Gaming Short Takes: Rock Band Billion, Sims DRM, and Eidos Shareholder Vote

rock band record billion salesRecapping a few quick bits from around the gaming world: Rock Band has crossed into rare air and achieved a billion dollars in North American sales, EA will forego using the controversial SecuROM DRM system with the Sims 3 and Eidos is now one step closer to closing its sale.

The details….

Guitar Hero was king for a year, now the throne belongs to Rock Band.

MTV Games, Harmonix and Electronic Arts jointly announced that their Rock Band franchise crossed the billion dollar revenue threshold in North America (based on NPD data), achieving the milestone faster than any other game in history.

Hitting the milestone in fifteen months, the game bested the prior record of 26 months claimed last January by Activision’s rival Guitar Hero brand.

Both music games have proven fantastic sellers.  Not diminishing that fact but as a footnote for looking at the revenue records, it is important to note the totals for both games is skewed because of their pricing structures. Click to Read More

Gaming for Emerging Markets? Meet Zeebo

zeeboBrazil, Russia, India and China (collectively “BRIC”) are the world’s leading emerging market countries.  As a whole, they represent 40% of the world’s population. Their middle classes presently spend well above a trillion dollars a year, and counting (according to the World Bank).    Goldman Sach’s has predicted the BRIC middle class will cross the threshold of a billion people by 2015.

No matter how you dissect it, BRIC represents a huge market for consumer product companies.  The video game industry has barely touched it.  With consumer income levels still relatively low, hardware makers have stayed away.  With piracy threats a serious concern, multi-national software developers have avoided developing localized content or pushing the issue.

That could soon change.  In one of the more interesting announcements to come out of this week’s Game Developer’s Conference in San Francisco, San Diego based Zeebo announced that it’s found what, it believes, could be the key to opening the door to gaming fortune in emerging market countries.

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iPhone Gamer NGMOCO Closes Series B

ngmocoCombine a large market opportunity, an inexpensive distribution platform, good margins and relatively low development costs and chances are you’ve got a recipe that will get investors interested. For ngmoco, it’s cooked up $10m in fresh cash.

The iPhone game publisher whose name stands for “Next Generation Mobile Company” just closed a $10m Series B financing led by Norwest Venture Partners. Prior investors Kleiner Perkins and Maples Investments also participated.

The money is earmarked for expansion and according to Ngmoco’s founder, ex-Electronic Arts executive Neil Young, the opportunity the company is chasing is huge.

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Staffing Report: Changes at EMI and Red Octane

When Guy Hands stepped out of the CEO role and become Chief Investment Officer at Terra Firma last week, the private equity firm characterized the move as an operational decision that would allow Hands to get more involved with existing portfolio companies and new investments.   He’s apparently not wasting any time. 

It was revealed today, Douglas Merrill will step down from his roles overseeing the digital business at the Terra Firma owned record label, EMI.

According to an internal EMI memo snagged by All Things D, the former Google Chief Information Officer’s departure was a consequence of reorganization.

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NPD February: More Gaming Growth

Leading up to another month of retail statistics reflecting the health of the gaming industry, analysts were mixed on their forecasts. Some thought the video game sector would slip slightly in February while others predicted steady, but modest, growth. With data in, the bulls won the pool.

Based on NPD data released today, February video game sales showed sequential and year over year growth.  For the month, the total tally climbed from $1.33b in January to $1.47b in sales.  Year over year it was a ten percent gain.

All of the subcategories tracked in the sector saw comparable growth with percentage returns straddling the double digit mark.  The accessories category showed the highest percentage growth with a gain of 13% over 2008.  Software was the weakest category with a 9% improvement.

Breaking out results by category:
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Earnings Watch: Take Two Beats Street in Q1

A year ago, all eyes watched as Take Two Interactive began to fight off EA’s hostile takeover bid.  Today, stock watchers checked back in to see how the company was performing months removed from leaving that challenge behind.  The result was mixed.

In earnings announced after the close of markets, the game publisher reported higher than expected sales for the first quarter but set second quarter guidance below analyst targets.

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Amazon Tests Video Game Trade-in Program

games recycle smallGameStop proved buying and selling used video games is a lucrative market. When earnings are reported later this month, the company is expected to announce more than $2b in fiscal year revenue came from second hand goods, and all at higher margin than primary sales.  (see attached chart).  Still, opportunity notwithstanding, other retailers have generally shied away from entering the space. Between managing the quality of products, the risks of alienating suppliers (many of whom pay “market development fees” to the retailers), or even the risks of cannibalizing primary sales, it’s just not been worth it.   But now sales are down and times tight. Consumers are looking for bargains.  That has some retailers rethinking their choices. 

Recently, Toys R Us launched a limited New York area pilot to allow customers to trade in used game titles for store credit.  Best Buy is rumored to be considering doing similar and Thursday, Amazon launched a beta of its own.

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