Seth Gilbert, 11-11-2008
When a couple moves in to live together, the old wagon-wheel coffee table or never worn clothes get tossed. Some things just don’t fit together. Others have to go to make room for the new. The same process applies to corporate mergers. Overlapping jobs or assets that don’t match the new coupling get discarded.
Last July, when Activision and Vivendi Games combined to form Activision Blizzard there was no doubt some Vivendi Games properties would meet this unpleasant end. Reviews were already being conducted. Staff “realignments” were in the works. “Options being explored.”
The questions were what would go, when and, for the lucky few to find new homes – where.
Today, the fate of Vivendi’s Sweden based Massive Entertainment studio was finally revealed. It will be let go, but saved. Subject to terms not disclosed, Ubisoft has agreed to buy the critically acclaimed studio.
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Seth Gilbert, 11-10-2008
In early September, EA began selling the hotly anticipated PC game title, Spore, around the globe. The ambition was huge, the hype enormous. Spore was to be a “sure thing” hit. So far, it’s lived up to that expectation. The game is a top seller in Amazon’s PC and Mac games categories (#1 in PC and Mac simulation games, #6 in PC games overall) and according to EA, near two million copies sold in the first three weeks of sales. Unfortunately, with the sales and high visibility have come another less desirable achievement: Spore has become a lightning rod for complaints over the SecuROM embedded digital rights management system EA is using to thwart piracy.
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Seth Gilbert, 10-30-2008
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).
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Seth Gilbert, 10-29-2008
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.
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Seth Gilbert, 10-28-2008
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.
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Seth Gilbert, 10-23-2008
Google is being cautious. Apple is being prudent . Now, another bellwether earnings announcement and more of the same. Thursday, Microsoft reported decent earnings but cut forward guidance amidst prevalent fears about the economy and uncertainty in how to predict its impact in the coming months.
Net income for the first quarter in Microsoft’s fiscal year came in at $4.373b, or 48 cents a share (diluted), up 2% from $4.289b (45cents/share) for the same period last year. Revenue was up 9 percent to $15.06b.
The results were in line with Microsoft’s July guidance which forecast EPS of 47 to 48 cents a share and slightly ahead of analysts whose consensus estimate (Thomson Reuters) was 47 cents a share on revenues of $14.8b.
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Seth Gilbert, 10-22-2008
The pink slips are starting to pile up. Beyond the 1,500 job cuts announced Tuesday by Yahoo, start ups with limited revenue have begun cutting back to stretch their existing capital reserves too.
Search start up Mahalo, which has raised more than $20m from firms including Sequoia Capital and News Corp, has laid off near ten percent of its staff.
Fellow Sequoia start up, music social network iMeem, which has raised more than $50m, Click to Read More
