Saturday, July 28, 2007

'Blu-ray' of hope for PS3

Sony's next-generation DVD format 'Blu-ray' seems to emerge as the winner of the format war against rival standard 'HD-DVD', providing some ray of hope for Sony's troubled PlayStation3. According to reliable media reports, retailers BJ´s and Target have decided to exclusively switch to the Sony format.

Rumours that the biggest US-American retail chain Wal-Mart had ordered millions of low-priced 'HD-DVD' units have not materialized and may be seen as increasingly unlikely in light of above news.

'Blu-ray' was Sony's biggest gamble with the PS3. There was no doubt in my mind that if 'Blu-ray' would fail, the PS3 would follow. Consumers may have bought the PS3 regardless of the DVD format's success (they did not up until now), but it would have been a disastrous scenario for Sony. The DVD drive is the single most expensive component in the machine.

So far, 'Blu-ray' has not proved to be much of an incentive. But with the format gaining significant momentum, that may soon change. The question is whether that incentive will be strong enough for the PS3 to get anywhere near its competitors, each having sold around ten millions units already.

Also, beating 'HD-DVD' is just the first step to success. After that, the boss fight would be between 'Blu-ray' and traditional DVDs. And it is far from clear to me that the majority of consumers are willing to upgrade their entire setup for a few more pixels (twice the amount, at best).

Nevertheless, Sony executives can sleep a little less troubled these days. The PlayStation3 actually seems to finally have a solid unique selling point.

EDIT According to Engadget, Target is still committed to ´HD-DVD´. Thanks to M. Ferreira and Anonymous for the tips.

Sources: Video Business, Reuters (via Yahoo News)
Thanks to: Joystiq, Joystiq

Thursday, July 26, 2007

Wii´s ´last secret´ to be revealed in September?

Nintendo of America president Reginald Fils-Aime has hinted at a surprise announcement regarding the Wii within two months, according to Infendo, who do not name a source.

Reggie Fils-Aime hinted at a “good” Wii surprise coming our way in September, but didn’t really say much more than that. Which is a shame, because I thought he and Blake were BFFL after E3.

What we know: It’s not the Mii popularity contest Channel, as he mentioned that in the same interview where he said there’s a surprise inbound to the Wii.

What we don’t know: Everything else.

There have been numerous rumours regarding a ´last secret´ to the Wii. Please read the commentary to this post for a good summary. Please appreciate that the post was written before the console´s launch and has not been updated.

To sum it up, Reggie originally promised that a secret would be revealed around launch. He later backed away from those claims.

So did Reggie perhaps promise the unveiling of the secret too early, retracted from that promise ... and now it is time to finally deliver? More importantly, where did Infendo get the quote from?

EDIT The quote is taken from Spike´s Gamehead interview, embedded below (the quote is 2:20 minutes into the interview).

Source: Infendo
Thanks to: Anonymous, Game On, Cheswick

Sunday, July 22, 2007

Wii gets massive third-party support

Wii has started to receive massive support from third-party publishers over the last month. Gaming Target has accounted for a significant jump in announced exclusive titles for the platform.

In the same timespan in which five and three more exclusive titles have been announced for Xbox360 and PS3 respectively, 37 new exclusives have been announced for Wii. This is what it looks like:

Xbox360: 96 (+5 from last count: 47 released, 49 announced)

PS3: 47 (+3 from last count: 8 released, 39 announced)

Wii: 113 (+37 from last count: 23 released, 90 announced)

I previously looked at the figures in May and June. The site seems to be highly reliable, although they do count a few titles that will never make it to retail, I believe. Please read the commentary to the former entry for details.

Of course, it is important to see things in perspective. Quantity does not rule over quality. But, nevertheless, this development shows an interesting trend in publishers allocating their resources towards Nintendo, as Gaming Target puts very well.

The Wii has proven to be the new king of the exclusive. Now, it would be dishonest to somehow imply that Wii exclusives like Ultimate Duck Hunting, Furu Furu Park, Hannah Montana: Spotlight World Tour and Action Girlz Racing match up with some of the games that dot the Xbox 360 and PS3 lists.

