News

Week of January 31- February 5, 2000

[Friday, February 4, 2000]

3dfx Streamlining
As part an aggressive program to return to profitability, 3dfx Interactive has announced that approval of a plan to spin off its Specialized Technologies Group and an overall workforce reduction of 20 percent. The company will spin of the STG group, which focuses on commercial multi-channel video and display, will be spun off within the next 90 day and will account for some the 20 percent workforce reduction. Additional reductions will come from layoffs and attrition in redundant areas. Most affected will be 3dfx's administration, operations, sales, and software support departments. "These are the first steps towards our number one goal of returning to profitability as a company,'' said 3dfx CEO Alex Leupp, "Our revised focus on core competencies and productivity, coupled with a reduction in expenses and operational costs positively positions us for our new fiscal year." One notable departure is the retirement of Bill Ogle from his position as executive vice president and vice chairman of 3dfx's board of directors. Ogle joined 3dfx as part of the company's 1999 merger with STB Systems, which Ogle co-founded in 1981.

Mattel Resignation
Mattel CEO Jill Barad has resigned after failing to stem the fall of sales and profits. Barad announced her resignation after Mattel announced its fourth quarter losses. The company posted a net loss of $18.4 million on sales of $1.77 billion. Mattel had a net profit of $86.7 million on sales of $1.82 billion in the same period last year. Barad took the top job at Mattel in 1997, and oversaw Mattel's struggle with last years $3.5 billion acquisition of the Learning Company. Mattel board members William Rollnick and Ronald Loeb will take on the roles of acting chairman and acting chief executive while the company searches for the new CEO.

DirectX Voices
Microsoft announced that DirectX 8 will support real-time voice technology. The company will utilize the an adapted form of the Battlefield Communicator real-time voice technology it acquired when it bought out Shadow Factor, the technologies developer, in June of last year. The application will get a new name, Direct Play Voice, as part of its integration into the Direct Play API. Shadow Factor has been selling the Battle Com voice application through its website since 1997. Microsoft will make it available as a free download until DirectX 8 appears sometime this summer.

Quebec Gets Concessions
The Province of Quebec is withdrawing its threat to sue Sony and Nintendo for not marketing games in French to Quebec's 6.4 million francophones. The Quebec government came to an agreement with the companies in which both pledged to offer videogame users guides and product warranty information in French. No compliance date has been set, and the government will now attempt to find a similar settlement with Sega. "This is the least we can expect," said Quebec Language Minister Louise Beaudoin.

[Thursday, February 3, 2000]

Sony Consolidates
In preparation for the upcoming Playstation 2 launch, Sony Computer Entertainment of America is making moves to consolidate it operations. SCEA will merge spin off developer and publisher 989 Studios into Sony Computer Entertainment America. Kelly Flock is due to step down as 989's president on April 1, and leadership of the studio will fall to SCEA's management team with Kazuo Hirai as president and CEO of the entire North American operation. In addition, Shuhei Yoshida will join the merged organization as vice president of product development.

Activision's Third Quarter
Net revenues in Activision's third quarter rose a robust 39 percent, increasing to $268.9 million versus $193.5 million in the same period one year ago. Net income increased to $22.3 million against $15.7 million in the third quarter of last year. Strong sales of Toy Story 2 and Quake III Arena led Activision's publishing revenues up 89% for the quarter. The results mark the best third quarter in Activision's history. "Our record revenues and earnings for the quarter can be attributed to our strategy to focus on branded products with proven audience appeal and leverage these brands across multiple platforms," said Activision CEO Robert Kotick, "our year-to-date net income grew 91% and operating margins increased 102%."

Kids Games on the Web
Children's video game publisher New Kid Co. is joining with web application provider to create a new company dedicated to delivering children's game content on the web. The company, to be called Newkidgames.com plan to develop a game site and portal targeted at kids under 12. The site will offer 3D single and multiplayer games as well as offer child safe products and advertising. "In the U.S. alone, there are approximately 43 million children in the under 12 year old marketplace. Analyst projections are that this age group's use of the Internet will grow from the current 25% in 1999 to over 50% by 2003," said New Kid Co. CEO Richard Rabins. Newkidsgames.com is expected to launch in the second half of the year.

Playstation.com Partners
Sony's hardware and software sales website, Playstation.com, has signed on a few partners. A group of 11 companies, including Namco, Square, and Konami, will take an expected 20 percent stake in the company when it launches on February 18. Sony Computer Entertainment will hold the remaining 80 percent of Playstation.com. Among other partners is Seven-Eleven Japan, giving Sony sales access at Seven-Elevens 8,000 retail locations in Japan. Playstation.com was set up with initial capital of $4.4 million.

[Wednesday, February 2, 2000]

Wireless iEN
Indiqu and iEntertainment Network are partnering to bring iEN's game properties to wireless platforms. The iEN games will become part of Indiqu's Qu Vox wireless game system, a wireless OEM games platform that allows network operators to quickly deliver games and entertainment to subscribers. "This alliance delivers critical games development expertise and the compelling content necessary for Qu Vox to define the future of mobile games on wireless devices," said Indiqu's James Newcomb. The system enters beta trials this month in North America and Europe, and will be widely available later this year.

