Wedbush Securities analyst Michael Pachter spoke at the Game Monetization USA Summit in San Francisco, and once again made some bold predictions about the future of the game industry. He pulled no punches as he evaluated the current state of affairs in the business, and he had some hard advice for a number of companies.
Pachter noted that more people are playing games on more devices than ever before, but he doesn’t think the console market will be growing. “I don’t think you’re ever going to see 500 million consoles out there,” Pachter said. For lifetime sales, Pachter expects the Wii U will ultimately sell 30 million “or fewer” units, the PS4 will sell 100 to 120 million units, and the Xbox One will sell 90 to 110 million units.
“The reason Sony beats Microsoft is solely the price,” Pachter noted. “Microsoft loses the next generation unless they cut price. If Microsoft drops its price to $399, I expect the sales to be equal to the PS4.”
The lifetime sales Pachter predicts compare to current sales of the PS3 and the Xbox 360 at about 80 million units apiece, but it’s far below some estimates of hundreds of millions of next-gen consoles. “I don’t know where they get those numbers,” Pachter said. He feels that at several hundred dollars, with games costing $60 or more, consoles are just too pricey to ever sell hundreds of millions of units.
The Wii U’s performance so far Pachter characterized as “underwhelming,” but noted it’s possible “but unlikely” that exciting new titles will reinvigorate growth. He believes that Nintendo is missing a huge opportunity to bring new gamers into their brands: Nintendo should put old GameBoy Advance content on phones and tablets for free, and charge $3 to $5 for more recent titles from the DS. Pachter feels this would generate enormous revenue for Nintendo and bring millions of new fans into their brands, and give them a strong way to sell newer titles on the 3DS and Wii U that use those brands.
“I don’t know why Iwata is still employed,” Pachter said, given that he refuses to take advantage of this opportunity while the handheld market continues to shrink and the Wii U has failed so far to catch on in a big way.
Pachter is more positive on the PlayStation 4 – “Sony thrives, Nintendo doesn’t” – saying it’s impressive as a game playing device. “The graphics are phenomenal, and the huge RAM makes future innovation likely,” Pachter pointed out. He noted that the multimedia features remain unclear, but the CPU power of the PS4 allows the potential for huge improvement in the future. As for the Xbox One, Pachter noted it’s impressive as a multimedia device, and the added features of Kinect and Skype give it additional value. “We’re sticking with our prediction of a built-in TV tuner” for the Xbox One, Pachter said, which would simplify the ability of the Xbox One to control your television viewing.
“The next generation of consoles is probably the last,” Pachter said. “We expect frequent model updates instead of new consoles.” Moreover, there’s going to be renewed interest in the PC, he predicted. “I think the PC is going to make a comeback, the PC will be the hub of all this stuff,” he stated. He feels Smart TVs are a dumb idea, noting that you don’t have a smart monitor connected to your computer. He envisions there will be a number of screens around the home, perhaps controlled by a tablet, being driven by a supercomputer in your pocket that we call a smartphone.
The Wii U gets a new system update from Nintendo. While details are a bit vague on what all the new system updates actually does, Nintendo says it “improves overall system stability” and also includes minor adjustments “to enhance the user experience”.
The update comes ahead of a planned Nintendo update for the 3DS that is scheduled to arrive next month. The 3DS update will bring the Miiverse to the 3DS as well as adds the ability to combine eShop balances on both the 3DS and Wii U systems. In addition it will add Network IDs to the 3DS to access the eShop. Apparently 3DS owners will not have to take advantage of using a NNID to combine their eShop purchases and will still be allowed to download software from the eShop without a NNID.
Rumors suggest that another system update for the Wii U is just around the corner, but will likely not arrive till early next year, unless Nintendo has a reason to release it sooner. On the software front, the Wii U is still struggling, but the recent sales boost has helped, but Nintendo needs strong sales for the Wii U this holiday season in order to help get published and developers re-engaged in developing for the console. Whispers suggest that Nintendo expects supplies of the Wii U to be plentiful this holiday season and does not foresee shortages like what has plagued the Wii consoles of the past. The problem is however that the lack of software will likely keep many buyers away.
Thousands of YouTube users have petitioned against the forced Google+ commenting system that recently appeared on the video sharing website.
