|
 News
Week
of April 3-April 9, 2000
[Friday,
April 7, 2000]
Activision
Cans Expert
Though the company is expecting strong revenue and earnings growth in
it's 2000 fiscal year, Activision is planning to take aggressive restructuring
steps. As part of it's reorganization, Activision is folding budget games
subsidiary Expert Software into it's other value line maker, Head Games.
The consolidation will result in the cancellation of all of Expert's ongoing
projects as well as the termination of it's entire workforce and the closure
of Expert's Miami headquarters. Activision is also looking to discontinue
non-core product lines that lack online or next-generation console potential.
Activision will see approximately $66 million in pre-tax charges related
to the restructuring.
VIA
To Pick Up S3
Taiwanese chipset maker VIA Technologies is set to buy S3's graphics chip
division. S3 announced it's search for a buyer for it's graphics business
last week, and was said to be evaluating offers from several potential
purchasers while still considering holding on to the unit. VIA already
holds a 15 percent stake in S3.
Sony
Online Departure
Lisa Simpson, president of Sony Online Entertainment, is making a break
from the company to take a position with the CBS Internet Group. Simpson's
departure follows closely on Sony's decision to reorganize it's film,
music, and online activities under the collective banner of Sony Broadband
Entertainment. Former 989 Studios head Kelly Flock is said to be Sony's
choice to take on the division in the role of CEO.
[Thursday,
April 6, 2000]
ATI
Gains
Strong demand across it's entire product line helped ATI to post solid
gains in second quarter sales and earnings. ATI sales surged 28 percent
in the second quarter, pushing earnings to $380.1 million. ATI posted
earnings of $297.2 million in the same period last year. Income reached
$51.1 million for the second quarter, compared to $21.7 million this time
last year. "Our second quarter places ATI solidly on track with corporate
plans," said company president K.Y. Ho.
Midway
Forecasts Loss
Midway Games is warning investors of a loss in the fiscal third quarter,
as well as a likely loss in the fourth quarter. The company projects revenues
in the range of $50 to $55 million for the third quarter ended March 31,
with an operating loss near $8.75 million. Midway posted revenues of $80.3
million with a profit of just over $1 million in the same period a year
ago. Midway had previously forecast that revenues and income for it's
fiscal year, which ends June 30, would reach record levels. Slow home
and coin-op sales are to blame, according to Midway, as well as increased
development cost related to next-generation consoles.
Jolie
in Tomb Raider
Eidos and Paramount Pictures have landed an Oscar winner to fill the shoes
of Tomb Raider's Lara Croft in the upcoming live action movie adaptation
of the best selling videogame Angelina Jolie, fresh from an Oscar win,
will take on the lead role. Con Air director Simon West is set
to begin principal photography this summer in London.
Everquest
Scan Ban
Verant Interactive is canceling a policy of scanning Everquest
players PC's as an anti-cheating measure. The company had planned to search
player's machine for tools that would allow cheating in Everquest's
online world, and had threatened to ban players who refused to allow the
searches. A backlash from players with privacy concerns has convinced
the company to abandon the plan. "In our haste to try and thwart people
from damaging the game, we went overboard," said Verant's John Smedley.
Funco
Battle
Just days after Electronic Boutique announced a definitive merger agreement
with Funco, rival game retailer Babbage's is making a buyout play. Babbage's
is set to offer $135 million to acquire Funco, significantly above EB's
offer of $110 million. Babbage's, a division of Barnes and Noble, said
it is prepared to pay its offer price in cash or in combination of cash
and Barnes and Noble stock. The Funco board of directors promised to meet
to consider the offer.
[Wednesday,
April 5, 2000]
Aureal
Chapter 11
Faced with operating losses of $26.9 million and the mass resignation
of the entire senior management, Aureal filed for bankruptcy protection
in a California court. The chapter 11 insolvency filing is intended to
protect the company from its creditors while the board weighs its options.
The Aureal board has not year determined whether they will seek new management
or shutter the company.
Final
Fantasy Honored
Hironobu Sakaguchi, president of Square USA and creator of the Final Fantasy
series, will be this year's recipient of the Academy of Interactive Arts
and Science's Hall of Fame Award. Last year, the Academy granted Sid Meier
the Hall of Fame honor. The award will be presented during the Academy's
Interactive Achievement Awards ceremony on May 11 during this year's E3
Expo.
Interplay
Singapore
As part of a renewed global expansion strategy, Interplay's OEM division
is opening a new office in Singapore. The intent is to replicate Interplay
OEM's European and North American success in the Asia Pacific region.
Stijn Welkers, who formerly managed Asia-Pacific operations from the company's
London office, will move to locally oversee the office. "Having Stijn
based in Singapore means we are positioned to better serve our local customers.
This is a key reason of our success around the world," said Denis Hure,
Interplay's vice president of worldwide sales.
