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When Sony released earnings data at the end of October two things were abundantly clear: i. the PS3 was still a major component of their future plans; and ii. unless they started changing things soon, especially in time for the holiday sales push, the future wasn’t going to be too bright.

Somebody at Sony got the memo.

Monday, in an effort to increase game development, Sony cut the fees charged to game developers. The change comes a month after Sony cut global prices for the console.

The Software Development Kit, which Sony calls the Reference Tool, will now cost $10,250 in North America, $8,600 in Japan, and $11,250 in Europe. Sony will also improve programming tools included with the kit.

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Albert Einstein once said that "Everything should be made as simple as possible, but not simpler." Near the middle of every month market research firmNPD Group tries to apply that maxim to the gaming industry with release of retail statistics for the prior month’s sales. The numbers are meant to show the direction of the market, and individual products. Today, the October numbers hit the wires. They don’t account for an apparent turn around for Sony’s PS3, which began moving well with price cuts, but the numbers do give a snapshot of the gaming industry as it enters into the two biggest months of their year. As has been the case all year, the industry is hot.

For October, just about a year after the release of the Wii, Nintendo returned to it’s reign as king of the consoles and portables. (Nintendo was briefly displaced in September result of both strong Halo related Xbox’ sales and a limited supply of Wii’s).

As has been the case all year, the Wii remains hard to get and is selling out consistently. Click to Read More

Dynamic in-game advertising only accounted for a fraction of the nearly $80m in revenue in-game advertising generated in 2006. Still, the nascent industry is poised to overtake product placements, and potentially, by bringing a recurring revenue stream, even change the underlying revenue models for the entire gaming industry. Major game publishers are taking note. With projections of a billion dollar market opportunity by 2011, they’d be foolish not to.

Wednesday, Activision followed Electronic Arts lead and cut a deal with Microsoft’s Massive Inc. Ad Network to bring dynamic in game ads to their hot selling Guitar Hero III game. (EA Sports struck a deal with Massive in late July).

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The markets may be volatile and concerned but the VC industry is chugging ahead.  There have been 4 IPO’s and 4 $100m-plus M&A exits for portfolio companies at Accel Ventures this year.  Buoyed by that success, the firm just closed their tenth fund with $520m available for investment.  That total, while still below the $950m raised in 2000,  is up a handsome 30% over prior fund Accel IX  (IX closed with $400m in 2004). 

Accel hasn’t been involved in any new digital media or entertainment related deals the past couple weeks, but other firms have committed plenty of capital.  Takkle, Vivox and Vobile are among the recipients.  On the other hand, AmeriTV, a supposed IPTV company that sounds like Joost, apparently didn’t receive capital despite a press release to the contrary.  AmeriTV’s financing, possibly even the existence of the company, appear to have been a hoax that tripped up a few news sites that didn’t check on their facts.

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MTV Networks (Viacom) may own game developer Harmonix, and they may be working with Electronic Arts on the heavily hyped Rock Band game, but those relationships won’t preclude MTVN from working with other game companies too. There’s no conflict, especially when it comes to advertising on their TV stations.

Monday, MTVN and rival game publisher Ubisoft struck a substantial promotional deal to advertise Ubisoft’s upcoming Assassin’s Creed title. Beginning November 7th, ads and even two minute "sneak peak" trailers of the game will run on Comedy Central and Spike. Click to Read More

Sometimes bad news is actually good news in disguise. That the case at game publisher Electronic Arts (Nasdaq: ERTS). Thursday, EA released their earnings report for the 2nd quarter 2007. Relative to the same quarter last year revenue was down and earnings went from the black to the red but the bad news was good, really.

EA posted a net loss of 62cents a share ($195m) on revenue of $640m but a significant part of the loss was due to changes in accounting practices regarding revenue recognition. Click to Read More

Back in July, via Peacock Equity, GE and its subsidiary NBC Universal, invested in in-game advertising network IGA Worldwide $25m Series B Financing. Now in a move best labeled as somewhat curious, NBCU and IGA have struck an operational deal too.

According to a press release issued Tuesday, IGA and NBCU have made a pact that will allow NBCU’s ad sales force to sell inventory from IGA’s "Radial" in-game ad network.

In-Game Advertising offers the ability to serve dynamic advertising within a video game. The common example is the billboard in the background of a sporting game. Once upon a time it might have been available for a one time "product placement" where a sponsor bought the rights in perpetuity. But now, thanks to Internet technologies, in-game ads allow that billboard to be sold repeatedly and managed as if it’s real advertising real estate. Through net connections (for consoles or computer based games), the billboard (or other ads) can be changed similar to the way banners are changed on a web page. With in-game ads, media buyers can buy time-based ads and game publishers can derive an ongoing stream of revenue.

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