Seth Gilbert, 02-13-2009
In early February, Microsoft announced plans to create original video programming for its Zune media player. The concept seemed a wild tangent and the question at the time was: why? Now, there’s more of an answer: it’s not about the device.
Microsoft has quietly broken its Zune group into two separate units, one software and services focused, the other hardware.
The hardware group will now work out of the Windows Mobile organization.
The software team, which will be under the watchful eye of Enrique Rodriguez, corporate vice president of Microsoft’s TV business, will focus on a broader converged entertainment offering.
Click to Read More
Seth Gilbert, 02-12-2009
On a day when Midway Games failed to find a buyer or new capital, fellow publisher Eidos had better luck. The beleaguered publisher, suffering its own financial woes, revealed new details on a buyout overture first announced in early January. What was initially disclosed as an unnamed suitor turns out to be Japanese publisher Square Enix. The company has made a formal bid of £84.3m in cash (approximately $120 to $122m depending on exchange rates) to acquire the company.
The details to emerge thus far:
Eidos’ board has unanimously agreed to endorse the Square Enix offer. At the offer price of 32 pence per share its represents a 91% premium over the company’s three month average closing price (for the period up to February 11th). The premium is also a 258 % improvement over Eidos’ closing price on January 14th, the last day of trading prior to the company’s announcement it had been approached with a takeover offer.
Click to Read More
Seth Gilbert,
Midway Games fought the good fight, twice extending debt repayment deadlines, but ultimately extensions weren’t a solution. With time again running out, today the company gave in and sought the protection of Chapter 11 bankruptcy. (The full court document is embedded below)
Midway had been under the gun since December when then majority shareholder Sumner Redstone sold off his 87.2% stake in the company. Redstone’s firesale triggered early debt repayment clauses that put Midway on the hook for settlement of more than $150m in outstanding notes that otherwise wouldn’t have been due before 2025.
The default on those loans (which becomes automatic with bankruptcy), in turn, will trigger another $90 million in obligations to Redstone’s National Amusements that are shared with Mark Thomas, the buyer of Redstone’s shares through a participation agreement.
Working with Lazard since November, Midway had hoped to find a way to avoid this. Click to Read More
Seth Gilbert, 02-11-2009
The U.S. video game industry chalked up almost$22b in retail sales last year and is continuing to grow steadily. In 2008, approximately 20.7m current generation consoles were sold (NPD data). That number may be relatively small compared to the install base for DVD players (estimated at about 87% of TV owning households in 2007 according to Nielsen), but life to date US sales of consoles as of December were above 81.6m units (including the PS2, 38.4m, without). No matter how you count it, that is a substantial market and a sizable number of households.
Blockbuster in its continuing struggles to reinvent and improve its business wants to reach the gaming market more efficiently than they currently do. To achieve that, the company announced Wednesday they’ll begin including games in their “Total Access” mail-order rental service.
Click to Read More
Seth Gilbert, 02-10-2009
It’s now official. I’s dotted and T’s crossed on the plan. Live Nation and Ticketmaster have agreed to merge. The official press release (PDF) was issued this morning. Substantiating the early reports , here are the facts from the press releases and conference call:
• The companies will combine in a tax free, all stock merger with a combined enterprise value estimated at $2.5b.
• Ticketmaster will receive 1.384 shares of Live Nation for each share of Ticketmaster they own. Pro -Forma, Live Nation shareholders will hold 49.99% of the new company. Ticketmaster will hold 50.01%.
Click to Read More
Seth Gilbert,
For a long time, Live Nation and Ticketmaster were joined at the hip. The nation’s largest concert promoter and the nation’s largest ticket vendor formed an inseparable pair. Then Live Nation, pursuing better margins and greater ambitions of vertical integration, decided to go it alone. The tie was severed, with prejudice. Live Nation began acquiring assets and partners to be more self reliant. It joined with CTS Eventim to begin selling tickets on its own. Ticketmaster spun off from its parent corporation, IAC, and tried to blaze its own path.
Now, not a month into Live Nation’s re- incarnation as both promoter and ticket vendor (ticket sales began in January), and it turns out the old pals are ready to not just rekindle their old relationship, but tie up entirely in a merger.
Last week the Wall Street Journal discovered the two companies were in the late stage of discussions. Widespread reports citing “sources familiar” and “inside sources” predicted a deal would hit the news wires by early Monday.
The Monday news never came. The boards of both companies apparently met late Sunday but failed to hammer out all issues. A second meeting on Monday afternoon is believed to have settled the remaining impasse.
At this point, there’s no official press release nor comment from the companies but reports are starting to circulate that both boards agreed unanimously. (Details will be updated on Metue as they become available).
(UPDATE: As of Tuesday morning, the companies have now confirmed the merger and issued statements regarding the details. A full summary of the deal terms as currently announced is available here on Metue. Other details about the company can be found at the bottom of this article).
What is believed known now: Click to Read More
Seth Gilbert, 02-9-2009
When Amazon launched its Kindle eBook reader in late 2007, opinions on the device ran the spectrum. Some analysts and pundits criticized it. To them, the execution was bad. The device was unwieldy and immature. The market opportunity for eBooks was narrow at best. With Kindle, they thought, Amazon was chasing rainbows. Others looked at the vision and thought the opposite. They projected the Kindle would be transformational. Even with its warts, they lauded the first generation device and proclaimed it the publishing industry’s equivalent to the iPod.
After more than a year of sales, the verdict is still out but the Kindle has proven one thing: it’s no joke. The device has been in short supply since launch. Customers have raved about it and thanks to Kindle, eBook sales have climbed to ten percent of Amazon’s total book sales.
This morning, Amazon rolled out the second generation.
Click to Read More
