In relationships, timing is everything. No matter how appropriate a pairing, both parties need to be ready. The stars need to align. Four years ago, Tivo and Netflix ambitiously tried to hook up to deliver an internet video distribution service. Unfortunately, the companies weren’t mature enough. Moreover, the marketplace (e.g. movie rightsholders) were not comfortable endorsing such a forward looking union with a license. Today, things are different.
Since the beginning of August, the Japanese Yen has risen almost 35% against the Euro and about ten percent against the dollar. For Japanese businesses that rely heavily on overseas sales, companies like Sony and Canon, these fluctuations are wreaking havoc on net income as they convert revenues across to their native Yen. The pain was obvious in Sony’s earnings announcement yesterday. Today, Nintendo, though on much stronger footing, showed a hint of the same ailment.
In earnings news, Nintendo raised sales targets for the Wii console heading into the holiday period but simultaneously lowered net profit forecast for the fiscal year ending in March by 16% (about 65,000m Yen).
Sony warned of financial trouble last week. Now it’s official. Hit with the triple whammy of a unexpected currency fluctuation, weakening consumer spending and mounting losses at the music division, the company reported a 72% drop (y/y) in net income for the fiscal second quarter ended September 30th.
By the numbers, for the 2nd quarter, total revenue was ¥2,072b. At Sept. 30th exchange rates of ¥104 to $1 that translated to about $19.93b. (At Wednesday’s intraday rate of about 97 Yen to the dollar it’s equivalent to near $21.4b). Net income was ¥20.8b or ¥19.83 per diluted share.
In August, NPD Group released its Top 5 ranking of U.S. music retailers for the first half of 2008. Apple was number one and Amazon rising. In the related press coverage, Walmart, though a significant seller at number two, seemed almost a future footnote. The prevailing view was to write them off. Now, with Best Buy trying to secure its digital footing via Napster, Walmart is making moves to regain ground (or at least maintain it) too.
Throughout 2007, Microsoft and Google seemed locked in a race to digitize and index the books of the world. For months the companies seesawed back and forth with news of agreements granting exclusive access to world renowned library collections.
Google tied up the University of Lausanne in France and the University of Mysore in India. Microsoft captured the British Library in the U.K. and the University of Toronto in Canada. Google wooed Stanford and Harvard. Microsoft snared Cornell and the University of California.
Back and forth it went in what seemed to be a small but important front in the companies’ ongoing competition for audience eyeballs and next generation search technology. Then last spring, in May, abruptly, it stopped.
With little warning, and to limited fanfare, Microsoft pulled the plug. Organizing all the world’s information wasn’t their mission. Microsoft was interested in next generation search and a sustainable business model. Creating a library instead of crawling existing ones apparently was no longer worth it, so they ceded the fight. Copyright lawyers chasing Google’s Book Search project were less generous, until today.
On February 8th, Activision (now Activision Blizzard) trademarked the name “DJ Hero” with the US Patent and Trademark office. The name was reserved for “game software” and “interactive video game programs; computer game discs; downloadable software for use in connection with computer games; video game controllers; interactive video game comprised of a CD or DVD sold as a unit with a video game controller.”
In the months since, rumors about the possible game have run rampant but there’s been no official confirmation a title was even in development. Now there is.
Ubisoft CEO Yves Guillemot said in July that he thought “the future of [the gaming] industry depends on [studios] ability to create brands that captivate audiences and to extend those brands to other forms of entertainment.” He’s not alone in that view. With common visual techniques, shared audience demographics and similar story telling narratives the convergence of gaming and movie making is an increasingly common theme. That’s especially apparent at Electronic Arts.
In July, to hasten development of Hollywood relationships, EA signed a deal with talent agency United Artists. At the end of September, EA signed a game development deal with the 300’s director, Zack Snyder. Now, EA is moving ahead with a film deal built around their mercenary themed title, Army of Two.