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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.

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Following August’s surprise shortfall, September was set to be a litmus test for measuring the health of the gaming industry in the U.S; a chance to spot test if softness in consumer spending would have impact or if the industry’s record setting pace would resume.  Thursday, the data came out.  NPD released the results of their retail sales survey for the month of September.  The results were, well, mixed. 

Overall, sales fell seven percent year over year to $1.27b in September.    It was the second month in a row, after a streak of 27 months, that sales failed to yield a double digit growth rate.  It was also the first decline since March 2006.

On the face of it, that decline may look troublesome.  Beneath the surface, however, it’s a little more complex. Click to Read More

Like many high profile corporate executives, EA’s CEO John Riccitiello has his share of fans and critics.  They exist among gamers and stock watchers alike. Some support his stewardship of the gaming company.  Other’s can’t stand it.  Regardless of perspective, one thing that’s hard to argue about is his candor.  Riccitiello has a penchant for speaking directly and sharing his thoughts.  In New York for Dow Jones Media Money survey this week, he sounded off on issues from the prospect of working with Google, to Digital Rights Management to the effect of the downturn on the industry.  In summary, without interpretation, here are the excerpts:

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In February of 2007, Google paid $27m to acquire small in-game advertising company Adscape.  The expectation was the acquired technology would quickly ramp into a Google platform to rival Microsoft’s Massive unit, IGA Worldwide and others chasing the expected boom in video game ads.   That never happened.  While EA linked with Massive, as did Activision, the Adscape platform remained locked away somewhere on Google’s campus.

In July, Venture Beat reported daylight might soon be let in.  The was no certainty but AdSense for Games, the report speculated, was quietly being tested for use with console games, web games and mobile offerings.  The platform was “something to watch for.”

This week, the doors were finally opened.  Click to Read More

Entertainment industries are sometimes called recession proof.  When wallets tighten, retirement gets pushed back, or bills go unpaid, people will spend a little to escape fear and worry.  There’s a need for entertainment in tough times, the theory goes.   The reality is less forgiving: entertainment like anything else can fall victim to a weakening economy.  Entertainment industries are recession resistant not recession proof.   Glimpses of August data may be beginning to prove that point. 

Mirroring a surprise shortfall in August gaming sales, Netflix came out Monday with a surprise adjustment for their third and fourth quarter guidance.  A few weeks ahead of the actual earnings report (October 20th), the Los  Gatos company preannounced that third quarter revenue and EPS will fall within prior guidance but subscriber numbers will fall “just below” the low end of guidance.

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Nintendo’s sold more than 14 million Wii consoles in the U.S and dominated the monthly U.S. sales charts for months, but leading into Thursday’s Nintendo media day in San Francisco, the palpable buzz was centered not so much on what Nintendo has in the market now (nor what Nintendo had to announce today) but instead on what the company might reveal in the next few years. 

The trigger for the rumor mill’s rapid heart rate was a report published September 30th on parent-centric game site “What They Play.”  Click to Read More

Crossing T’s and dotting I’s, this week there were a couple news briefs from the M&A front:

Sony BMG:  After months of rumors, Sony announced August 5th that they’d reached an agreement to buy partner, Bertelsmann’s, fifty percent stake in their joint Sony BMG music label.  Regulators in Europe approved the deal a few weeks ago and it’s now officially complete.  The world’s second largest record label, which includes famed imprints Columbia, Arista, Epic and RCA records, will now be called Sony Music Entertainment, Inc. and be a subsidiary of Sony Corporation of America.  Bertelsmann received $1.2b, including $300m in cash that was carried on Sony BMG’s books.

Take Two:  EA walked from its hostile takeover attempt in August, and two weeks ago, walked from the prospect of a friendly deal too.  Now Take Two Interactive, will walk away from sales discussions Click to Read More