Google’s forced Google+ commenting system first appeared on Youtube earlier this month in a bid to stop anonymous commenters from trolling about videos, and no doubt add more subscribers to Google’s not-so-popular social network.
It seems that Google’s plan has backfired somewhat, however. A petition has been launched calling for the new Youtube commenting system, which means users need a Google+ account to comment on videos on the website, to be reverted back to what it was before.
At the time of publication, the petition has over 113,000 signatures.
The petition reads, “Google is forcing us to make Google+ accounts and invading our social life to comment on a youtube video and trying to take away our anonymous profile. They are also trying to censor us unless we share the same worldview as they do.”
This online petition isn’t the only place that angry Youtube users are voicing their opinions on the revamped service. On the Youtube blog, where word of the new Google+ commenting was first announced, there are almost 2,000 comments from people who were not very pleased with the news.
One not very happy customer wrote, “Great, now I can’t laugh at the idiocy of trolls, converse in intelligent conversations, positively criticize, and not have to be forced to have Google+ to do anything. Seriously Google, shove this new comment system up your rear end.”
Another person who wasn’t pleased with the new commenting system is Youtube co-founder Jawed Karim, who broke the eight-year silence on his personal account to ask, “Why the fuck do I need a Google+ account to comment on a video?”
In 2011, 6% of traffic for the Google-owned video service came from mobile devices, but the figure is now 41%, CEO Larry Page said on Google’s quarterly earnings call.
The trend represents “great progress,” Page said on the call. Google and other online companies are trying to boost the advertising dollars they get from mobile devices as PC sales decline and people spend more time looking at smaller screens.
“We are closing in on our goal of a beautiful, simple and intuitive experience regardless of your device,” Page said in Google’s earnings announcement.
The 41% figure includes tablets as well as smartphones, a Google spokesman said.
But it’s not all roses for Google when it comes to mobile. The company also reported more anemic results from its Motorola handset business, which makes products like the Moto X smartphone. The unit’s sales for the quarter dropped by a third to $1.18 billion.
Google is focusing on marketing and distribution for the Moto X, CFO Patrick Pichette said during the earnings call. The Moto X is the first phone developed since Google bought Motorola Mobility for more than $12 billion last year.
Google reported total sales of $14.89 billion for the period ended Sept. 30, up 12% from the same quarter last year.
Three of the top 20 investors in Microsoft Corp are lobbying the board to push for Bill Gates to resign as chairman of the software company he co-founded 38 years ago, according to sources familiar with matter.
While Microsoft Chief Executive Steve Ballmer has been under pressure for years to improve the company’s performance and share price, this appears to be the first time that major shareholders are taking aim at Gates, who remains one of the most respected and influential figures in technology.
A representative for Microsoft declined to comment.
There is no indication that Microsoft’s board would heed the wishes of the three investors, who collectively hold more than 5 percent of the company’s stock, according to the sources. They requested the identity of the investors be kept anonymous because the discussions were private.
Gates owns about 4.5 percent of the $277 billion company and is its largest individual shareholder.
The three investors are concerned that Gates’ role as chairman effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes. In particular, they point to Gates’ role on the special committee searching for Ballmer’s successor.
They are also worried that Gates – who spends most of his time on his philanthropic foundation – wields power out of proportion to his declining shareholding.
Gates, who owned 49 percent of Microsoft before it went public in 1986, sells about 80 million Microsoft shares a year under a pre-set plan, which if continued would leave him with no financial stake in the company by 2018.
He lowered his profile at Microsoft after he handed the CEO role to Ballmer in 2000, giving up his day-to-day work there in 2008 to focus on the $38 billion Bill & Melinda Gates Foundation.
In August, Ballmer said he would retire within 12 months, amid pressure from activist fund manager ValueAct Capital Management.
Microsoft is now looking for a new CEO, though its board has said Ballmer’s strategy will go forward. He has focused on making devices, such as the Surface tablet and Xbox gaming console, and turning key software into services provided over the Internet. Some investors say that a new chief should not be bound by that strategy.
News that some investors were pushing for Gates’ ouster as chairman provoked mixed reactions from other shareholders.
