Sunday, October 29, 2006

Activision Braces for Wii, PS3

Robin Kaminsky, EVP of publishing at game maker Activision, talks about the next generation of consoles and emulating Switzerland.

With Sony’s PlayStation 3 and Nintendo’s Wii debuting in less than a month, game industry folk are prepping for a holiday season that is shaping up to be the biggest in years. For game publishers, the next two holiday seasons will be the time to make some serious hay.

New consoles mean brand new games, and Santa Monica, California-based publishing giant Activision will be ready with launch titles for the latest systems. PS3 owners can look forward to Marvel Ultimate Alliance, Call of Duty 3, and Tony Hawk’s Project 8, while Wii fans will get their own versions of the first two games, plus Tony Hawk’s Downhill Jam.

The company will release quarterly earnings soon, too, and analysts are raising their forecasts. Based on a stronger than expected second quarter, Wedbush Morgan Securites’ Michael Pachter bumped revenue expectations for the quarter ended September 30 to $145 million, up from $135 million.

Colin Sebastian of Lazard Capital Markets expects revenues to be slightly ahead of the firm’s $132-million estimate. Activision’s guidance for the period is $130 million, a loss of $0.13 per share.

Red Herring recently spoke with Robin Kaminsky, Activision’s executive vice president of publishing. We asked her about subjects including the new consoles, original versus licensed IP, and in-game ads.

Ms. Kaminsky joined the company in May of 2005 as head of global brand management, and in June of this year she became Activision’s executive vice president of publishing. Before joining Activision, Ms. Kaminsky spent almost eight years at PepsiCo. Excerpts from the conversation follow:

Q: When Sony’s PlayStation 3 and the Nintendo Wii debut next month, Activision will have some games ready. Why is making versions unique to specific consoles important, and what makes them special?
A: [For the Wii], games like Tony Hawk’s Downhill Jam really reach beyond the core gaming audience. We’re using the controller in a new way. In Call of Duty 3, you get to use [it] as a gun. It becomes a very living, breathing experience because of the way you control the game.

When a title is multi-platform, we’ve really tried to use what makes each platform unique. Call of Duty 3 on the PS3 and Xbox 360 is very much the next-generation of what we did with Call of Duty 2. On those platforms you can present an experience that’s much more lifelike. Call of Duty 3 also has a robust multiplayer aspect on PS3 and 360.

How we get there is much different, but the end result is the same. As long as the platforms are successful, they will more than pay back development costs for us.

Q: Sony’s PS3 features a Blu-ray drive (50GB), while Microsoft’s Xbox 360 has a DVD drive (9GB). When will we start to see differences in the game play experience due to storage capacities—and limitations?
A: We’re Switzerland. We want every one of those first parties to be successful. We have a role in helping that [happen by] delivering great software that maximizes what each of those platforms can do.

Q: Fair enough. Activision has licensed a number of properties for use in video games. Spider Man, X-Men, and movies from Dreamworks are a few examples. How do you decide between original and licensed IP?
A: There’s a value and a place for both. The most successful titles are either licensed intellectual property or sequels. We’re looking for great IP, regardless of whether it’s original or licensed.

There’s a lot of great IP out there that’s already been built. Placing a bet on licenses or franchises is a good plan for a company… There are a lot more failures with new IP.

We’re very particular. We continue to develop and prove out new IP. You won’t see five to 10 [titles based on new IP] from us in a year, but you will see one to three.

Q: Among other things, firms like DFC Intelligence forecast consoles comprising a smaller share of the market in the future. What do you make of the future of the industry?
A: With each successive [product cycle], the console business has grown. We have no reason to suspect that won’t happen this time. The console business will grow, but other parts of gaming will grow too.

Gaming is a major form of entertainment now [and] no longer a niche product. If Nintendo, Microsoft, and Sony are successful in what they say they’re going to do, the gaming pool is going to become much larger.

Q: What’s the future of in-game ads? They’re a hot topic lately.
A: They are an incremental revenue source in games. Our learning demonstrated that it actually enhances the gaming experience [when done] correctly. We think there’s enormous opportunity. Our strategy is brand partnerships and greater brand recognition.

The most powerful way is true hard-coded integration that engages the brands somehow. An example: use a phone partner [like Motorola] to make calls, or include a Jeep in Tony Hawk.

