The Gaming News Thread

[TevashSzat]

Guitar Hero III Becomes Highest-Grossing Game Ever

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Guitar Hero's big business. Multiple versions, multiple consoles, it's a big hit. But are you prepared for just how big a hit it is, or for how important it is to publishers Activision?

Well, according to Activision Publishing CEO Mike Griffith, Guitar Hero III has become the first single game in the history of the world to top $1 billion in sales.

That's $1,000,000,000. Spend just on Guitar Hero III.

Sure, it's more expensive than your average game, but do you think that's going to stop the high-fiving and cork-popping going right now in the deepest, darkest depths of Castle Activision?

Nope.

Wow, and I thought the Sims franchise made a ton of money. The amount of money that WoW makes probably even pales in comparision to a billion dollars

[Kekvit Irae]

Wow, and I thought the Sims franchise made a ton of money. The amount of money that WoW makes probably even pales in comparision to a billion dollars

The Sims franchise definitely tops Guitar Hero, but it is spread out over many expansion packs, while the profits of Guitar Hero 3 is just a single game.
Also of note is World of Warcraft. Even though a few months worth of fees (10 million users) completely destroys GH3's profits, the sales of actual units are quite dismal as most can download the client for free or buy it for around five dollars on CD.

[TevashSzat]

Report: Sony to post first loss since '95

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Japan's Nikkei business news says beleaguered electronics giant will end fiscal year with $1.1 billion operating deficit.

Dour economic tidings continue to pile up for PlayStation 3 purveyor Sony. Citing Japanese business news service Nikkei, Reuters reports today that the besieged Japanese electronics company is girding itself to post its first full-fiscal-year operating loss since 1995, and only the second since the company went public in 1958.

According to Nikkei's report, Sony's operating loss for its fiscal year ending March 31 is expected to settle at around ¥100 billion ($1.1 billion). The figure stands in marked contrast to the company's forecasted operating profit of ¥200 billion ($2.2 billion). Nikkei notes that Sony's losses may soar to as high as ¥200 billion ($2.2 billion), depending on the company's performance from now until the end of its fiscal year.

The clearest indication of Sony's turbulent economic situation came in December. At that time, the Japanese company announced that it would slash up to 16,000 jobs as well close about 10 percent of its manufacturing facilities to save approximately $1.1 billion by the end of its fiscal year. Sony also said that it planned to cut investment by as much as 30 percent in its core electronics operations by withdrawing from unprofitable and noncore businesses.

Last week, The Times of London reported that Sony would soon implement "sweeping" and "sacred-cow-slaying" changes in the lead-up to its third-quarter fiscal report, which is expected January 29. Citing "company sources," The Times said that Sony was likely to expand upon the previously announced staff reductions, though no specific divisions were named as targets. Sony later refuted this report, saying that it had no plans to enact any further cost-cutting measures this month.

As noted by Nikkei, Sony's previous full-year operating loss came during its fiscal year ended March 1995, when the company took a substantial one-time charge related to its film business. As such, the expected loss would be the first attributable to the company's mainstay electronics division.

Wow, that does not seem good at all. I guess this speaks more to the dire economic situation we're in than rather a decay of the gaming industry, but alot of these big gaming companies haven't been faring well. Looks at EA

[TevashSzat]

Final Fantasy XIII exclusive to Japan in 2009

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Square Enix's highly anticipated JRPG won't be released outside of island nation until sometime after April 2010 on PS3 and Xbox 360.

At this year's Tokyo Game Show, Square Enix debuted a new trailer for Final Fantasy XIII, its highly anticipated role-playing game slated to arrive for both the PlayStation 3 and Xbox 360. Aside from the eye candy, Square Enix's trailer also offered the tantalizing promise of a 2009 launch date.

Unfortunately, that promise of a 2009 release apparently applies only to Japan, given that the game isn't going to make it to the US or Europe until the second quarter of 2010 at the very earliest. The news emerged as Square Enix, the game's developer, delivered projections for the remainder of its current fiscal year, which ends March 31.

Square Enix president Yoichi Wada told Reuters that the game was on track for a 2009 PS3-exclusive launch in Japan, with international launches for the Xbox 360 and PS3 coming "in the business year from April 2010 or later."

Final Fantasy has been one of the most successful franchises ever to hit the console market. Since its first incarnation on the NES, the series has sold upward of 85 million units worldwide, with numerous spin-offs and even a feature-length movie adding to its success.

Despite the delay in the launch of Final Fantasy, Square Enix has remained optimistic about its financial outlook for 2009 with a small dip in operating profit of 2.4 percent to 21 billion yen ($236 million) forecast for the year. The company also reported healthy sales for the tail end of 2008 and said "demand has been generally brisk," with key titles such as Chrono Trigger, Dragon Quest IV and Final Fantasy VII prequel Crisis Core all hitting shelves throughout the year.