It’s also wrong not to acknowledge that many non-exclusive third-party games that are coming to both the 360 and the PS3 will never make it to the Wii in any form, so the Wii loses out. But it’s not hard to connect the dots and see that publishers have flipped their perceptions of the three consoles and their console identities are beginning to take shape.

Source: Gaming Target

Xbox360 sales drop 60%

Sales of Xbox360 consoles have dropped by 60% in the fiscal fourth quarter, InformationWeek writes (via Yahoo News), citing Microsoft Investor Relations information.

In its earnings statement for the quarter, Microsoft said it shipped 700,000 Xbox 360 units during the period, compared to 1.8 million in the fiscal fourth quarter of 2006 -- a fall off of 61%.

Microsoft's Xbox operations are housed within the company's Entertainment and Devices Division. The group saw fourth quarter revenue drop 10% year-over-year to $1.16 billion on an operating loss of $1.20 billion. The group lost $423 million the previous year.

Recently, Microsoft owed up to the Xbox360´s failure rate being "unacceptable", extended the warranty to 3 years and reserved more than one billion US dollars to cover repair costs. Altogether, the Xbox division incurred losses of around six billion US dollars.

Subsequent to the announcement, Microsoft´s senior vice president of interactive entertainment business, Peter Moore, left the company to head EA Sports.

When I asked Peter Moore about a possible price drop for the Xbox360 at X06, he shrugged off the suggestion with that confidence bordering on arrogance that had become his trademark. Undoubtedly, his departure is as big a loss to the Xbox division as it is untimely.

The only other high level executives to leave the Xbox team were Ed Fries in 2004 and Kevin Bachus in 2001 - and neither possessed Moore´s charisma. We may think of his tattooed PR messages as embarrassing and corny. But the message got across and that is what counts in his business. Nevertheless, there are rumours surrounding Moore´s departure.

There is a question as to "whether the story presented by Microsoft was accurate," said Van Baker, an analyst with industry research firm Gartner. He said that, because the departure came not long after Microsoft's announcement about Xbox hardware failures, "you wonder if he was pushed."

Other experts believe that Moore´s departure will actually have a negative impact upon the Xbox360´s success, at least in the short term.

Geoff Keighley, host of Spike TV's Game Head series, agrees. "This is a huge loss for Xbox. … Gamers will no doubt wonder what this means for the future of the platform. Xbox 360 will be fine. Peter's not the visionary behind the platform, but he was the voice and the soul of that whole division of Microsoft and the public cheerleader. Xbox will continue on without Peter, but I have a feeling that his departure will knock some wind out of the platform. … It's shocking to see him leave right before Xbox heads into the biggest holiday season ever. He's spent years building up for this fall with a remarkable lineup of games and now he won't be around to 'finish the fight' as they say in Halo 3."

Moore, who officially joins EA on Sept. 1, wanted to move back to the San Francisco bay area, says EA spokesman Jeff Brown. (...) "Another thing that makes Peter particularly attractive is that during his time at Microsoft nobody as mastered online like (the company did)." Wedbush Morgan Securites' Michael Pachter called EA's acquisition of Moore "a significant positive for EA."

Microsoft beat Sony and Nintendo to market and certainly established their platform with more than ten million units sold. But at what cost? Sales are slowing down massively as the hardware defects become an ugly stain on Microsoft´s reputation.

Wii has narrowed the gap to less than a million and is poised to claim the number one spot in a matter of months, certainly within the year. And Microsoft has had only multi-billion dollar losses to show for its brave venture into the home console market.

Of course, there are some fantastic Xbox360 games around the corner which may yet help the Xbox out of the reds for the first time. But still, adding up all the prospective profits and very real losses, Microsoft should seriously consider leaving the hardware business after their second console´s lifetime is over. In fact, I would be very surprised to learn that they are planning a third Xbox.

Sources: InformationWeek (via Yahoo News), NewsFactor (via Yahoo News), USA Today (via Yahoo News)
Thanks to: Some Guy

Wednesday, July 18, 2007

´Table Tennis´ coming to Wii

´Rockstar Games presents Table Tennis´ is coming to the Wii. The release date is given as this Fall, according to a recent press release by Take 2 Games.

