News

Week of January 10- January 16, 2000

[Friday, January 14, 2000]

Intel Profits Increase
Higher prices and stronger demand led Intel's fourth quarter profits to levels higher than the company had predicted. Excluding charges related to acquisitions, Intel's fourth quarter earnings were up 15 percent to $2.4 billion. Revenues increased eight percent to $8.2 billion. The company also reported that income for the entire year of 1999 was up 21 percent from the previous year, increasing from $6.1 billion to $7.3 billion. Intel says that in 2000 it will increase spending on research and development and invest in new production equipment instead of building new fabrication facilities.

Sorenson Leaves Lucas
Jack Sorenson has stepped down as president of Lucas Arts Entertainment. Sorenson made the announcement late Thursday but did not specify what his future plans would be, saying only that he would take some time to work through his opportunities. The Lucas Arts board has promoted Simon Jeffery from his role of product development director to replace Sorensen as president. Jeffery joined Lucas Arts in 1998 to help expand the company's international business. "Former president Sorensen shaped the company's strategic direction, and I credit him with building LucasArts into one of the world's leading developers and publishers of interactive entertainment software," said Lucas Arts Board Chairman George Lucas. Sorensen's resignation follows closely on the heels of other high profile departures from the company, such as Tim Schafer and Aric Wilmunder. The Lucas Arts board also appointed May Bihir to the newly created position of vice president of worldwide sales and named Lucas Film executive vice president Micheline Chau as lead director of the Lucas Arts board.

Sony Triumph
Sony Computer Entertainment of America reports that the Playstation juggernaut beat the company's holiday sales predictions by a whopping 50 percent. According to the company's own figures, Playstation as a whole generated $1.5 billion in retail sales over the holiday period, a good bit above the forecast of $1 billion that Sony had made in November. Sony says that 3 million Playstations were sold between November 1 and December 31, pushing the console's North American installed base of 25 million units. "We have made considerable strides towards achieving our vision for PlayStation by delivering the broadest gaming audience in history." said Sony America President and COO Kaz Hirai.

PC Data's Consoe Top Ten
PC Data has released another top ten list, this time noting the best selling console titles for the month of Decemeber.

1.Donkey Kong 64, Nintendo Nintendo 64
2. Pokemon Yellow, Nintendo Game Boy
3. Gran Turismo 2, Sony Playstation
4. Tony Hawk's Pro Skater, Activision Playstation
5. Gran Turismo, Sony Playstation
6. Pokemon Red, Nintendo Game Boy
7. Pokemon Blue, Nintendo Game Boy
8. Resident Evil 3: Nemesis, Capcom Playstation
9. Tomorrow Never Dies, Electronic Arts Playstation
10. Spyro the Dragon, Sony Playstation

[Thursday, January 13, 2000]

ATI Profits Rage
Strong product demand led ATI's first quarter sales to a record $413.5 million, an increase of 26 percent from the same period last year. Net income for the quarter, though, was offset by increase operating costs related to the company's expanded product line and marketing program and rose only 5 percent to $53 million. ATI's operating costs for the first quarter increased by 43 percent from the previous year. "ATI approaches a bright future with growth prospects not only in our traditional PC business, but in new and burgeoning markets like consumer electronics appliances," said K.Y. Ho, ATI's president and CEO.

Sosa Slugs for 3DO
Baseball's 1999 Man of the Year, Sammy Sosa of the Chicago Cubs, has agreed to an exclusive multiyear licensing deal with The 3DO Company. Sosa will be involved with both the marketing and the development of 3DO's Sammy Sosa High Heat Baseball franchise. "The baseball video game I endorse has to play and look like the real thing. High Heat Baseball captures Major League Baseball perfectly," said Sosa.

Gameplay.com Soars
Shares of online game source Gameplay.com rose sharply on news of two new partnerships. The company followed the announcement of an earlier deal to provided a games channel for the website of Britain's Cable and Wireless Communications with the announcement of a deal to provide an e-commerce game shop for British Telecommunications. Gameplay, created by the merger of mail order game retailer Interactive and BT's Wireplay, can now be reached by Internet, telephone, interactive TV, and cable. "We are now available on whatever platform a customer may happen to own," said Gameplay COO Collin Duffy, "Our next steps will expand operations into Germany and France in the near future. There will be further acquisitions and development of a European wide company."

Microsoft Split
Reports from the Associate Press suggest that the Justice Department is leaning towards a settlement based on the splitting software giant Microsoft into three separate parts. The report goes on to say that sources close to the government's antitrust trial believe that any lesser sanction would be inadequate to effectively limit Microsoft's influence on the industry. It is not clear how the government envision dividing the company, and a federal judge as well as the 19 state attorneys general would have to sign off on any such plans.

[Wednesday, January 12, 2000]

Acclaim Financials
Though first quarter revenues dipped only slightly, to $101.2 million for the first quarter against $104.8 million for the same period last year, Acclaim's earnings took a major hit. The company has reported that it's first quarter earnings slipped to just $0.4 million from a more robust $10.3 million for the first quarter of last year. The company indentified several potentials causes, including slumping N64 sales and the shifting of some product launches to the second quarter. Not least among Acclaim's financial woes is the $6 million spent on extending its hold on the World Wrestling Federation license through November. "We have expanded our release schedule and reduced our dependence on N64," said Acclaim CEO Greg Fischbach, "we have the financial resources, including $78 million in cash on the balance sheet that will allow us to be a leading publisher for each of the next generation consoles."