I suppose I'd care more about this had I ever played the Final Fantasy series. Its a shame none of them except for 7 is available on the PC.

Analysts bullish on 2009

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Gaming industry watchers expect the business to continue growing this year despite economic concerns.

While 2008 was a record-breaking year for the US retail gaming industry, a handful of industry analysts are expecting 2009 to be even better.

In a Lazard Capital Markets investors note covering technology themes for the coming year, analyst Colin Sebastian this morning said that the industry's success was tied more to the console generational hardware cycle than to the economy at large. While the US retail gaming industry posted gains of nearly 19 percent last year, Sebastian sees that growth "slowing to more modest mid-single-digit growth in 2009" due to tough comparisons with the explosive growth of 2008 and "potentially fewer hit titles."

While Janco Partners' Mike Hickey didn't put a growth range in his note for the European retailer GameGroup (operator of GAME and Gamestation stores) today, the analyst seemed more optimistic about the product lineup than Sebastian.

"We expect continued video game market growth in 2009, fueled by an exceedingly strong 2008 hardware sell through and a powerful 2009 game slate," Hickey said.

Wedbush Morgan Securities' Michael Pachter was likewise encouraged by recent hardware sales, pointing to them as a leading indicator of strong software sales in 2009.

"As Nintendo increases Wii supply further, Sony markets Blu-ray, and Microsoft fully benefits from its price cuts, we expect hardware sales to show year-over-year increases for the first half of 2009," Pachter told investors in a note regarding NPD's 2008 totals, adding, "a strong release schedule early in the year [will allow] the industry to sustain double-digit sales growth for the full year."

Pachter also returned to the notion that the gaming industry's financial fate isn't tied to that of the larger economy, although gamers might find his reasoning on that point to be rather unflattering.

"It is important to note that the bulk of purchases between January and October are driven by the user of game software," Pachter said. "In our view, this indicates even greater recession-resistance ahead, as most hardcore video game consumers are either ignorant or apathetic about current economic conditions."

Pacific Crest Securities' Evan Wilson didn't commit to a growth projection, but shared some of his peers' guarded optimism.

"2009 has difficult comparisons due to the release of GTA 4, MGS 4, Mario Kart, Wii Fit, Super Smash Bros., and a few other big titles," Wilson told GameSpot. "It also saw tremendous pent-up demand for big holiday titles like Guitar Hero 3 and Call of Duty 4 as well as Wii hardware. We could very well see industry growth continue, even with the current recession in consumer spending, but the comparisons in the first half of the year may make the growth rate below what many have become accustomed to."

[TevashSzat]

America's Army 3 deploys in 2009

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US Army to bring new free-to-play wargame recruitment tool to PCs later this year.

What's the easiest way to have a new first-person shooter stand out among the glut of competing games on the market? Make it free, of course. Picking back up the strategy proven by the original America's Army, the US Army has announced that America's Army 3 will be available for free on the PC in 2009.

Like previous installments in the franchise, America's Army 3 will primarily serve as a recruitment tool for the armed forces, offering an authentic look at the US Army's training, technology, and career tracks. The game also highlights the US Army's value system, including rules of engagement and the warrior ethos.

Still very much a game, however, America's Army 3 features a host of weapons, gameplay missions, and career archetypes. Initially, recruits begin the game as infantry soldiers, capable of specializing as a rifleman, an automatic rifleman, a designated marksman, and a grenadier. The Army plans to augment this list with more career paths in the future, with the combat medic and combat engineer slated to be among the first new classes.

Like the original game and its sequel, America's Army: Special Forces, America's Army 3 will receive a steady stream of updates. The game/recruiting tool will also be powered by Epic Games' Unreal Engine 3. That fact is unsurprising, given that Epic's president, Mike Capps, spearheaded development of the original America's Army, released in 2002.

The wargame franchise also saw several console spin-offs, most recently Ubisoft's less-than-stellar America's Army: True Soldiers.

Never took any interest in the series. How has the first 2 games been?

Video Games Are One Of The 10 Things We're Still Buying

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Financial publication Forbes takes a look at some of the things people are still willing to spend money on in the face of the recession, and of course, our favorite hobby makes the cut.

The economy might be tanking, but we still need our stuff. Without our stuff, what would we be? Stuffless...and no one wants that. Forbes details 10 of the stuffs that people are still willing to hand over their precious, precious money for. Video games were the second item on their list, right after smart phones.