Developed by Rockstar Leeds in collaboration with Rockstar San Diego, Rockstar Games presents Table Tennis is the perfect Wii gaming experience. Feel the unmatched speed and intensity of the real-life sport with an authentic physics engine and intuitive gameplay that mimics the exhilarating experience found in international competition. (...)

"Ever since we released Table Tennis, fans have been asking us to create a Wii version," said Sam Houser, Founder and Executive Producer of Rockstar Games. "By bringing Table Tennis to the Wii and utilizing the motion-sensitive Wii Remote™, a new audience can now experience a game that is beautifully designed and impossible to put down."

I exclusively revealed this information two-and-a-half months ago (the story being picked up by other media like GoNintendo and Nintendo Wii Fanboy, as well).

Sorry for being smug about this, but when this humble site beats all the big boys to such exclusive information, I think it´s time to be smug. Not that I didn´t beat them before. Okay, I am sorry. I´ll stop.

Also, it is important to point out that the game runs on the ´RAGE engine´, which also powers ´Grand Theft Auto IV´. Will that game also be heading to Wii, I wonder?

Source: Take 2 Games
Thanks to: Joystiq

Wednesday, July 11, 2007

E3 2007: ´Wii Zapper´ and ´Wii Fit´ introduced

Nintendo announced two new accessories for the Wii, the ´Wii Zapper´ and the ´Balance Board´ to be used with ´Wii Fit´. Here are some pictures and videos of both from Nintendo´s E3 2007 press kit, along with some other stuff.

Wii Zapper

Wii Fit

´Metroid Prime 3: Corruption´ (Launch: 27th of August 2007)

´Super Mario Galaxy´ (Launch: 12th of November 2007)

´Super Smash Bros. Brawl´ (Launch: 3rd of December 2007)

´Fire Emblem´ (Launch: 5th of November 2007)

Sadly, the Nintendo E3 2007 press kit (password required) contains no more reference to ´Project H.A.M.M.E.R.´, so the rumours appear to be true: ´H.A.M.M.E.R.´ got the axe.

Source: Nintendo E3 2007 press kit (password required)

Tuesday, July 10, 2007

´Metal Gear Solid 4´ no longer PS3 exclusive?, part VI (final)

Konami is considering publishing ´Metal Gear Solid 4´ not just for the PlayStation3, Reuters reports. Their article cites Kazumi Kitaue, head of Konami's North American and European operations.

Kitaue said Konami may need to expand the target hardware for its blockbuster fighting game Metal Gear Solid, which has so far been developed for Sony's PlayStation machines, to other consoles in the future to recoup development costs.

"Since Metal Gear Solid was born for the PlayStation, we would like to keep it a PlayStation game. But we might have to take some steps," Kitaue said. (...)

Following Kitaue's comments, shares in Sony closed down 1.1 percent at 6,460 yen on Tuesday in Tokyo, while Konami, known for such games as Dance Dance Revolution and Pro Evolution Soccer, gained 0.9 percent to 2,940 yen.

Kitaue also questioned whether the PS3´s recent price cut would be able to get Sony out of third place.

I wonder if Sony can win back user support by the price cut of just $100. I don't expect a substantial impact ... With $500, you can buy a personal computer.

Parts one through five of the never-ending saga regarding ´Metal Gear Solid 4´ going multi-platform have been posted with a ´rumour´ tag. It has finally come to the point where the story is legitimate news.

I am sure that we can overlook the significance of the little word ´might´ in above quote. Japanese rarely say no directly (いいえ), but usually substitute it by saying something is difficult or different (ちがいます). Also: why else would a Konami executive raise this matter in an interview with Reuters if it had not already been decided behind closed doors?

It is also interesting that the executive connected the question of ´MGS4´ exclusivity to the PS3´s price cut. In my mind, Konami had been considering taking the game multi-platform for some time, but waited to learn the full scale of Sony´s price cut. Unsatisfied with it, they went public with this news.

I have consistently predicted that this will happen and it did, albeit unexpectedly. Mark my words, this will also happen to the last big third-party exclusive the PS3 has left. ´Final Fantasy´ is going to be next.