“This is long overdue,” said Todd Lowenstein, a portfolio manager at HighMark Capital Management, which owns Microsoft shares. “Replacing the old guard with some fresh eyes can provide the oxygen needed to properly evaluate their corporate strategy.”
King.com Ltd, the British mobile gaming firm best known for its popular puzzle game ‘Candy Crush Saga’, has filed confidentially for an initial public offering (IPO) in the United States, a person familiar with the matter said on Sunday.
Online technology companies are rushing to the stock market on the backs of Twitter Inc’s announcement earlier this month that it plans to go public in the most eagerly anticipated IPO since last year’s flotation ofFacebook Inc.
Emerging growth companies such as King can use a secretive IPO registration process in the U.S. thanks to the Jumpstart Our BusinessStartups (JOBS) Act, which loosened a number of federal securities regulations in hopes of boosting capital raising and thereby increasing job growth.
King has hired Bank of America Merrill Lynch Corp, Credit Suisse Group AG and JPMorgan Chase & Co to lead the offering, said the person, confirming an earlier report by the Daily Telegraph and asking not to be identified because the information is confidential.
Representatives for King and the banks either declined to comment or did not respond to requests for comment.
King offers 150 games in 14 languages through mobile phones, Facebook and its website. It boasts more than 1 billion gameplays per day from its users.
The company’s games appeal to a growing trend for players to play puzzles with their friends in short bursts, especially as games are increasingly played on the move on phones or tablets to kill spare minutes.
Rival Zynga Inc went public two years ago in a high-profile IPO that raised $1 billion. Since then, Zynga has suffered from sagging morale during several quarters of worsening performance and repeated waves of layoffs.
Founded in 2003, King has been profitable since 2005 and has not had a funding round since September of that year, when it raised 34 million euros ($46.04 million) from investment firms Apax Partners and Index Ventures.
As time runs out for Intel to bring its Internet-based TV service by the end of the year, the outfit has approached Samsung and Amazon to ask them to lend a hand. Intel has asked about providing funding and distribution for the service. It looks like the set-top box project could be scrapped if a strategic partner isn’t found soon.
OnCue was supposed to allow users to watch live TV, on demand, and other offerings. Intel said it would provide the hardware and services directly to consumers and that the box would come with a camera that can detect who is in front of the TV. More than 300 engineers are working on the project under Erik Huggers, the head of Intel Media. A version of the service running on Intel hardware is testing with 3,000 Intel employees. Goodness knows what content they are running. Intel is having difficulty getting content deals.
Intel has yet to announce any TV programming partners, and Time Warner Cable and other cable TV providers have been pressuring channel owners to shun pacts with Intel and other Internet-based TV providers. Samsung, which ships millions of smart TVs, could distribute the service as a bundle, while Amazon could provide access to its growing library of movies and TV shows.
Bethesda’s Pete Hines had some choice words regarding Nintendo’s third-party strategy, suggesting that the time for getting better software support for the Wii U may have already passed.
In an interview with Game Trailers’ Bonus Round, Bethesda’s vice president of PR and marketing underlined the company’s commitment to making its games available on every platform – as long as those platforms don’t require compromise on the original vision.
As far as Bethesda’s games are concerned, that has led to their absence on Nintendo hardware despite their huge popularity. And Hines intimated that the situation is representative of Nintendo’s approach to third-party developers as a whole.
“The time for convincing publishers and developers to support Wii U has long past. The box is out,” Hine said, while sitting on a panel that also included Borderlands 2 lead writer Anthony Burch.
Hines pointed to Sony and Microsoft’s diligent and long-running efforts to communicate with third parties during the hardware design process as a better strategy for most developers.
“It’s not that every time we met with them we got all the answers we wanted, but they involved us very early on, and talking to folks like Bethesda and Gearbox, they say ‘here’s what we’re doing, here’s what we’re planning, here’s how we think it’s going to work’ to hear what we thought – from our tech guys and from an experience standpoint.
“You have to spend an unbelievable amount of time upfront doing that. If you’re just going, ‘we’re going to make a box and this is how it works and you should make games for it.’ Well, no. No is my answer. I’m going to focus on other ones that better support what it is we’re trying to do.”
