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ArchivesReport: Video Game Sales Up 21% to $4.1 Billion in First Half of 2005Authored by Mark Hefflinger on July 29, 2005 - 7:11am.
Port Washington, N.Y. -- Titles for new handheld game systems from Sony and Nintendo helped drive video game industry sales up 21% to $4.1 billion in the first half of 2005, compared with $3.4 billion during the same period last year, according to a report from market research firm NPD Group. Losing ground were game consoles, which saw a 6% sales decline, from $631.6 million last year to $594 million in the first half of this year, and PC games, whose sales revenues were down 10.5%, to $405.4 million. Overall, however, video game sales for consoles, handhelds and the PC were up 9.2% to $2.8 billion; the top-selling title for the period was Sony's "Gran Turismo 4." Driving game sales were titles for Sony's PSP and Nintendo's DS and Game Boy handhelds, which were up 81% in the first half of 2005; handheld hardware sales also grew 74%. "The robust performance of the portable market certainly contributed to the considerable sales growth of the industry but another significant contributor to industry performance is software," said NPD analyst Anita Frazier.
Senate Pushes File-Sharing Firms to Stem Piracy, Filter PornographyAuthored by Mark Hefflinger on July 29, 2005 - 7:09am.
Washington -- Senators at a Commerce Committee hearing on Thursday urged peer-to-peer software companies to act to stem piracy and children's access to pornography, or else Congress may enact new legislation against them. Commerce Committee chairman Sen. Ted Stevens (R-Alaska) and Sen. Barbara Boxer (D-Calif.) both indicated that peer-to-peer firms must act to filter content, even in the wake of a Supreme Court decision (MGM v. Grokster) that makes peer-to-peer firms liable for copyright infringement committed by end users. "If you don't move to protect copyright, if you don't move to protect our children, it's not going to sit well," Sen. Boxer said, at the hearing. "We're going to get specific about this, pornography over the Internet. People tell me we can't do anything about it. I don't believe that," said Commerce Committee chairman Stevens. Representing file-sharing companies at the hearing was Adam Eisgrau of P2P United, who warned of "very serious social, scientific, educational and all kinds of ramifications" if Congress restricts peer-to-peer technology. Eisgrau also argued in favor of voluntary collective licensing of copyrighted works for peer-to-peer networks, and for a lowering of the current $150,000-per-instance sum that copyright holders can claim as damages for infringement.
Canada's Supreme Court Upholds Ban on "iPod Tax"Authored by Mark Hefflinger on July 29, 2005 - 7:07am.
Toronto -- The Canadian Supreme Court this week declined to hear an appeal of a ruling that set aside a tax on iPods and other digital music players, which would have set aside funds to offset any potential losses to copyright infringement posed by the devices. Canada also charges a tax on blank CDs, which provides rights holders with about 2.8 cents per "lost sale" due to potential music CD copying. The ruling was praised by the Canadian Recording Industry Association (CRIA), which believes it clarifies that unauthorized file-sharing is an illegal activity in Canada. An earlier decision, which many viewed as legitimizing unfettered file-sharing in Canada, referred to the iPod tax as just compensation for any losses from file-sharing. "For years, those supporting unauthorized file sharing have misleadingly used the existence of the Private Copying Levy to justify illegitimate file sharing," said CRIA president Graham Henderson. "Today, the Supreme Court says 'no such luck.'"
Screen Actors Guild Members Vote to Accept Video Game ContractAuthored by Mark Hefflinger on July 29, 2005 - 7:05am.
Los Angeles -- Actor members of Hollywood's Screen Actors Guild (SAG) have voted to approve a new contract covering their appearances in video games, the group announced on Friday. SAG members voted 81% in favor of the contract; a previous member vote approving the contract was nullified by an overriding vote by SAG's national executive committee. The new contract provides higher wages and more comprehensive benefits for video game actors, but denies their demands for residual payments based on game sales. A similar contract was approved in June by another actors' union, the American Federation of Television and Radio Artists (AFTRA). "By voting for this contract, SAG members have achieved major gains despite the fact that we were not able to win in the area of residuals," said Screen Actors Guild chief negotiator Sallie Weaver. "The interactive market is of vital importance to our membership, and SAG will spend the next three-and-a-half years devoting resources to further organize this exploding industry so that we can return to the bargaining table with renewed strength and vigor."
Fox Comes Out in Support of Sony's Blu-Ray in DVD Format WarAuthored by Mark Hefflinger on July 29, 2005 - 7:03am.