In terms of driving hardware sales, a multi-platform ´Metal Gear Solid 4´ is going to hurt Sony a great deal more than ´Final Fantasy´, though, I believe. While the ´MGS´ series may not have sold as many units (it also has not seen as many instalments as ´FF´, to be fair), only this one has huge potential in all three major territories. In Europe, ´Final Fantasy´ is sadly associated by most people with the CGI movie.

For a good summary of most other past rumours concerning this topic, please read ´Metal Gear Solid 4´ no longer PS3 exclusive?, part IV.

EDIT John Yamamoto, president and CEO of European and North American operations at Square Enix, has refused to comment on the exclusivity status of ´Final Fantasy´, speaking to Games Industry.

What about PlayStation 3? Konami has said that they're concerned Sony's planned price cut isn't enough, and hinted that Metal Gear Solid may not always be a platform exclusive...

We're watching the hardware trends closely and also the marketing strategy of the platform holders. I think USD 500 for PS3 is still a bit expensive for most gamers. Most of them think that price is still high. (...)

If sales don't pick up, if Sony doesn't cut the price further, would you - like Konami - reconsider making Final Fantasy exclusive to PlayStation 3?

When it comes to platform strategies I talk with the entire group, so maybe I'll avoid answering that.

[At this point, a Square Enix spokesperson added "At previous E3s and other shows we've announced different Final Fantasies for different platforms, and I think that will continue."]

EDIT So much for this being the final episode in this saga. First, Sony says that ´MGS4´ will launch "only on PlayStation 3" at their E3 press conference. And now, the Official Xbox Magazine apparently knows about an Xbox360 version.

I stand by my prediction that the game will not be exclusive to the PS3. Konami would be insane to tie this multi-million dollar project down to a console that has sold less than four million units and whose low tie ratio promises only a small share from a small user base.

It is funny, however, that everyone seems to infer that Konami´s comments about making ´MGS4´ available on other consoles can only mean that it may be heading to Xbox360 and nothing else. From a business point of view, Wii may be a much more attractive platform, if not in terms of hardware power.

EDIT Now, CVG have come across an HMV page, offering pre-orders for both the PS3 and Xbox360 versions, as well as giving release dates.

Metal Gear Solid 4 will apparently be available from April 18, 2008 on PlayStation 3 only according to the listing. Then, just over five months later, the Xbox 360 will be blessed with Solid Snake's presence on September 26.

Source: Reuters
Thanks to: Joystiq, Kool.K

Monday, July 09, 2007

Sony cuts price of 60GB PS3 in the US by $100

Sony Computer Entertainment has announced that they will cut the price of the PlayStation3´s 60GB model by $100 to $499. Additionally, an 80GB model will be introduced for the price of $599. Here is an excerpt from their press release (PDF document).

Beginning in August, the new PS3 model will be available in North America for a suggested retail price of $599/$659 CND and will be sold with the popular online-enabled racing game MotorStorm™. In conjunction with this news, the company also announced that effective immediately, the current 60GB PS3 model will be available in North America for $499/$549 CND, or $100 below the original launch price.

There are two ways of interpreting this move. It can either be seen as a $100 price drop alongside the introduction of an upgraded SKU. Or, and I prefer to see it like that, it can be seen as a simple hardware upgrade. No more.

I am sure that many of the more casual customers will not even notice the price cut once those two models hit stores. From the start, there were two PS3 SKUs and they were priced at $499 and $599, respectively. That has not changed.

Sony should have reintroduced the 20GB model and sold that for $399, if you ask me. But that would have made even less financial sense. They canned the 20GB model because they were losing $300 with each unit sold, while ´only´ losing $240 per 60GB unit.

I really do not see this move as much of an incentive to buy a PS3. Very few people will settle for anything less than the premium version (the Xbox360 SKUs have taught us that lesson, if anything). And the premium model´s price simply has not changed.

Source: SCEI press server (PDF document)
Thanks to: Some Guy

Friday, July 06, 2007

Microsoft reserves more than $1 billion for Xbox360 repairs

Microsoft announced that it will reserve between $1,05 billion an $1,15 billion to cover repairs of faulty Xbox360 consoles up until now and to extend the worldwide warranty to three years.