Consumers today desire affordable escapism, and video games fall into that category. Two top-selling games—"Madden NFL '09" and the "Wii Fit"—sold 5 million units combined in the third quarter of 2008, according to NPD.

Other items that made the list include toy building sets, car maintenance items, and personal hygiene items. I never thought I would see video games in the same list as personal hygiene items, but there you go.

SEGA Staff Cuts Confirmed

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The rumor that SEGA of America made thirty of its employees redundant is not a rumor.

Confirming the lay-offs, a SEGA rep. stated, "Sega of America has grown at pace with the booming videogame industry, but at this time of economic recession, harsh retail landscape, and the reality of business challenges to profitability, we must take steps to reduce our cost structure and ensure long-term success... The decision to lay off staff was a difficult one, and we thank these employees for their contributions and wish them well in their future endeavors."

According to the SEGA spokesperson, "about thirty" employees were laid off. We wish them luck in their job search and future endeavors.

This is somewhat of a paradox: More and more economic anaylysts are coming to say that the game industry is faring well in the recession, but we keep on hearing more about these huge layoffs like EA and now Sega

[TevashSzat]

Even more bad news......

Microsoft deleting 5,000 jobs after profits slip

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Software giant letting go 1,400 employees today following lower-than-expected $4.17 billion in quarterly profit; Xbox division's income rises 14% to $3.18 billion.

For many employees in Microsoft's headquarters outside Redmond, Washington, today began with a coffee-spit-take worthy shock. Following disappointing October-December quarter earnings, the company announced it will eliminate 5,000 jobs from its worldwide payroll of nearly 90,000. The cuts will be made in the marketing, sales, finance, legal, HR, IT, and Research and Development departments over the next 18 months, with 1,400 pink slips being sent out today.

"While we are not immune to the effects of the economy, I am confident in the strength of our product portfolio and soundness of our approach," said Microsoft CEO Steve Ballmer in statement. "We will continue to manage expenses and invest in long-term opportunities to deliver value to customers and shareholders, and we will emerge an even stronger industry leader than we are today."

Ballmer's confidence was partly justified by the fact that, although Microsoft's earnings were below expectations, the company remains immensely profitable. For the three months ending December 31, the company's net income--aka profit--slipped from $4.70 billion, or $0.50 per share, in 2007 to $4.17 billion, or $0.47 billion per share, in 2008.

A survey of analysts conducted by the Thomson Retuers news service had been expecting between $0.49 and $0.50 per share. The fact the decline came despite quarterly earnings increasing $260 million to $16.63 billion year-on-year caused Microsoft's stock to drop sharply. As of press time, Microsoft's share value had fallen around 10 percent, trading near its 52-week low of $17.50. Immediately after the announcement, the stock sunk even lower to $17.19 per share.

Despite the mass-layoffs and profit dip, there were some bright spots in today's Microsoft announcement. One of them was the Entertainment and Devices division, which makes the Xbox 360 console and includes Halo 3, Fable II, and Gears of War 2 publisher Microsoft Game Studios. Bill Koefoed, general manager of investor relations for Microsoft, broke down the sector's earnings in a conference call with analysts.

"[The] Entertainment and Devices division revenue grew 3 percent [year on year] to $3.2 billion," explained the executive, rounding up the actual $3.18 billion figure. "A record 6 million consoles were sold in the quarter, growing [the user base] by over 41%. In Europe, Xbox 360 sales nearly doubled those of the previous holiday season. Based on US NPD numbers released last week, Xbox 360 outsold PS3 two to one. We continue to lead the industry with our software attach rate ratio of 8 to 1."

Koefoed also mentioned that, thanks in large part to the Netflix-enabled New Xbox Experience launched in November, Xbox Live memberships have skyrocketed 70 percent year over year. The Xbox 360's online service is now tied with the PlayStation Network--which includes PlayStation 3 and PSP users--at 17 million members.

Chris Liddell, Microsoft's senior vice president and chief financial officer, played up the 360's performance during the analyst call. "The Entertainment and Devices division delivered revenue above the high end of our guidance, driven by a record number of consumers purchasing Xbox 360 consoles during the holiday season," he said.

However, the CFO also warned that there could be clouds on the horizon for the game industry. "The Entertainment and Devices division is highly dependent on consumer spending and while we feel good about the first-half results, a shrinking consumer spending environment would weigh on the segment's results in the second half," cautioned Liddell. He went on to say that "console revenue will likely decline as a result of our earlier pricing actions," referencing the fall price drop of the lowest-end 360 model, the Arcade, to just $199--$50 less than the previously-cheapest Wii.

Sony announces restructuring, $2.9 billion loss

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[UPDATE] PlayStation 3-maker says it will cut TV division by 30% worldwide as operating margins plummet; expects to post first loss since 1995.