Beverly Hills, Calif. -- News Corp.'s Twentieth Century Fox film studio announced on Friday that it plans to release movies and other content on Sony's next-generation Blu-ray Disc DVD format. Fox said it decided to support Blu-ray as a result of the format's recent adoption of copyright protection measures, including renewable security. Sony's Blu-ray is one of two new, high-capacity DVD formats currently battling to become the standard -- reminiscent of the format war between VHS and Beta -- the other being Toshiba's HD DVD. The two companies have engaged in heated negotiations towards avoiding a format war, but so far have been unsuccessful. Studio support is considered vital for the success of both formats. Thus far, Disney and Fox are the only studios besides Sony's own to support Blu-ray; HD DVD has received commitments from Paramount, Universal and Warner Bros.
HP to End Sales of HP-Branded Apple iPodAuthored by Mark Hefflinger on July 29, 2005 - 7:01am.
San Jose, Calif. -- PC maker Hewlett-Packard said on Friday that it will stop selling an HP-branded version of Apple's iPod music player in September. "HP has decided that reselling iPods does not fit within the company's current digital entertainment strategy," said Apple spokeswoman Natalie Kerris. "As a result, HP plans to stop reselling iPods by end of this September." HP-branded iPods have made up an average of 5% of all iPod sales since the deal was brokered in January 2004. Apple indicated that HP will continue to ship PCs loaded with its iTunes music jukebox software after the HP iPods are discontinued.
Handheld Game Console Maker Tapwave Discontinues ZodiacAuthored by Mark Hefflinger on July 29, 2005 - 6:54am.
Mountain View, Calif. -- Tapwave, the manufacturer of the Zodiac handheld multi-functional video game system, announced this week that it has shuttered its Zodiac business and discontinued all service and support for the devices. "We thank you for your past interest and support and apologize for any inconvenience that this may have caused," reads a note on the company's website. The Zodiac ran on the Palm operating system, and in addition to games also lets users play digital music, and view photos and video. The device was released in the U.S. in 2003 and in the U.K. in late 2004. Mountain View, Calif.-based Tapwave said that additional products, accessories and game cards will still be available from CompUSA, Fry's and J&R while supplies last.
XM Revenue Jumps 136%; Company Raises Subscriber ForecastAuthored by Mark Hefflinger on July 28, 2005 - 7:28am.
Washington, DC -- XM Satellite Radio, the provider of satellite radio services, said that it added nearly 650,000 new subscribers last quarter, helping the company post a 136% jump in revenue as it slowly moves toward breakeven. XM reported revenue of $125 million, up from $53 million a year ago, and a net loss of $146.6 million, down from $166.1 million. Just as importantly, the company said that it now expects to finish this year with 6 million subscribers, up from its previous forecast of 5.5 million, following a quarter of torrid subscriber growth. The company ended the quarter with just over 4.4 million subscribers.
Take-Two Faces Class-Action Suit Over Sex Content in "Grand Theft Auto"Authored by Mark Hefflinger on July 28, 2005 - 7:25am.
New York -- Take-Two Interactive, publisher of the "Grand Theft Auto: San Andreas" game that is being investigated by the FTC over the inclusion of a sexually explicit mini-game, is now also facing a federal class-action lawsuit in the matter. The lawsuit was filed in the Southern District of New York by 85-year-old Florence Cohen, who purchased the game for her 14-year-old grandson, but claims in the suit that Take-Two engaged in consumer deception, false advertising and unfair business practices by including the hidden sex content in the game. The title was pulled from many store shelves last week after the video game ratings board withdrew its "M" (Mature) rating and replaced it with a 18+ rating of "AO" (Adults Only). "The least this company can do is offer refunds," attorney Laurence D. Paskowitz, who is representing Cohen, told The Associated Press.
Report: Product Placements in "Other" Media to Grow 18% in 2005Authored by Mark Hefflinger on July 28, 2005 - 7:22am.
Stamford, Conn. -- Television and films still account for more than 90% of so-called product placement spending -- where a company pays to have its product featured within the content of a story -- but Stamford-based media research firm PQ Media projects the category of "other" media to grow 18% to $384.9 million in 2005. The category of other media includes magazines, newspapers, videogames, the Internet, recorded music, consumer books and radio, to reach target audiences. "The strong growth of product placement spending in 'other media' is being fueled mainly by solid expansion in videogames, the Internet and recorded music, although magazines, newspapers, consumer books and radio are also expected to post double-digit growth in 2005," PQ Media said in a release.