In a press release, the company admits to an intolerable amount of defective units.

As a result of what Microsoft views as an unacceptable number of repairs to Xbox 360 consoles, the company conducted extensive investigations into potential sources of general hardware failures. Having identified a number of factors which can cause general hardware failures indicated by three red flashing lights on the console, Microsoft has made improvements to the console and is enhancing its Xbox 360 warranty policy for existing and new customers.

Microsoft stands behind its products and is taking responsibility to repair or replace any Xbox 360 console that experiences the “three flashing red lights” error message within three years from time of purchase free of charge, including shipping costs.

The money will be taken out of the pre-tax earnings for the last financial year which ended last month.


The recent debate started when technology news site Daily Tech reported that up to one third of all Xbox360 consoles were being returned to stores as defective. The site cited anonymous managers at retail outlets such as EB Games or GameStop. As unlikely as this figure sounds, other polls showed similar results.

Prior to that, the independent UK repair service Micromart had announced it would no longer accept Xbox360 consoles, calling the hardware defects ´endemic´. Company spokesman Geoff Croft told me that the main problem appeared to be the lead-free solder Microsoft used, probably in order to make production more environmentally friendly. In difference to standard solder, this one dries and gets brittle easier. This creates dry joints and the contacts on the boards become insecure, Croft told me.

Is really every third console faulty?

Of course, Microsoft is saying nothing. In the conference call, Bach only spoke of a "meaningful number" and that they "identified several factors" that contribute to the hardware failures.

But there is a way to double-check the findings of the surveys above. Analysts estimate that the $1 billion would be enough to repair around 2,5 million consoles. With around 10 million units sold, that amount would already suggest that Microsoft is counting on fixing every fourth console.

And that does not count out the possibility of Microsoft expecting an even higher number of faulty units. They simply might not want to allocate the entire amount right now, for various reasons. Either way, the estimate of ´up to a third´ of all units failing does not seem to be too far from the truth.

$1 billion hurts

Contrary to popular belief, $1 billion is a significant amount for Microsoft. For the financial year that just ended, Microsoft posted an operating income of $16,5 billion.

Here is a detailed list of the various divisions and their individual performance, prior to the internal change in the company´s operating segments and compliant with the ´U.S. Generally Accepted Accounting Principles (GAAP)´.

Division / Operating income 2006 / 2005 / 2004
(in millions)

Client $10.203 / $9.464 / $8.740

Server and Tools $4.323 / $3.291 / $1.474

Information Worker $8.285 / $8.025 / $7.458

Microsoft Business Solutions $24 / -$171 / -$291

MSN -$77 / $412 / $98

Mobile and Embedded Devices $2 / -$65 / -$237

Home and Entertainment -$1.262 / -$485 / -$1.337

Corporate-Level Activity -$4.988 / -$5.871 / ---

As if losses of $5 billion weren´t enough

So the Home and Entertainment division is the only one that has been consistently in the reds since 2004. In fact, it has been in the reds ever since its creation. In 2002 and 2003, that division cost Microsoft 874 and 924 million, respectively.

If you add that up, this division has incurred a staggering total loss of almost five billion dollars ($4.882 millions to be precise) since 2002.

Prior to 2002, the Xbox was part of the then Consumer Software, Services, and Devices division and even that one has been in the reds ever since 2000.

Bear in mind that an analyst already called Microsoft´s Xbox enterprise a disaster back in April, way before the scale of the console defects became apparent.

Gaming has been a disastrous endeavor for Microsoft, particularly from an investment perspective.

So the $1 billion or so discussed here will almost double the losses incurred by the Home and Entertainment division in 2006. And that sum will deduct around one sixteenth of the entire company´s operating income for that year.

Will Xbox ever become profitable?

So we just learnt that Robbie Bach´s division has now lost Microsoft a total of around $6 billion - pretty much one dollar for each person living on this planet. But when will they become profitable? Will they ever?

