Wednesday, February 16, 2005

Shanda Upgrades Game Worlds

According to Zhou Zhengqian at Pacific Epoch, Shanda has expanded some of their online game areas and raised the price for playing on those areas. Players get twice the experience but also pay twice the price. Not a clear sign of pricing power but definitely a sign of people wanting more.

NCSoft Introduces Guild Wars In Europe And USA

NCSoft is once again pushing the envelope or at least markets. Now they are launching the Guild Wars in North America and Europe. They are managing their business in a very clever manner. First, introduce the successful product and establish sales channels and support organizations. Then it is time to follow the trail with new products and reap the benefits of scale - straightforward and effective. The question is, how will they fare in coming competition, after all there are some exciting titles coming to the markets, WoW leading the pack.

Monday, February 14, 2005

Kayak Buys Synergenix

Kayak Interactive saw its chance and grabbed Synergenix a Swedish mobile publisher. Together the two companies form a mobile publisher of some considerable size. This was especially smart move from Kayak, as they were able to bolster their technical expertise on mobile platforms. After this move, Kayak will also be fighting for the top position in mobile gaming.

Sunday, February 13, 2005

Activision Management Sell Shares

Activision put out good numbers but the stock took a hit from surprising source – insider selling. Regulatory filing was accompanied with normal soothing comments about the sale. It was interesting to notice that it was widely speculated on the markets that this sale brushes off acquisition speculations.

I would like to offer different view, as the management owns less stock they have less personal feelings for the company and are more willing to sell it off. Now there were also some “homeless” stocks on markets and somebody grabbed them. I am actually betting on the coming consolidation of Activision ownership.

Mobile Surround Sound

According an article, written by John Borland, A British start-up Sonaptic has gotten its surround sound technology introduced in a mobile phone on Japanese markets.

Now we have 3D sound and 3D graphics. Still waiting for that phone, which finally combines both.

Saturday, February 12, 2005

Atari Financial Trouble

It’s Atari’s turn to shed light on their darkest pages of account books. What do we see? TheStreet.com, Motley Fool and Reuters, they all play very moody concerto for Atari. Basically everything went to nuts - revenue tanked, margins dropped and titles had lapses.

Atari introduced a new kind of portfolio thinking. They will focus on improving returns for invested capital. Sounds clever, they have some nice product brands like Dragon Ball Z, Yu Yu Hakusho, Magic The Gathering, Beyblade etc. in their stables.

I guess that this new strategy of focus on returns means that they try to develop present product lines, especially those franchises that they paid for a good price. They have high costs related to marketing and distribution i.e. selling the games, but very little to show for as results.

Now RollerCoaster Tycoon is a nice game, it has no other content related products to support the brand image, but still this series is doing well. There hope is to match good game with good content brand.

Finally this financial slacking of Atari is also very bad news for Infogrames, because Atari is its subsidiary. Infogrames is already in trouble and has to scrape every penny it finds. See how this affects to Atari, there is no talk about reinvestment. Atari just claims to aim for better management of operations.

Thursday, February 10, 2005

Chinese Online Game Companies Doing Well

Week ago I expressed my worries regarding the intensifying competition on the Chinese online game markets. I still think that the market is getting crowded and the margins will sink, but for now there are no worries in investors minds. Since the previous week, stock prices of game companies have climbed again. Both Shanda, and The9 had considerable improvement. Especially Shanda’s star was rising overnight, because they announced good financial results. Massively multiplayer segment was not doing too well compared quarter-on-quarter, but casual online gaming grew rapidly.

NCSoft Rockets Stellar Growth

I told you once and I am telling you again - NCSoft is the kind of company that I would associate my retirement savings. They are now operating on all the major markets for online games and their products, while not especially innovative, are well presented and affordable. This is a great combination to gush cash.

They just informed about their financial results for the past year. They have excellent results show off. Revenue was up about 50% from earlier year and profits doubled. Now, this is during times when they have made few large investments. This year the European expansion will gain momentum and next year the results could be seen in the financial results. Take notice that the broadband usage in Europe has risen rapidly and homes have more computers. Furthermore, the market is nowhere near as fiercely competed as markets in the US and Asia. Very promising outlook for NCSoft.

Activision Posts Excellent Results

I wrote about THQ, which I consider to be a company that is boxed in to US markets. Activision is like the other side of the coin. They have wonderful slate of products that fit to the international markets. Activision grows fast and one can almost label this growth as organic, since they mainly purchase only those companies that they have a close working relationship.

Electronic Arts has far greater turnover, but if that weren’t the situation, I would bet my money on Activision as THE dominant player in the future of game industry. Now Activision is SOOO tempting target for acquisitions that I am terribly excited to see if they make it on their own. In my books, the business methods of Activision are nicer than those of Electronic Arts, so I sure hope they remain independent and remain as a good guy on the block.