This adds colour to comments Hines made in an earlier interview, where he stated that the Wii U was, “not on [Bethesda's] radar.” Nintendo is now attempting to address the Wii U’s less than admirable position by cutting $50 off its price.
Intel Corp’s media arm is opening offices in Los Angeles and New York as the company moves forward with an Internet television service that it plans to launch later this year, an Intel spokesman said last Friday.
Setting up shop in Los Angeles’ Santa Monica and New York’s Nolita brings Intel closer to the major TV networks and production studios that the world’s biggest chipmaker must strike deals with to gather content for its live and on-demand service, Intel spokesman Jon Carvill said.
Opening the offices is a sign that Intel is committed to moving ahead with the venture even though progress making deals has been slow. Some industry insiders have expressed doubts about Intel’s ability to successfully create a business to challenge traditional cable operators.
“It suggests that there’s an ongoing level of interest, maybe an incremental positive to their commitment,” said Cody Acree, an analyst at Williams Financial Group. “They have to continue down this path or there’s no hope of being successful.”
Intel plans to introduce the TV service, to be delivered through the Internet and a set-top box, this year in a phased rollout in regional markets, Carvill said.
In July, Intel Media hired Moe Khosravy, a cloud-computing expert who previously worked at Microsoft Corp and VMWare Inc, as head of software and user experiences. Intel has about 375 people working on the TV business, most of them based at Intel’s headquarters in Santa Clara, California.
Doubts about Intel’s commitment to the venture emerged in June after newly appointed Chief Executive Brian Krzanich warned he was taking a cautious approach to television, far from the company’s core business of chip manufacturing.
Some content providers have agreed with Intel about how their content would be distributed, but as of June the chipmaker had yet to sign any deals despite offering to pay sizeable premiums over traditional cable rates.
Carvill declined to comment on Intel’s negotiations.
Intel is not the only technology company trying to revolutionize the TV industry, where Comcast Corp, Time Warner Cable Inc and DirecTV are players and have much to lose from potential new entrants. Apple Inc, Google Inc and Amazon.com Inc are believed to be working on their own new TV services and products.
Media companies typically give better prices to operators with more viewers, such as large cable companies, and charge higher prices to smaller or newer entrants. Since Intel’s TV service has yet to start, it can expect to pay a premium.
While Intel has not said how much it plans to charge for its TV service, Intel Media head Erik Huggers has billed it as a premium product, with small bundles of channels and an attractive user interface rather than as a cut-rate option for consumers hoping to save money by canceling their cable subscriptions.
Nintendo president Satoru Iwata has attributed slow sales of the Wii U to the available games, rather than the price of the console, in his most recent interview.
“I understand that the real issue is the lack of software, and the only solution is to provide the mass-market with a number of quality software titles,” he told CVG.
“If the price is actually an issue [with Wii U], then there is some contradiction between the current sales balance between the Basic and Premium versions of the Wii U. The basic version should have sold a lot, but the fact of the matter is that people are buying more of the premium version. So the issue is not there.”
Last week a Nintendo representative confirmed that the Wii U console was still being sold at a loss, making it a price cut in the near future unlikely.
Recent financial results also revealed that in the past three months the machine had only sold 160,000 units worldwide.
Nintendo’s battle for Wii U support from third-party publishers isn’t just about the installed user base. It’s also about the system’s horsepower, according to Bethesda Softworks. Speaking with Joystiq at QuakeCon, Bethesda VP of PR and marketing Pete Hines explained the company’s absence from the system.
“It’s largely a hardware thing,” Hines said, adding that Bethesda’s plan is to “make the games that we want to make, on whatever platforms will support them as developed.”
The company’s slate of upcoming games includes The Elder Scrolls Online, Wolfenstein: The New Order, and The Evil Within. While Elder Scrolls Online is only being developed for the PC, Xbox One, and PlayStation 4, the other two games are also coming to the Xbox 360 and PlayStation 3. Hines wouldn’t rule out Bethesda eventually working on Nintendo’s console, but it’s clearly not a priority for the company.
“None of the game’s we’ve announced are being developed for the Wii U, so it’s guaranteed that none of those games are coming to Wii U,” Hines said. “Will any future ones come out? I can’t say for sure, in our near-term focus it’s not on our radar.”