Bach was still pretty confident in May, speaking to eWEEK:

It's a business that will be profitable next year—we'll make money next year and that will be the first time, which is pretty exciting. And then the next two or three years are the place where you need to make tracks, and the next two or three years are where you have to make money.

The big question is whether Microsoft is still on track to reach the goal of profitability by 2008. And, perhaps, nothing has changed. The money is coming out of last year´s wallet, so to speak. The current financial year may remain largely unaffected, one might think.

But there are some things Microsoft should be concerned about. After sinking a total of $6 billion, should the shareholders not be ready to revolt by now and demand Microsoft´s withdrawal from the videogame industry? What if the allocated sum is not enough to cover the entire costs of repairs and this whole affair eats even deeper into Microsoft´s profits? What will the shareholders do then?

Of course, after investing billions and billions into an enterprise like this one, you would be desperate to see some returns. You would grind your teeth and bear it. But you would not tolerate another slip-up. I am merely suggesting this: What if this was that very slip-up?

Source: Microsoft Presspass

Monday, July 02, 2007

German industry event ´Games Convention´ to relocate for 2008

Europe´s biggest computer and videogame trade show, the German Games Convention, will relocate for 2008, several industry insiders have told me in confidence.

Until now, the event has been held in Leipzig every August. But, apparently, several large exhibitors are unhappy with the location and are pushing for the show to relocate. Leipzig has a modern site with five halls and additional outdoor space. But the city is hard to reach. Leipzig only has a small airport and is located in the east of the country.

It appears that no definite decision has been made about the new location. Several cities are said to be in the running, however, with two cities mentioned as the most likely to inherit the event.

Frankfurt is home to the world´s third largest venue for trade shows and hosts the book fair and the automobile show, both of which are the world´s largest.

Cologne boasts the world´s largest photographic and imaging fair, as well as the most important furniture fair.

The ´Games Convention´ took place for the first time in 2002. The dates for this year are 23rd to 26th of August.

EDIT The local government of the state of Hesse has openly thrown their weight behind Frankfurt´s bid for the ´Games Convention´. At the Gameplaces event, Minister Volker Hoff said that Frankfurt was the ideal location for the large trade show, as German technology news service Heise reports.

Hoff pointed to the airport (the world´s eighth-largest in terms of passenger count) and the fact that many studios and publishers are located nearby. Indeed, here is the impressive list:

Nintendo of Europe in Großostheim and Frankfurt
Sony Computer Entertainment Germany in Neu-Isenburg
Atari Germany in Frankfurt
Konami Germany in Frankfurt
Sunflowers in Heusenstamm (´Anno 1701´ aka ´1701 A.D.´, ´ParaWorld´)
10Tacle in Darmstadt (´Elveon´, ´GTR´)
Crytek in Frankfurt (´Far Cry´, ´Crysis´)
Related Designs in Mainz (´Anno 1701´ aka ´1701 A.D.´)
Deck13 in Frankfurt (´Ankh´, ´Jack Keane´)
Keen Games in Frankfurt (´Anno 1701´ for DS, ´Secret Files Tunguska´ for Wii)

The article continues with a rebuttal on behalf of the ´Games Convention´ owners, the Messe Leipzig. According to the company´s boss Wolfgang Marzin, the industry fully supports Leipzig. "We know from the industry that the current concept is the only viable one for the GC and that one belongs to Leipzig." Well, that is not what the industry told me. Remember where you read this story first.

Thanks to: Kotaku, Joystiq

Wii outselling PS3 in Japan six to one

Nintendo´s Wii console is further gaining momentum, currently outselling the PlayStation3 at a ratio of six to one in Japan, Reuters reports (via Yahoo News).

Nintendo Co. Ltd.'s Wii game console outsold Sony Corp.'s PlayStation 3 by a ratio of over 6 to 1 in June in Japan, a game magazine publisher said, solidifying Nintendo's leading position.

Nintendo sold 270,974 units of the Wii in the four weeks ended June 24, compared with 41,628 units for the PS3 and 17,616 units for Microsoft Corp.'s Xbox 360, according to data from Enterbrain.

The Wii's lead against the PS3 was 4 to 1 in April and 5 to 1 in May.

Source: Reuters (via Yahoo News)