames
Though an announcement is not expected until sometime Tuesday, MCV is reporting that Infogrames has completed its acquisition of a majority stake in GT Interactive. It is expected that GT will continue to operate as a separate company and will maintain its NASDAQ listing, but details on the consolidation of the company won't be released until the deal is formally approved by the shareholders. Infogrames had earlier picked up publishers Accolade and Gremi, and the GT purchase will add developers like Reflections, Cavedog, and Singletrac to its slate.

Eidos Takes GameFan Stake
Eidos has purchased a nearly 20% stake in Maximum Holdings Inc., the parent company of GameFan Magazine, its affiliated websites, and the GameCave online game seller. Eidos paid $55 million dollars for 19.96% of Maximum's outstanding capital stock. Maximum is expected to use some of this new capital to complete its merger with DVD Express, a web DVD retailer, and Eidos will hold a slightly larger than 10% stake in the joint company. Eidos hopes to use its Maximum's properties to communicate directly with its target demographics and to increase its e-commerce presence. "We have decided that Maximum is the partner which will most effectively realize our objective of combining 'Content, Community and Commerce' in our approach to our target market of 10 to 34 year old game players," explained Eidos CEO Charles Cornwall, "We anticipate our alliance with Maximum will enhance significantly the e-commerce strategies of both companies."

3dfx Unveils Voodoos 4 and 5
3dfx opened the annual Comdex show in Las Vegas by rolling out the two newest members of the Voodoo family. Voodoo 4 and its larger brother the Voodoo 5 will both be powered by 3dfx's VSA-100 chipset, previously known as 'Napalm'. The 'VSA' in the new name refers to Voodoo Scalable Architecture, a feature that allows multiple processors to share the rendering workload. When 3dfx ships the new Voodoos in March of 2000, the difference will be in the number of VSA-100 at work; Voodoo 4 will feature a single chip and be priced at around $180 while the Voodoo 5 will sport four chips and command a $600 price. 3dfx partner Quantum 3D will be utilizing the same technology under the Aalchemy name, offering up to 32 VSA-100 chips on a single board.

Previous Weeks : Week of November 8-14, 1999

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