Q: In Electronic Arts’ boxing title Fight Night Round 3, for example, players can unlock a Burger King character. Many gamers want to fight him—something you currently can’t do. How do you see interaction with in-game brands evolving?
A: There are brands that have far more tolerance for what you’re describing. It’s all going to be about matching up [games and brands].

Wireless phone carriers, car companies, we’re starting to see beverage companies… Brand partners will become more savvy. What Burger King is doing is likely to change the fast food landscape. It happens with any new media format. A few categories get involved quickly.

Q: The Entertainment Software Rating Board oversees and rates games, but titles like Grand Theft Auto: San Andreas (from Take-Two Interactive) have spurred government interest in game regulation. What do you think about what’s going on?
A: I don’t want the government to tell me what games my kids can play. There’s a very specific rating system in games that’s far more limited and adhered to than rating systems in other media. We market and only test consumers that meet our rating criteria. This industry holds itself to a higher standard than any other form of entertainment I can think of.

Q: You worked at Pepsi—and before that Coke—for some time before moving to Activision. What makes the gaming industry unique?
A: It’s [producing] both entertainment and a good that’s being sold. The entertainment we deliver has a many-hour experience. The thing that makes it most exciting is the fact that it’s an industry that practically reinvents itself every year. It’s not art for art’s sake… It’s an art form that’s also a business.

Nintendo bets on Wii's novelty, but software rules

TOKYO/LOS ANGELES, Oct 12 (Reuters) - With the year-end shopping season approaching, expectations are running high that Nintendo Co. Ltd. (7974.OS: Quote, NEWS, Research) will repeat the success of its DS handheld machine next month with its new game console, the Wii.
Nintendo has developed the Wii not to please hardcore gamers with lifelike graphics but to entice game novices with innovative but easy-to-play games -- the same concept that helped the DS far outsell Sony Corp.'s (6758.T: Quote, NEWS, Research) PlayStation Portable.
But the novelty of Wii's one-hand controller may fade quickly if game makers are slow to come up with fresh titles, analysts say.

"Software makers and distributors are holding such high hopes for the Wii," Deutsche Securities analyst Takashi Oya said. "Their latest stance is like, 'Why don't we reallocate some of the resources from the PS3 to the Wii,'" he said, referring to Sony's forthcoming PlayStation 3.
Electronic Arts Inc. (ERTS.O: Quote, Profile, Research), the world's biggest video game publisher, is working on seven Wii titles this business year ending March 2007, up from its previous plan for five, in a bid to capitalise on the unexpected buzz around the console.
In the year to March, Nintendo aims for global sales of 20 million DS units. The DS lets users navigate games by touching the screen with a stylus instead of manipulating a keypad, and carries a price tag of $129.99 in the United States.
Sony, in comparison, expects to ship 12 million units of the PSP, a basic model of which sells for $199, over the same period.
For the Wii, Nintendo offers a TV remote-like controller, which uses motion-detection sensors that allow players to control the game by swinging the device like a tennis racket or wielding it like a sword, opening up new avenues for game playing.

Nintendo's own "Wii Sports" software, which will be included with the console in the United States and Europe, makes it possible for grandparents to play a virtual tennis match with their grandchildren in the living room.
"(The Wii) is something that will appeal to a 7- to a 70-year-old," said Laurent Detoc, who leads French video game publisher Ubisoft Entertainment SA's (UBIP.PA: Quote, Profile, Research) North American business.
Reflecting blistering DS demand and mounting hopes for the Wii, Nintendo shares shot up 71 percent from January to September.
The Kyoto-based company is set to launch the Wii in the United States on Nov. 19 for about $250, roughly half the price of the PS3 model that comes with a 20-gigabyte hard disk drive and Blu-ray high-definition optical disc player.

Sony plans to start rolling out the PS3 in North America two days ahead of Nintendo's Wii. Microsoft Corp. (MSFT.O: Quote, Profile, Research) released its latest console, Xbox 360, late last year.
$64,000 QUESTION
Despite the game-changing controller, affordable price and strong software lineup such as "The Legend of Zelda: Twilight Princess," the Wii launch is not without concerns.
"For the DS, whoever found it interesting carried it with them and showed it to people around them. That was a great demand driver," Nintendo President Satoru Iwata said last month. "We cannot expect that sort of push for a stationary console."
Analysts point out the possibility that the new controller, which requires substantially more physical movement than the traditional keypad, could eventually make game playing tiresome, causing gamers to turn their backs on the machine.