Let’s get this out of the way up front. Yes, you never, ever count Nintendo out of the game.
That’s the go-to response for pretty much anyone in this industry when asked if the company will be able to dig itself out of the hole the Wii U has created – and it’s usually a valid one. (Think back to the GameCube days and things were just as dire as they seem today – but it managed to turn things around.)
But as we head into the Wii U’s second holiday season, the pessimism about the system is starting to crest. And despite Nintendo’s push of first party software coming in the next year, there’s nothing to suggest that a turnaround of any sort is imminent.
Third party partners are, in a word, disappointed with Nintendo. And while you’ll still hear the usual refrain about not giving up on the company at some point, you’re more likely to hear dissatisfaction when you speak with executives.
Yves Guillemot, Chairman and CEO of Ubisoft, is typically one of the biggest proponents of new systems, but betting big on the Wii U didn’t work out well for the company. ZombiU, one of the most popular launch titles for the system with players, was not profitable, he says. Not even close. As such, he says, there are no plans (or even desire) for a sequel.
“It seems like a box that’s out of sync with the future of EA – which is one that gives a real social feel to our games. The Wii U feels like an offline experience right now”
It was, in fact, because of that game’s performance that Ubisoft decided to make Rayman Legends a multiplatform game.
“We must find a way to ensure the creativity of those games could have a big enough audience,” he says. “We hope it will take off. At the moment, we’ve said ‘let’s do through Christmas and see where we are from there.’”
Activision, also, was a notable launch partner for the Wii U, but like Ubisoft, the results haven’t been strong enough to justify a notable further investment in the system.
“We came to the table with a robust slate,” says Eric Hirshberg, president and CEO of Activision Publishing, at E3. “But we have no announcements now.”
No one, however, is more direct than EA’s Peter Moore. EA, at present, has no games in development for the Wii U – and its AAA game engine isn’t compatible with the system.
“We were there with four games for them [at launch],” he says. “It’s been a disappointment when you look at sell-through and, as a company, we have to be very judicious where we deploy our resources.”
For EA, at least, it’s the system’s lack of a rich multiplayer environment that’s one of the big concerns – especially for sports titles. (That’s part of the reason Madden won’t appear on the system this year.)
“The lack of online engagement that we see on Wii U [is troubling],” says Moore. “It’s so integral to what we do. They’re so small it’s hardly worth running the servers. It seems like a box that’s out of sync with the future of EA – which is one that gives a real social feel to our games. The Wii U feels like an offline experience right now.”
Nintendo systems have always been led by the rich slate of first party titles, but the company isn’t an island – and knows it can’t remain competitive without the cooperation of third party publishers. And while some, like Capcom, are sticking with the Wii U, even Nintendo admits it needs to woo back its publishing partners by boosting sales.
Rather than focusing on the negativity surrounding the platform, Nintendo itself says it’s making software development its primary focus. With no price cuts on the horizon (something global CEO Satoru Iwata has been very insistent about), it realizes that the only way to boost hardware sales is to come up with a must-have game. And while the company is counting on Mario Kart and Super Smash Bros. to do their part, it realizes that those alone won’t convince people to invest in the system.
“We have been unsuccessful in coming up with one single software with which people can understand ‘OK, this is really different’ and I can understand the real value of that as soon as I saw that,” says Iwata. “Because there’s no software that’s simple and obvious for people as ‘Wii Sports’ for the Wii, potential consumers do not even feel like trying to touch the Wii U. Our challenge today is with the software lineup we are introducing now; we have to encourage them to want to experience the Wii U in the first place.”
The problem is: That game’s not coming out this holiday, based on what the company showed at E3. And if the Wii U tanks for a second holiday in a row, it’s going to be that much harder to get publishers back on board.
Electronic toy maker Nintendo’s CEO Satoru Iwata thinks that the reason that the toilet themed Wii U console didn’t sell was because of poor marketing.
Talking to CNBC, Iwata said that the outfit had relaxed its marketing efforts, so the consumers today still cannot understand what’s so good and unique about the Wii U. After all few people told “You Wii” will do so without someone turning a tap first. He said that Nintendo had been unsuccessful in coming up with one single software with which people can understand.