E3 Registration
This year's theme may be "Beyond Imagination", but it not you high school's homecoming dance. It is, in fact, the annual Electronic Entertainment Expo and the theme is meant to give attendees a taste of the future of interactive. E3 will return to the Los Angeles Convention Center with an expo from May 11 to May 13, the accompanying conference will run from May 10 to May 12. Online registration for the industry only event is open now and will continue until April 13. E3 organizers have not announced a theme song.

PC Data's Top Ten Games
There is finally a new king at the top of PC Data's list of top selling PC games. The list for the post holiday week of December 26 to January 1 has Roller Coaster Tycoon 2 sending Regis Philbin and Who Want's to be a MIllionaire? to defeat at number two.

1. MP Roller Coaster Tycoon, Hasbro Interactive
2. Who Wants To Be A Millionaire, Disney
3. Microsoft Age of Empires II: Age Of Kings, Microsoft
4. MP Roller Coaster Tycoon Corkscrew Follies, Hasbro Interactive
5. Quake III Arena, Activision
6. Tom Clancy's Rainbow Six Gold Edition, Red Storm
7. Tom Clancy's Rainbow Six: Rogue Spear, Red Storm
8. Deer Hunter III, GT Interactive
9. Command & Conquer 2: Tiberian Sun, Electronic Arts
10. Half-Life, Havas Interactive

[Tuesday, January 11, 2000]

Red Storm Revenue
Red Storm Entertainment has reported that revenues from worldwide sales for 1999 totaled better than $60 million, an impressive increase of 400 percent from last years results. The record results continue the company's upward trend. Red Storm's first year of operation in 1997 brought in revenues of just over $2 million, and 1998 saw Tom Clancy's Rainbow Six lead revenues to $16 million. Red Storm President Doug Littlejohns sees big things in the in future, "our performance continues to exceed even our plan for rapid expansion to become a major force in worldwide publishing."

Dreamcast Hits 1.5 Million
Sega's little bundle of joy is growing up even faster than its parents anticipated. The console has now shipped 1.5 million units in North America since its launch on September 9. Dreamcast hit this latest performance mark on December 24, just in time for Christmas. The new milestone came three months ahead of company predictions, and just thirty day after the console passed the one million bar. "By selling an additional 500,000 consoles in a month, the Dreamcast install base has reached the one and a half million units mark; that is a true testament to the quality and longevity of this product," said Sega of America sales VP Chris Gilbert. Sales in Europe, where the console shipped on October 14, have totaled 650,000 units.

S3 Adds Staff
In a continuing effort to be seen as name brand in multimedia products, chip maker S3 has added two new players to global management team. The company has named Steve Kennedy as senior VP of world wide sales and marketing and Claude Barathon as president of international operations. Kennedy joins S3 from Quantum Corporation where he was most recently executive vice president of worldwide sales and corporate marketing. Barathon come to S3 from Maxwell Technologies. "We have added two tremendously talented and proven executives to our global management team, Claude and Steve will be a driving force in S3's continued expansion into high-growth consumer markets," said S3 CEO Ken Potashner.

[Monday, January 10, 2000]

AOL Buys Time Warner
Online giant AOL picked up the world's largest media company for the comparative reasonable sum of $190 billion. America Online will hold a 55 percent stake in the new $350 billion conglomeratea merged company with fingers in nearly every media pie. The deal grants AOL access to all of Time Warner's brands, including CNN, Looney Tunes, HBO, and Time, as well as the chance to offer AOL services to Time Warner Cable's 20 million customers. The merger is subject to closing conditions, not least of which is shareholder approval, and is expected to be complete by the end of the year. Time Warner and America Online are going ahead with a series of new partnerships in anticipation, one of which is the offering of AOL services to subscribers of Time Warner's Road Runner high speed internet service.

Disney Sues 3Com
3Com Corporation has reported that the Walt Disney Company has filed suit against it in Los Angeles County court alleging breach of contract. The suit, filed on behalf of Disney game division Disney Interactive, accuses 3Com of breaking a contract to bundle Disney developed video products with 3Com modems. Disney is seeking in excess of $15 million in damages. 3Com promises to vigorously defend itself. Disney has not commented on the legal action, and a trial date has not been set.

Imagine Launches Free Magazine
Teaming up with many of the industry's biggest game retailers, Imagine Media has launched it's most mainstream videogame publication yet. The magazine, called Game Insider, will publish ten times each year and with a focus on reviews, tips, and previews crafted for casual gamers and parents. By distributing the magazine for free at over 12,000 retail locations of partners Blockbuster, CompUSA, Toys-R-Us, Babbages, Etc., KB Toys, and Kmart, Imagine Media reports that Game Insider will launch with a circulation of 2,000,000.

Drug Stores Grab Games
The previously untapped game selling potential of mass-market drug stores is now being exploited. Value priced software distributor eGames has announced that initial orders from chain retailers including Walgreens, Eckerd, and Rite Aid have reached an impressive $3 million. The company plans to continue to focus on selling its slate of family and value priced games in non-traditional channels like food and drug stores, to that end appointing John Ciotola to head up a dedicated Food and Drug sales division.

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