News

Week of July 24 - July 30, 2000

[Friday, July 28, 2000]

Xbox Marketing Blitz
Robbie Bach, SVP of Microsoft's games division, said yesterday the company plans to spend a cool half-billion dollars on marketing its Xbox in the first 18 months of its debut, making it the biggest product launch ever for Microsoft. The plan at this point appears aimed primarily at unseating the prominence of Playstation 2, which will have been on the market about a year before Xbox launches in fall 2001, and staving off any threat from Nintendo's next-generation console, which is expected to arrive in the U.S. at around the same time as Xbox. Bach's presentation to a meeting of financial analysts was focused mainly on comparisons between Xbox and Playstation 2 specifications and development environments, leading some analysts to believe that Sony is the only competition Microsoft is taking seriously. However, much less is known at this stage about Nintendo's upcoming console than Playstation 2, which has already been released in Japan.

Bach also said that the Xbox hardware design has been completed. "We are now building the form factors, the forms to actually put components in. We are now at the stage where we're making serious progress bringing Xbox to life," he said. Currently approximately 30 games are known to be under development for release at or near the console launch. Bach said development kits would be on their way to about 200 third-party developers.

Public Health Organizations Decry Entertainment Violence
Leaders of the American Academy of Pediatrics, the American Psychological Association, the American Academy of Child and Adolescent Psychiatry, and the American Medical Association released a joint statement on the impact of entertainment violence on children yesterday at a Congressional public health summit, calling for more awareness of the effects of violent media on children and further study into the issue.

The statement cited television, movies, music, and interactive games as "powerful learning tools, and highly influential media," the effects of which are "measurable and long-lasting." On games in particular, the statement said, "Although less research has been done on the impact of violent interactive entertainment (video games and other interactive media) on young people, preliminary studies indicate that the negative impact may be significantly more severe than that wrought by television, movies, or music." Specific studies supporting this conclusion were not cited in the statement.

The full document is available in PDF format here.

Horizons Back on Track
Artifact Entertainment is reporting that it has received sufficient additional private funding to continue development of its forthcoming massively multiplayer online game Horizons for at least "the next few months," according to its web site. The future of the game was uncertain after Artifact reported last month that earlier private funding had fallen through. Horizons is currently slated to ship sometime in 2002.

[Thursday, July 27, 2000]

3DO Posts Q1 Loss
The 3DO company has announced results of the first quarter of their fiscal 2001, reporting a net loss of $26.3 million, or 71 cents per share. In the same period last year, the company posted a loss of $6.8 million or 26 cents per share. Revenues totaled $7.9 million for the quarter compared with $13.1 million for last year's first quarter. Chairman and CEO Trip Hawkins said the results were in keeping with expectations, due to shortages of Sony hardware, industry pricing pressure, and the delay of Army Men Air Attack for the Nintendo 64, which shipped in the second quarter. Five other titles are scheduled to ship in the second quarter for Playstation and PC, and 19 are planned for the third quarter, including two Playstation 2 titles.

PC Data Top Ten
Not surprisingly, Diablo 2 remains atop PC Data's rankings of the best selling PC games for the week of July 9-July15.

1. Diablo 2, Havas Interactive
2. The Sims, Electronic Arts
3. Who Wants to Be a Millionaire 2nd Ed., Disney
4. MP Roller Coaster Tycoon, Hasbro Interactive
5. Starcraft, Havas Interactive
6. Icewind Dale, Interplay
7. MP Roller Coaster Tycoon Corkscrew Follies, Hasbro Interactive
8. Sim City 3000 Unlimited, Electronic Arts
9. Sim Mania Pack, Electronic Arts
10. Age of Empires II: The Age of Kings, Microsoft

Japanese Console Sales
Gameboy Color continues to flourish in Japan, outselling Dreamcast by a factor of four and Nintendo 64 by a factor of eight, according to Japanese sources that released console system sales numbers in Japan for the first six months of 2000. Here's how the consoles stack up:

Playstation 2 - 1,924,581
Gameboy Color - 1,197,485
Dreamcast - 282,238
Playstation - 218,672
Wonderswan - 163,171
Nintendo 64 - 143,820
Neo Geo Pocket Color - 81,971

[Wednesday, July 26, 2000]

Sony Coughs up Loss for Quarter
Sony Corp. posted a loss of 88.29 billion yen ($810 million) for its April-June quarter. Earlier reports had suggested Sony would post an even bigger loss of $930.1 million, but the actual numbers are no small consolation when compared with the net profit of 18.43 billion yen ($169 million) posted for the same period last year. Much of the loss is being attributed to a one-time write-off of 101 billion yen ($926 million) in its movie business, as sales were up across Sony's electronics operation, movie business, insurance, and other operations. However, sales were down in music an flat in the games, as rising Playstation 2 hardware and software sales in Japan were countered by a significant drop in Playstation sales in the U.S. and Europe.