People who have hands-on experience can appreciate the value of the Wii U, but because there’s not software that’s simple and obvious for people as ‘Wii Sports’ for the Wii, potential consumers do not feel like trying it. The Wii U console sold 3.45 million units worldwide for the 2012-13 fiscal year, which ended March 2013.
Nintendo cut its Wii U sales forecast in January as a result of lower-than-anticipated sales. Expectations were set for 4 million units sold, down from an initial target of 5.5 million.
The use of radio frequency tech in remote controls for everything from smart TVs and BluRay players to gaming devices will enjoy a huge increase as compared to devices with infrared-based controls.
Fewer people will have to point their remote controls at televisions as nearly one-fifth of all remotes will feature wireless radio frequency (RF) technology by 2018, according to a new report.
The report, from IMS Research, says that about 450 million RF remote controls will ship between 2013 and 2018, with the percentage of RF remotes reaching up to 18% of all such in five years.
IMS’s report also points out that RF technology will enable many advanced technologies not available with current infrared-enabled remotes, including voice and gesture control.
“One of benefits is out-of-line and sight communication and control. So you don’t need to point your remote at the TV anymore,” said Philip Maddocks, connectivity analyst for IHS. “People are used to doing that with infrared but with an RF remote that’s not the case.”
Smart and web-connected televisions, with their more sophisticated user interfaces, will also be much easier to navigate with RF, Maddocks said.
“You have the enhanced bandwidth with RF technologies as opposed to infrared. So you can incorporate things like gesture-based controls where you can twist the remote clockwise to turn the volume up and turn it counterclockwise to turn it down,” Maddocks said. “You can also incorporate voice based controls as well”. RF-based remote controls will also feature technologies like Bluetooth Smart (a.k.a., Bluetooth low energy/Bluetooth v4.0),ZigBee RF4CE, or low-power Wi-Fi, he said.
There is a big difference between the current Bluetooth 2.1 specification found in most products and the upcoming Bluetooth 4.0 spec, which is expected out in June, Maddocks said. Bluetooth 2.1 drains so much power from a remote that the battery typically must be changed every couple of months. Bluetooth’s low energy usage would extend the battery lifespan by a couple of years, Maddocks said.
On the other hand, low-power WiFi (a.k.a. WiFi Direct), being offered in Roku set-top boxes today, offers throughput of up to 21Mbps compared with Bluetooth’s 2Mbps, but it uses a great deal more power than BlueTooth v4.0, Maddocks said. So there are tradeoffs.
While RF technologies can provide a wealth of additional benefits for control functionality, an overwhelming majority of remote controls will still use IR in 2018, projections show. The IR technology is familiar to consumers, which tend to choose the technology they’re comfortable with, and IR-based remote controls are also less expensive to manufacture.
A day that SEGA fans thought would never come has arrived: SEGA has entered into a deal with Nintendo where Nintendo consoles will get the next three Sonic the Hedgehog titles as platform exclusives. The once bitter rivals are calling this a “worldwide partnership,” which despite being a bit short on details apparently leads us to believe that SEGA will be developing additional new software for the Wii U and 3DS consoles going forward.
The next three Sonic titles will include Sonic: Lost World, Mario & Sonic at the Sochi 2014 Winter Olympic Games, and a third unannounced title that the company is expected to officially announce at E3. The reason for the Sonic exclusive deal has to do with the past performance of Sonic titles on Nintendo consoles, and since they have proven to be good sellers, the deal does seem to make a lot of sense for both companies.
What is more interesting, however, is the other aspects of the partnership that will see additional titles developed for the Wii U. Nintendo needs all of the software support it can get for the Wii U, and just getting SEGA to continue to release new titles for the Wii U is a good thing. Sources tell us that SEGA has some new Wii U titles planned for announcement at E3, but it isn’t known exactly what SEGA might be cooking up.
While a big deal with Activision or Take-Two is really what Wii U owners might want, at least getting SEGA to continue producing Wii U titles is a positive news thing. It does remain to be seen, however, if SEGA can deliver the kinds of titles that will be successful sellers on the Wii U when so many owners are looking for the big titles from some of the other publishers.