That Sony will be cutting a significant portion of its workforce is a certainty. The Japanese electronics giant announced the move in December, saying that it would eliminate approximately 16,000 part- and full-time jobs in a bid to save $1.1 billion through its next financial year, which ends March 31, 2010.
However, what remains to be seen is which divisions these reportedly "sweeping" and "sacred-cow-slaying" cuts will impact. The Financial Times reports today that Sony plans to announce the specifics of its restructuring efforts sometime this week.

As previously revealed, CEO Sir Howard Stringer has faced stiff resistance from entrenched Sony management, who oppose the company's first British-born executive's plan. The FT notes that Stringer believes the stalwart electronics company should shift its focus toward the software market, whereas dissidents maintain the value of its hardware-creation business. Another reported cause for tension between Stringer and upper management is his belief that Japanese staff should be subject to head-count reductions.

Japanese financial news service Nikkei (subscription required) corroborates the FT's report. Nikkei notes that Sony will announce on Thursday that it plans to close one of its two television-manufacturing facilities in Japan by the end of its current fiscal year, which runs through March 31. Along with the factory closure, Sony will reportedly announce that it plans to cut more than 2,000 jobs in Japan, as well as lower its fiscal-year earnings outlook. However, as with Microsoft's reported cost-cutting measures, Sony will eliminate the 2,000 jobs by way of natural attrition, or employees leaving the company of their own accord, according to Nikkei.

The Japanese factory wouldn't be the first that Sony plans to shut down. After Sony's restructuring announcement in December, Pennsylvania governor Ed Rendell confirmed that Sony's flat-screen television-manufacturing facility located in his state will close, leaving approximately 560 employees out of work. In total, Sony said that it plans to close 10 percent of its 57 manufacturing facilities.

Sony's cost-cutting measures have been spurred by the PlayStation 3 maker's grim fiscal outlook. Earlier this month, Nikkei reported that Sony will post its first loss since 1995, only its second since the company went public in 1958. Sources told the Japanese news service that Sony's net losses for the current fiscal year will hit ¥100 billion ($1.1 billion), a figure that could double depending on the electronics company's January-March retail performance.

[UPDATE] As expected, Sony's restructuring announcement has come to pass. The electronics company today confirmed much of Nikkei's initial report, saying that it will close one of its TV-manufacturing facilities in Japan, as well as reduce its global headcount across the division by 30 percent during its next fiscal year, ending March 31, 2010.

In a further effort to cut costs, Sony said it would be substantially reducing executive bonuses for the current fiscal year, introduce an early retirement plan, and outsource more of its software development. In all, the publisher expects its cost-cutting measures to amount to a savings of ¥250 billion ($2.8 billion) by the end of its next fiscal year, more than doubling the target it set out in December.

Along with the restructuring announcement, Sony drastically lowered its current fiscal-year earnings forecast. Coming in significantly lower than already dismal projections, the company said it now plans to post a ¥260 billion ($2.9 billion) operating loss for the year ending March 31, 2009. Previously, Sony had expected to make a ¥200 billion ($2.2 billion) profit for the year. For the year, Sony now expects to post a ¥150 billion ($1.7 billion) net loss on ¥7.7 trillion ($86.5 billion) in revenue.

EA sacks Madden, NCAA staffers

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Orlando Sentinel reports not even cash-cow farm EA Tiburon has escaped the megapublisher's payroll reductions; football franchises and Tiger Woods PGA to remain at studio.

When Electronic Arts announced that it was laying off 1,000 employees--or 10 percent of its staff--many presumed that its Tiburon studio would be untouched. Located in plush offices outside Orlando, Florida, the developer makes the Madden NFL and NCAA Football series, EA Sports' exclusive--and lucrative--professional and college football sims. It also crafts Tiger Woods PGA Tour, the popular and feature-laden pro golf series.

Unfortunately, according to the Orlando Sentinel, not even EA Tiburon has escaped its parent's cost-cutting unscathed. This evening, EA government-affairs chief Craig Hagen told the newspaper that a number of the studio's 650-700 employees had been laid off. Much like recently downsized Sega's tight-lipped reps, Hagen declined to disclose the scale of the cuts, saying only that it would not overly affect the studio's productivity.

"The economy is affecting every industry, including ours, and we need to tighten our belts and reduce our operating costs," Hagen told the Sentinel. "Tiburon remains one of the flagship studios for EA Sports and will continue to be the home base for the leading sports franchises like Madden, Tiger, and NCAA Football."

[Kekvit Irae]

What a great way to open up a new year: LAYOFFS!
Kinda makes one think twice before going into the gaming industry.