Platinum Stunt
As part of an effort to draw attention to it's new line of budget game titles, dubbed the Platinum Series, Eidos will subject model Lara Weller to coat of metallic platinum paint. Weller is the model who portrays Tomb Raider star Lara Croft, and the coat of paint is Eidos' way of letting the public know that Tomb Raider will be part of the new under $20 pricing scheme. The painting will take place as part of a live web cast on Thursday, February 3 at 12:30 GMT.

At Work Gaming
A study commissioned by online game provider pogo.com reveals that 21 percent of employees nationwide are using company time and equipment to play games at work. Gaming ranked as the second most popular at work diversion, with web surfing taking the top spot. Male employee were more likely than women to blow time gaming, while the under 25 crowd play more than their older counterparts. Better than 17 percent of the workers who admitted to playing games on the job said that they spent from three to four hours each playing each day.

PC Data's Top Ten
PC Data has released its list of top ten best selling PC games for the week of January 16-22.

1. Who Wants To Be A Millionaire, Disney
2. Centipede, Hasbro Interactive
3. Parker Brothers Classic Card Games, Hasbro Interactive
4. Milton Bradley Classic Games, Hasbro Interactive
5. MP Roller Coaster Tycoon, Hasbro Interactive
6. Microsoft Age of Empires II: Age Of Kings, Microsoft
7. Quake III Arena, Activision
8. MP Roller Coaster Tycoon Corkscrew Follies, Hasbro Interactive
9. Deer Hunter III, GT Interactive
10. Hoyle Board Games 2000, Havas Interactive

[Tuesday, February 1, 2000]

S3 Revenue
S3 has reported that the fourth quarter brought revenues of $180.5 million, while revenues for the entire year amounted to $352.6 million. The revenue results translate to a fourth quarter loss of $6.9 million, compared to a loss of $70.3 million in the same period last year, and a loss of $30.8 million for the year, a rosy result compared to losses of $113.2 million in 1998. "This sector showed sequential quarterly revenue growth of approximately 46 percent," said S3 CEO Ken Potashner. While S3's made gains in its graphics business, the company's turnaround continues to be led by Internet appliances, a direction that S3 is keen to pursue. "Although we continue to make gains in our graphics business, we believe that our growth businesses focusing on Internet appliances and home networking have significant unrealized value," said Potasher. S3 also announced that it had finalized its purchase of Number Nine Visual Technology.

Interplay Licenses Lithtech
Monolith's newly created technology division, Lithtech Inc., has signed up its first new customer. Lithtech announced that Interplay's Black Isle Studios, primary a maker of role-playing games, would license the Lithtech 3D engine for upcoming projects. "In researching all the available 3D Engine technology out there, we were very impressed with both the support and advanced feature set of the Lithtech engine," said Black Isle Director Feargus Urquhart.

Midway Fourth
Midway Entertainment has moved up a slot to take the number four position in overall game sales in the United States. The NPD Group data ranked companies on the basis of actual unit sales in a representative sample for the entire calendar year of 1999. Midway grabbed the fourth spot behind industry giants Nintendo, Electronic Arts, and Sony Computer Entetainment. Midway was ranked fifth on last year's list. In addition to being the fourth largest seller of games, Midway was also ranked second in third party publishing.

[Monday, January 31, 2000]

Davies Leave Digital Anvil
Digital Anvil has announced that Marten Davies, president of the company, will leave the firm on February first. Digital Anvil had originally envisioned itself as an independent publisher, but consolidation in the industry led the company to pursue development and left Davies with a less obvious place in the companies plans. "I have enjoyed the challenge of assisting the company in laying the foundation stones for its current and future success. I have, however, decided that at this time I am unable to bring anymore immediate value to the equation," said Davies of his decision. Digital Anvil's founder and chairman, Chris Roberts, said that the company would not name a successor, rather it will divide Davies' responsibilities amongst others in the firms executive team.

Lucas Arts Supports Dreamcast
Star Wars: Episode 1 Racer will be the first of several Lucas Arts destined for the Sega Dreamcast. The company will ship an enhanced version of the racing title in the spring of 2000, with support for Sega's Dreamcast Network. Other titles have not been announced, but Lucas Arts says it plans to continue its support for the platform. "There are more exciting titles to come from Lucas Arts and we look forward to supporting Sega's continued success in the videogame console market," said Mary Bihr, Lucas Arts vice president of world wide sales.

Creative Gets More 3D Labs
Creative Technologies will increase its shareholdings in 3D Labs, according to a statement released by the two companies. Creative, which has held a stake in 3D Labs since 1994, will increase its holding by issuing a five-year convertible subordinate note for the amount of $7.5 million. "When we first established our relationship with Creative six years ago, we were impressed with their far-ranging vision. We are pleased with this increased investment which will help leverage our intellectual property in emerging Internet applications," said 3D Labs President and CEO Osman Kent. Creative's holds approximately 1.8 million shares of 3D Labs.

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