Activision Sued Over DJ Hero (UPDATED)

DJ hero lawsuitActivision Blizzard walked out of court victorious in early March after quashing an ill founded patent lawsuit that challenged its flagship Guitar Hero franchise. Now, barely a month later, the Santa Monica based game publisher is walking back in again to face yet another suit regarding its lucrative series.  This time it’s DJ Hero, a hotly anticipated, in-development Guitar Hero spin off, in the line of fire.

The suit, filed April 14th by Scratch DJ LLC (“S.DJ”), a joint venture owned by Genius Products and DJ equipment maker Numark, alleges Activision illegally interfered with the development of S.DJ’s competing game, and did it intentionally, violating several tort laws along the way,  in order to make sure DJ Hero has the advantage of being the first to market. 

S.DJ’s game, Scratch: The Ultimate DJ, has been in development since at least early 2008.  Artists ranging from the Gorillaz to Run DMC to  the Black Eyed Peas have been linked to it and the buzz factor is pretty high.   

The game was tentatively expected to be released for the Xbox 360 and PS3 in September.

That date may now be in doubt, however, and according to S.DJ, that’s because of Activision’s actions. 

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Shuffling Margins, iPod Shuffle Teardown Leads to New Estimates

Ask an accountant or economist to define the value of an iPod Shuffle, or what it’s worth, and you might get a few dissertations in reply.  Ask what it costs? That’s a little easier to peg.

Market research firm, iSuppli, has done a teardown of the device and estimates the diminutive MP3 player is made from a minuscule $21.77 in parts.

Business Week reports in its summary that nearly half of that comes from two Samsung parts: the controller chip and flash memory.

The price is purely hardware, and it is merely an estimate. It doesn’t include development costs or sales and marketing expenses but even so, it suggests the gross margin on the player should Click to Read More

Applevine: Run on Flash and New Patent Suit

Apple appears to have bought up large amounts of flash memory fueling a new round of iPhone 3.0 rumors.  The company was also hit with a new patent infringement lawsuit. In detail…

Memory orders are often monitored as potential indicators of consumer electronics production changes.  It’s not an exact science as companies routinely adjust inventory on parts to hedge against price fluctuations, or to satisfy demand,  still spikes in volume can be significant.

Apple has a contract to buy its flash memory chips from Samsung, Toshiba, Hynix, and Micron through 2010.

Think Equity Partners reported in February that Apple had bought up much of Samsung’s supply of flash memory. Digitimes reported today that Apple’s recently snagged another 100m 8Gb NAND Flash memory, mostly from Samsung as well.

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G-Phone 2 Coming Soon to the US?

The second generation of G-phone, HTC’s Magic, was revealed at the GSMA Mobile World Congress in February.  All signs indicate a stateside debut could be coming soon too.

At the end of March, versions of the new Android powered phone cleared the FCC’s certification process (copies of FCC documents here).  Now, today, T-Mobile has sent out invites for a special event to be held April 21st in New York City.

Details haven’t been provided as to what T-Mobile has planned.  It is possible the gathering is for the debut of some other phone… but the odds are high it’s Magic.

The Android market seems to be picking up speed. Click to Read More

iTunes Tiered Pricing Now Official

As announced in January, and forecast a little more than a week ago, Apple officially made the switch from 99 cent songs to tiered pricing on iTunes today.  

For the better part of six years, Apple’s had resisted record label pressure to make the shift.  Steve Jobs argued the pricing needed to be “fair” to offset the temptation of downloading a pirated song.  Raising prices too high, he said, would drive customers away.  99 cents was simple, and sufficient.

Apple backtracked and conceded in a Macworld announcement, but only after the record companies agreed to remove Digital Rights Management restrictions (DRM) from the music in the catalog, and to allow Apple to sell songs wirelessly over 3G in exchange.

Under the new arrangement, the music store is now entirely composed of DRM-Free, 256kbps songs priced at 69¢, 99¢, and $1.29.  (Upgrading previously purchased songs to the higher bit rate, and encryption free format can be done for 30¢ a track).

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Exodus from Midway?

midway choicesA talented staff can be a company’s greatest asset but in tough times it can also be a significant liability.  It comes down to motivation and retention.  Can employees be kept happy and on the job or will they flee to a more stable, more certain work environment if able?

Midway Games, which is struggling to survive a bankruptcy restructuring, is facing these very issues and the prognosis is not great, so far.

The company’s looking at asset sales and other tough choices in order to find a way to service nearly $240m in debt.  

Employees working today could be out of a job in two, three or six months.  (They could also find themselves part of a stronger, recapitalized company but it’s a gamble).  Each has to decide whether to look for life raft, or try and keep the ship afloat.

New rumors suggest door number one may be becoming the more popular choice.  Several reports circulating over the weekend said a large chunk of the team behind the company’s flagship Mortal Kombat series is in discussions to leave en masse and start anew under another publisher’s umbrella.

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Streaming Royalty Struggles Continue, Google Pulls Music Vids from Germany

Legend has it, the great blues musician Robert Johnson went down to a crossroads and made a deal with the devil.  In exchange for unfounded musical talent, the story says, he traded his soul.   It was a yes or no choice; be a guitar hero, or not.   He chose the immortality of his music.

The music industry is hardly so fantastic but like the legend, the thin line between the industry’s successes and failures, or evolution and regression, seems to hinge on the big decisions made when the road of progress forks.

Looking at the music business over the last decade, as its struggled to evolve to the changing digital landscape, two pivotal moments jump out.  The first was the evolution of file sharing networks and how the music industry chose to handle them.   The second was the advent of Digital Rights Management (DRM) encryption and how the music industry steered its early use.

Now, it’s starting to look like the industry is reaching a third crossroads: license fee rates for streaming services .

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