EA Q1
EA has posted a loss for its first fiscal quarter 2001, which ended June 30. Net revenues were $154.8 million compared to $186.1 million for the same period last year. On an as-reported basis, the consolidated net loss and diluted net loss per share were $42.3 million and 65 cents respectively, compared with net income and earnings per share of $2.3 million and 4 cents in the same period last year. CEO Larry Probst attributed the loss in part to the anticipated seasonal slump prior to the U.S. debut of Playstation 2. Net revenues were down 30 percent in North America with no new Playstation or Nintendo 64 titles shipping during the quarter, but revenues in Asia were up slightly in part both to strong PC sales and the success of FIFA Soccer World Championship for Playstation 2, which topped the Japanese charts during the quarter. The top-selling title for the quarter was The Sims, which was released in EA's previous fiscal year.

[Tuesday, July 25, 2000]

Sony and Sega Team Up
Several Japanese web sites have reported that unlikely bedfellows Sony and Sega will be participating in a four-way collaboration with software makers Sammy and Bandai to provide game content for Playstation 2, Dreamcast, and Wonderswan. The majority share of the team will go to Sammy, while Sony and Sega will reportedly each take a ten-percent stake in the deal. The name of the company has yet to be confirmed, but possible names include Dinpus and Sokkia. Reports indicate the new company may be up and running by March 2001.

LithTech For Real
RealNetworks and LithTech have announced a strategic alliance and licensing agreement aimed at enabling game developers to create games designed specifically for electronic software distribution (ESD) with a new version of the LithTech engine. The ESD-optimized version of the LithTech engine adds extensions for RealVideo and RealAudio playback, and new animation blending and texture compression features designed to reduce game download sizes. LithTech is making its SDK freely available to developers who join RealNetworks' RealPartner program, and developers who join the partners program will be added to RealNetworks' Real.com Games for distribution. For its part, RealNetworks has made a minority equity investment in LithTech Inc. LithTech CEO Jason Hall expressed hope that broader distribution capabilities might "change the economic model for game developers."

Metacreations Acquires Viewpoint
Metacreations Corp. announced an agreement yesterday to acquire Viewpoint Digital, currently a wholly owned subsidiary of Computer Associates, into its Metastream subsiary. The new company will have roughly 170 employees providing web media content to its clients, with the New York headquarters and several other offices adopting the Viewpoint name. Computer Associates will retain a 20 percent ownership stake in the new company and a license to use Viewpoint technology. Financial terms of the agreement were not disclosed.

If I Had a Hammersmith
Criterion Software announced today the completion of its acquisition of game development middleware distributor Hammersmith Technologies. Hammersmith will be renamed Criterion Software Inc. and become a wholly owned subsidiary of London-based Criterion Software Ltd., which is itself a subsidiary of Canon. Criterion hopes the acquisition will strengthen its North American support and distribution prospects.

[Monday, July 24, 2000]

Take-Two and Pop Top
Take-Two Interactive is buying Pop Top Software. Pop Top, best known for developing last year's hit Railroad Tycoon 2, will continue on in its St. Louis headquarters. In addition, the sale of Pop Top to Take-Two includes a provision to keep Pop Top President Phil Steinmeyer with the company in his current capacity for at least four more years. The terms of the sale have not been disclosed. Pop Top is currently working on Tropico, a 3D strategy game set for release in 2001.

3D Merger Completions
Two 3D chipset makers have wrapped up recent mergers. 3dfx shareholders approved that company's purchase of Gigapixel Corp., and elected Gigapixel founder George Haber and Gigapixel board member Andrei Manoliu to serve on the 3dfx board of directors. 3Dlabs has also completed its acquisition of Intergraph's Intense 3D graphics division, and will be exhibiting both its Oxygen and newly acquired Wildcat professional graphics accelerators at Siggraph. The purchase had been expected to close last quarter.

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