One thing that warms my heart especially was the comment that handheld platforms will enjoy tremendous growth. Mobile gaming, I like it :)

Thursday, February 03, 2005

THQ Posts Excellent Results

For me this was really a surprise. To me THQ had nothing but rubbish in their product slate, well few exceptions like OddWorld and Sonic. Seems like their games are geared towards younger audience and therefore the company might be bit off the radar, what comes to analysts.

Now, if only they had a way to market these games efficiently to audiences outside US. I admit that I wasn't impressed, but was now shown to be wrong. However, I still claim that their titles are not going to do as well in Europe as in the States. If they manage to get both markets right, then THQ will have a hefty pile of cash in their coffers.

NCSoft Starts In Europe

So now those super heroes are coming to Europe. NCSoft seems to get good reviews for their games, so I anticipate good launch and solid earnings. This is the benchmark company to follow in online gaming.

Chinese Online Game Companies Fall

Shanda and The9 have lost some stock value during the past week. Both companies have expressed their desire to expand their scope of business outside of operating online games. The9 keeps it together bit better and remains on game related field but Shanda has higher ambitions.

Except updated business strategies the other news that has been playing against Shanda and The9 is a barrage of news that comes from competition. New companies are sprouting up to the field, old companies are intensifying their marketing and development and there are also new candidates, which plan to apply IPO status.

Situation will not change and these celebrated game operators might have to admit that this business is not that profitable, fast growing and secure as before. Investors might have to consider putting their money somewhere else.

In-Fusio Acquires Thumbworks and Mobile Scope

For a company of such a short history, In-Fusio has managed a lot. After the recent purchases it has pushed itself to the top of mobile entertainment. I see this as desirable development because I consider In-Fusio to be a European company even it has lot of American capital to back it up.

Latest consolidation does good for the mobile game industry because it makes the business simpler. Less players to worry about, so mobile companies can deliver higher value for the users. Europe's mobile industry is still reeling because of the heavy investments to licenses and network development. It is only now as the companies are getting back in shape.

I don't worry the possibility of innovation stagnation, because at this point of time it is more important for mobile content, service and technology companies to make money in order to catch up in the market development. As the playing field is developed and stabilized and as the 3G basics are in use, then it is finally a time to squeeze that light bulb bit harder.

Wednesday, February 02, 2005

Kingsoft Advertises Fengshenbang

Chinese software and online game developer Kingsoft has high hopes on their new online game - Fengshenbang. Kingsoft plans massive marketing operations that include billboards and TV to support their new title. In short time, they have already used double the average annual amount that goes to marketing to promote their new title. The number of Kingsoft's userbase has risen rapidly and they are planning to push themselves into the top three of online games in China. Costs are rising and competition is fierce so watch out those stock prices.


Empire Interactive Stock Falls

Major shareholder of Empire Interactive sold its stake in the company, crashing the stock price. Company moved on to calm people that there is nothing to worry about, everything is just fine.

It is common sense that if any major owner sells shares before announcing financial results, the odds are that those results are not going to be especially great. Now we wait for those results and hope for the best.

For an investor that can stand the heat, now it is good time to buy. Otherwise another old truth is worth considering, bad results signal for sorry state of business and troubles are not gone overnight, if it is going down - it will continue to do so.

UbiSoft Expands In Montreal

The news is out. UbiSoft will expand their operations in Montreal and increase the workforce with thousand people by the year 2010. This grand scheme will obtain some government subsidies and tax breaks.

Well nothing amazing, company wants to grow so they need to decide where it is going to happen. This time around Montreal got lucky. How this will work towards maintaining their independent status as a game company? Hard to say, it appears to be more of a confidence builder than a concrete move to save the company. Purpose of this announcement is to assure the markets that UbiSoft is here to stay and will continue to develop their business.

Tuesday, February 01, 2005

Gamania Makes A Move In China

Gamania is in talks with several big Internet Cafe Unions in China. They are discussing about the possibility of launching EverQuest II themed Internet cafes in eastern China.

This will not be good news for local online game operators since this could be the start of competitive armament of themed cafes. Costs are going to rise, check out that Shanda stock price.

Motion Recognizing Mobile Phone

Sharp designed it for Vodafone. In Japan people will be able to fool around with their cell phones without touching the keypad - just twist and roll... or whatever...

Most interesting applications for this phone model will be specially designed games (I don't believe in shaking my phone to make it call to someone). However, it will be great fun to balance a marble on the screen by balancing the mobile phone on the palm of your hand or what about a game of golf, swinging the mobile phone like mad (do this on metro and you get few swings in exchange) to make your character swing like Tiger. Golf game is actually already available, but to my knowledge, this idea of marble balancing is still only in my head (hint - give me money and I tell you about it).

I wanna get my hands on those handies...

UbiSoft Press Conference In Canada

On February 1st, UbiSoft will hold a press conference in Montreal. Lot of important people especially from Canada's and Quebec's governments are present but Yves Guillemot will not be there. What could it be? Education center? Probably nothing too commercial, maybe a purchase of small development studio. Lots of tea and biscuits, let's wait this out.