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With the gaming industry setting records at retail, content creators are increasingly looking to bring development activity in house instead of having to share the revenue pie with  third party developers.  To that end, it’s been previously reported that video game tie-ins for the next installment of Disney/Pixar’s Toy Story franchise will be developed inside Disney instead of with previous partner THQ.  Now, to keep on top of similar online and casual gaming initiatives, and streamline internal management, Disney has announced they will create a new division within the Disney Online Internet Group. 

The new organization will be called Disney Online Studios.   While not exciting news to those uninvolved, the reorganization hints at Disney’s recognition of the increasing value of their online entertainment offerings and shows a concerted plan to accelerate development of new offerings.(Disney made related moves to strengthen its M&A focus in late November. )

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On July 11, 2007 famed video game designer Shigeru Miyamoto took the stage at a Santa Monica gaming convention to reveal a peripheral and game designed to bring exercise and fitness to the Nintendo Wii gaming platform.  Wednesday, Nintendo took advantage of another trade show, this time in San Francisco, to announce the Wii Fit launch schedule for the U.S. and Europe.

Part of Nintendo’s ongoing strategy to expand the gaming market by appealing to mainstream audiences, the Wii fit package uses a specially designed balance board controller to turn exercise into games (or games into exercise).  Like the Wii’s other innovative controllers, the board (which is primarily designed to be stood on) senses motion and movement.  The device is also sensitive to shifts in weight.   Reportedly its scale-like design was inspired by Sumo wrestlers who often need to weigh themselves with two scales.

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With the expectation that Internet video will eventually replace DVDs, many have viewed the battle to set a high definition standard as an anti-climactic, largely irrelevant, marketing experiment.  To them it’s been a fire drill in an empty building.  To the studios and hardware manufacturers standing to make billions in revenue in this intermediate period (which could last five, ten or fifteen years), it’s been anything but trivial.  Now, it’s official.  HD DVD will join Betamax and Laserdisc in the pantheon of displaced technologies.  Blu Ray disc has won.

Toshiba, HD DVDs primary, backer announced Tuesday they will officially, and deliberately, exit the market.  Click to Read More

Much like in the movie industry, the brand awareness associated with a popular franchise title can decrease marketing expenses, reduce customer acquisition costs and lower market adoption risk (e.g. hedge against high production and development costs).  So long as a game sequel offers enough new challenge or enhancements over the prior version, it stands a high probability of commercial success. 

A game like Guitar Hero can be phenomenally expensive to develop across multiple platforms.  According to a report on an edition of radio station KCRW’s “The Business” program, rival title Rock band cost Electronic Arts and Viacom’s Harmonix/MTV Games approximately $200million to develop.  By the same token, however, successful titles can be famously lucrative.  The various sequels in the Guitar Hero franchise are regular visitors to NPD’s monthly top ten sales lists.  Combined, in total, they’ve generated more than $1b in retail sales. 

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Post holiday sales notwithstanding January is typically a soft period for the retail industry when compared to the results November and December holiday rush.  The monthly NPD numbers released last week, showed the skyrocketing returns for the gaming industry weren’t immune.  Hardware sales, in particular, were off but overall, there was plenty of value to be mined from the latest monthly results report from NPD.

Total U.S gaming sales were $1.18b in January, a 6% drop versus the same period a year ago (though that has largely been attributed to an extra week of reporting included in last year’s tally).  Taking into account the calendar adjustments, NPD notes that sales were up about 18% on a week by week accounting.

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Like a ball rolling down hill, HD DVD’s demise appears to be picking up speed and momentum.  Following on the heels of Netflix announcement, and similar news from Best Buy, now Wal-Mart too is dropping the format in favor of rival Blu Ray too.

Both on their blog and in a statement, Wal-Mart has acknowledged HD DVD will be phased out of their stores within a few months.

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The devil is in the details, they say.  That’s especially true with business rumors.  More often than not they start with a kernel of truth and then distort around the facts.   Last week, the rumor was Internet video site Revver was gasping for last breaths and on the verge of sale for a fraction of the $12.7m so far invested.  Speculation was that it might be had for as little as $500k plus the assumption of debt.  Now, correcting prior reports,   Newteevee is reporting the web video company did in fact sell but for a far less desperate price than originally speculated.

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