IPTV Technology Firm Tut Systems Raises $14.9 MillionAuthored by Mark Hefflinger on July 28, 2005 - 7:20am.
Lake Oswego, Ore. -- Tut Systems, a provider of technology for delivering TV over broadband networks (IPTV), announced that it has raised $14.9 million through a private sale of its stock and warrants to institutional investors. "This financing provides Tut Systems with a fully funded business plan, which we believe will enable us to turn cash flow positive in the second half of 2006," said Tut chairman and CEO Sal D'Auria. "This funding provides us with the capital to expand our leadership position in our core IPTV markets, and to pursue top tier carrier opportunities around the world with our content video processing and FTTH edge modulation solutions."
Shareholders Approve Avid Technology Acquisition of Pinnacle SystemsAuthored by Mark Hefflinger on July 28, 2005 - 7:15am.
Mountain View, Calif. -- Avid Technology, a maker of audio and video editing systems, and competitor Pinnacle Systems said that shareholders from both companies have approved Avid's acquisition of Pinnacle. In March, Avid agreed to pay $462 million in cash and stock for Pinnacle. The closing of the deal remains subject to approval by European regulators.
Peer-to-Peer Communications Firm PeerMe Raises Another $1.5 MillionAuthored by Mark Hefflinger on July 28, 2005 - 7:12am.
Mountain View, Calif. -- PeerMe, a peer-to-peer communications technology company, said on Wednesday that it has secured an additional $1.5 million in new financing from Japanese and North American angel investors. The company said that it has now raised more than $2.5 million over the past year. "We view this financing, with participation from all of our existing investors, as a strong vote of confidence," said Tom Lasater, PeerMe's founder and CEO. PeerMe has developed an instant messaging environment that supports Voice-over-Internet Protocol (VoIP) PC-to-PC and PC-to-handheld voice communications, as well as instant messaging and peer-to-peer file transfer fully encrypted over public internet connections.
Film Studios Reach Accord on Digital Cinema Projection StandardsAuthored by Mark Hefflinger on July 27, 2005 - 7:53am.
Los Angeles -- Seven major Hollywood film studios announced on Wednesday that they have agreed on technical standards for digital cinema projection, laying the foundation for a money-saving transition from costly film prints to digitally-projected movies. Digital Cinema Initiatives (DCI), a consortium that includes Disney, Fox, MGM, Paramount, Sony, Universal and Warner Bros., will establish a financing entity that will borrow funds to bankroll the initial installation of digital projection systems -- which cost between $60,000 and $100,000 each -- in 3,500 to 10,000 screens nationwide, a studio source told The Los Angeles Times. These costs would be partly passed on to theater owners, while the rest would be realized in savings from the digital conversion; while film prints cost around $1,200 each, and can deteriorate with use and time, digital movies maintain their quality and currently cost about $300 per copy. Previously, many theater owners were hesitant to pay to install digital projectors, for lack of a common standard. Among the standards set by DCI include specifications for digital cinema picture resolution, and methods of preventing piracy. "After three years of careful planning, discussion and reaching out to all the various constituencies who make up our industry, DCI member studios are pleased to have reached unanimous agreement on the necessary overall system requirements and specifications for digital cinema," said Walt Ordway, chief technology officer for DCI.
Federal Judge Sends Modified Xbox Retailer to PrisonAuthored by Mark Hefflinger on July 27, 2005 - 7:51am.
Washington -- A federal court has sentenced a major retailer of pirated game software and modified game consoles in the Washington, D.C. area to four months in prison. Hitesh Patel, 31, a manager of Pandora's Cube in College Park, Md., pled guilty to charges of conspiracy to commit felony copyright infringement and violations of the Digital Millennium Copyright Act. Patel was modifying Xbox game consoles so that they could play pirated games and then selling them to the public. U.S. District Court Judge Peter J. Messitte ordered Patel to serve four months in jail and four months of house arrest, plus two years probation. "Sentences of this magnitude send a strong message to the pirate community that intellectual property theft is a serious crime with serious consequences," said Doug Lowenstein, president of the Entertainment Software Association, a trade group of video game publishers. Three other Pandora's Cube employees are also expected to be sentenced in the matter next month. The prosecutions are the result of a joint investigation by the Justice Dept.'s Computer Crime and Intellectual Property Section (CCIPS), the U.S. Attorney's Office for the District of Maryland, and the U.S. Bureau of Immigration and Customs Enforcement (ICE).