ATI
Completes Buy
ATI's purchase of ArtX is complete. As part of the purchase agreement,
ArtX founder Wei Yen has joined the ATI board of directors. The acquisition
resulted in the issue of approximately 21.5 million shares of ATI common
stock and an addition 7 million stock options. An additional 4.1 million
ATI shares will be issued to former ArtX stock holders should the company
meet certain performance milestones. Based on ATI's share price as the
time of the acquisition's closure, the final purchase price paid by ATI
for ArtX is expected to be near $450 million.
[Tuesday,
April 4, 2000]
3dfx,
Intel Cross-License
3dfx and Intel entered into a new partnership, resulting in the end of
several ongoing patent disputes. Intel inherited a number of infringement
suits with 3dfx when it acquired the technology portfolio of Real 3D last
year. The new agreement has the two companies dropping all ongoing litigation
in favor of a mutual patent cross-licensing arrangement. "Through its
engineering and acquisitions, Intel has built a broad and valuable patent
portfolio,'' said 3dfx CEO Alex Leupp, "this agreement further enhances
our ability to deliver leading-edge products to market in a timely manner."
Maxis
COO Goes Web
Former Maxis COO Rob Martyn is making the switch to online learning. Martyn
is joining web-learning network Ninth House as senior vice president of
network programming. Prior to leaving the green pastures of the video
game world for the web, Martyn spent two years as COO of Maxis, where
he was executive in charge of production for Sim City 3000 and the Sims,
as well as many year in production at Electronic Arts and Broderbund.
PC
Data's Top Ten
The top of the charts for the week of March 19-25 is still occupied by
a framilliar title, but there are some new players fighting there way
to the top.
1.
Who Wants To Be A Millionaire, Disney
2. The Sims, Electronic Arts
3. Star Wars: Force Commander, LucasArts
4. Star Trek: Armada, Activision
5. Lego Island, Mattel Interactive
6. MP Roller Coaster Tycoon, Hasbro Interactive
7. Half-Life, Havas Interactive
8. Microsoft Age of Empires II: Age Of Kings, Microsoft
9. Command & Conquer: Tiberian Sun Firestorm, Electronic Arts
10. Thief 2: The Metal Age, Eidos
[Monday,
April 3, 2000]
Free
Dreamcast
Sega is launching a new branded Internet service provider, and is offering
consumers free Dreamcast consoles. Sega will offer a $200 rebate, intended
to off set the cost of the console, to users who sign up for two years
of Sega's high speed internet service. The Sega Net service is set to
launch this fall at a price of $21.95 a month. Sega hopes that the promotion
will help it find home for an additional four million Dreamcast consoles
by 2001, giving Sega an installed base of six million costumers. Sega
launched a new subsidiary devoted to online games, called Sega.com, and
named Brad Huang as the company's first CEO. Because Sega Net will be
its own virtual private network, the company is positioning the service
as faster online gaming alternative.
Microsoft
Guilty
A Federal court ruled that Microsoft violated U.S. antitrust law by abusing
its computer operating system monopoly. Judge Thomas Penfield Jackson
ruled that Microsoft violated parts of the Sherman Act antitrust statutes
in relation to three of the four main charges brought against the company.
"The court concludes that Microsoft maintained its monopoly power by anticompetitive
means and attempted to monopolize the Web browser market," was the summary
of the courts 43 page ruling. The courts finding will lead to the consideration
of penalties designed to prevent future antitrust violations. Microsoft
promised to appeal the ruling.
Learning
Co. Sale
Mattel is looking to unload The Learning Company less than a year after
it purchased it. Mattel is separating The Learning Company from the remainder
of Mattel Interactive and has hired Credit Suisse Boston to sell the software
maker that it spent $3.6 billion to acquire last May. The purchase had
been part of CEO Jill Barad's strategy to expand Mattel into electronic
toys and video games, but accounting problems and huge losses related
to acquisition led to Barad's resignation instead. At the time of the
acquisition, Mattel had expected The Learning Company to contribute $50
million annually to its bottom line; instead the company posted losses
of $183 million in the fourth quarter and $206 million for the year. Mattel
will treat the unit as a discontinued operation effective March 31. The
Wall Street Journal estimates that the sale price for The Learning Company
could range from $500 million to $1 billion, depending on included licenses,
with Havas, Knowledge Universe, and Infogrames said to be interested.
EB
Buys Funco
Electronics Boutique has agreed to buy Funco. EB will offer $17.50 a share,
or $110 million in cash, to pick up all outstanding shares of Funco Inc.
The deal will merge EB's 628 mall locations with Funco's 400 strip mall
and neighborhood stores to create the games industry's largest specialty
retailer. Electronics Boutique hopes the acquisition will allow them to
reach a more diverse clientele while expanding the company's used games
business. The merged group plans to open an additional 125 EB outlets
and 60 Funco stores by the end of the year; the merger will be completed
early this spring.
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