Napster, XM Partner on Joint Service for MP3 PlayersAuthored by Mark Hefflinger on July 27, 2005 - 7:48am.
Los Angeles -- Napster announced on Wednesday that it has partnered with XM Satellite Radio, to integrate their services in conjunction with the release of new XM-capable MP3 players. The companies will market a co-branded "XM + Napster" service, beginning in the fourth quarter, which will enable users to mark songs heard on XM to their MP3 players for later purchase from Napster. "Today, XM subscribers can effortlessly discover and listen to any kind of music, and soon they will be able to effortlessly access, purchase, and manage their music with 'XM + Napster' and the new XM/MP3 players," said XM president and CEO Hugh Panero. XM currently claims 4.4 million subscribers to its satellite radio service.
Report: Illegal Music Swappers Also Spend More on CDsAuthored by Mark Hefflinger on July 27, 2005 - 7:43am.
London -- According to a report by digital music research firm The Leading Question, people who illegally swap files on the Internet typically spend about four and a half times as much on legal music as those who do not. "There's a myth that all illegal downloaders are mercenaries hell-bent on breaking the law in pursuit of free music," Leading Question director Paul Brindley told the BBC. "In reality, they are often hardcore fans who are extremely enthusiastic about adopting paid-for services, as long as they are suitably compelling." The report echoes similar findings by the U.K. Organization for Economic Cooperation and Development, which last month claimed that there was no real link between illegal file-sharing and lost CD sales. The British Phonographic Industry (BPI), however, remains unconvinced. "The consensus among independent research is that a third of illegal file-sharers may buy more music and around two thirds buy less," said BPI spokesman Matt Philips. "That two-thirds tends to include people who were the heaviest buyers, which is why we need to continue our carrot and stick approach to the problem of illegal file-sharing."
EA Shares Fall as Company Swings to Quarterly LossAuthored by Mark Hefflinger on July 27, 2005 - 7:40am.
Redwood City, Calif. -- Shares of video game publisher Electronic Arts fell sharply on Tuesday after the developer and publisher of video games reported a net loss of $58 million for the most recent quarter. That compares with a profit of $24 million a year ago, though the loss of $0.19 a share was $0.03-$0.09 less than the company had warned in April. Revenue fell from $432 million to $365 million. The company, which has been struggling with weaker-than-usual game sales, said that it still sold more than a million copies each of its "Medal of Honor European Assault" and "Battlefield 2" titles during the quarter. Shares of EA fell by nearly 5% during Tuesday's regular trading session, then slipped another 3% in after-hours trading.
D&M Holdings Sells Rio MP3 Technology to SigmaTelAuthored by Mark Hefflinger on July 27, 2005 - 7:37am.
Tokyo -- Japanese consumer electronics maker D&M Holdings announced on Wednesday that it has agreed to sell the technology assets of its Rio MP3 player manufacturing division to SigmaTel, which makes chips used in some of Rio's portable digital audio players. Financial terms of the transaction were not disclosed. Under the deal, Texas-based SigmaTel will hire most of Rio's engineering team, while Rio will retain a license for the MP3 technology sold to SigmaTel. In addition to Rio, Tokyo-based D&M Holdings also owns the Denon, Marantz, ReplayTV and Escient brands. D&M previously announced that it was examining strategic options for its money-losing Rio unit, and said today that it is still examining a possible sale of the company. SigmaTel said that although it will not acquire ownership rights to the Rio brand or inventory, it will gain some 15 MP3-related patents in the transaction. D&M purchased Rio -- one of the first MP3 player makers -- along with ReplayTV from Sonicblue in 2003 for $36 million.
Dwango, Napster Launch Canadian Ringtone Service With RogersAuthored by Mark Hefflinger on July 27, 2005 - 7:34am.
Seattle -- Mobile entertainment publisher Dwango Wireless announced on Wednesday that it has partnered with Napster and Rogers Wireless, Canada's largest wireless network operator with 5.5 million subscribers, to launch the Napster Ringtones service in Canada. Seattle-based Dwango also powers the Napster Ringtones service in the U.S. Following an initial launch in Canada with Rogers, Dwango and Napster expect the ringtone service to be offered by other Canadian wireless carriers from fall 2005. Rogers subscribers will be able to purchase Napster Ringtones starting at $2.10 CDN ($1.70 U.S.) each.
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