Japanese videogame maker Square Enix Co. Ltd. (9684.T: Quote, NEWS, Research) launched a game in 2003 in which players wield a toy sword in front of a sensor-mounted TV set to fight monsters on the screen, but it failed to become popular enough to spawn a sequel, casting a shadow over the Wii's prospects, Deutsche Securities' Oya said.
"Wii Sports is a fun diversion," said Sam Kennedy, editor-in-chief of videogame Web site "People will play it for a while, but it's not something that will capture your attention for weeks."
To make things harder for Nintendo, a boosting effect from PS3's Blu-ray player is likely to kick in next year, Oya said.
"There are quite a few people out there today who have no idea what Blu-ray is," he said. "But a year after its launch, at around this time next year, more people will start recognising the added value brought by a Blu-ray player, just as a DVD player function helped the PS2 to a flying start."

KBC Securities analyst Hiroshi Kamide said the Wii may start to show its age quicker than the PS3 or Xbox 360 as it is not a particularly powerful machine from a technological perspective.
The fate of the console comes down to depth and width of game software, he added.
"If it's just the same pointing and shooting all the time, it won't be particularly attractive," Kamide said.
"So to a certain extent, it's up to Nintendo software and software developers all over the world to try and think for themselves how best to utilise the controller."
Asked if the Wii's novelty would wear off, Larry Probst, chief executive of Electronic Arts, said: "That's the $64,000 question. I think it will do really well during the launch window."

Toys "R" Us to take Nintendo Wii pre-orders Oct 29

NEW YORK, Oct 26 (Reuters) - Toys "R" Us said on Thursday that it will begin begin pre-order taking for Nintendo Co. Ltd.'s (7974.OS: Quote, NEWS, Research) Wii video game console on Oct. 29 at its stores.
The toy retailer said a $50 deposit is required to reserve one of the consoles.
Nintendo's Wii will make its U.S. debut on Nov. 19 in what should be a hot holiday season for video game consoles, with Sony Corp.'s (6758.T: Quote, NEWS, Research) PlayStation 3 slated to hit U.S. stores Nov. 17.
But severe shortages are expected for the Wii and the PlayStation 3, as demand outstrips the companies' ability to turn out the new devices.

Earlier this month, GameStop Corp. (GME.N: Quote, Profile, Research), the biggest video game retailer in the United States, stopped taking pre-orders for the Wii the same day it started taking the orders.
"Due to extremely limited supply, we expect to reach our limit very quickly, most likely in minutes. We will not accept additional pre-orders at that time," GameStop said in announcing its pre-order plan.
The Wii, priced at about $250, features a motion-sensing controller that operates like a television remote control and lets players simulate swinging a bat, sword or tennis racquet.
In September, Toys "R" Us included the Wii on its "hot toy" list for the upcoming holiday season.
Nintendo has said it expects to supply 4 million Wii units worldwide by year end. Sony expects to ship 2 million PS3s in the same time period

Wednesday, October 18, 2006

The Legend of Zelda: Twilight Princess - Wii Preview

When an evil darkness enshrouds the land of Hyrule, a young farm boy named Link must awaken the hero – and the animal – within. When Link travels to the Twilight Realm, he transforms into a wolf and must scour the land with the help of a mysterious girl named Midna. Besides his trusty sword and shield, Link will use his bow and arrows by aiming with the Wii Remote controller, fight while on horseback and use a wealth of other items, both new and old.

Arm Link: The Wii Remote and Nunchuk controllers are used for a variety of game activities from fishing to projectile-weapon aiming. The game features incredibly precise aiming control using the Wii Remote controller. Use the controllers for sword swings, spin attacks and shield shoves.
Thrilling Adventure: Players ride into battle against troops of foul creatures and wield a sword and shield with the Wii Remote and Nunchuk controllers, then take on massive bosses that must be seen to be believed.
Mind & Muscle: Many puzzles stand between Link and the fulfillment of his quest, so players must sharpen their wits as they hunt for weapons and items.

Excite Truck - Wii Preview

In the grand racing tradition of Excitebike, get ready for a big-air experience like no other! Players rocket their trucks across dynamically changing terrain in this nitrous-injected, high-flying racer for speed junkies. Showing the Wii Remote controller's versatility, players tilt the controller on its side to turn it into a wireless steering wheel!

Body English: Remember tilting your arms while playing Excitebike to try to make your character land a huge jump? That experience is finally a reality with Excite Truck.
Controller as a Steering Wheel: Players hold the Wii Remote like an NES controller to control the truck. The 2 button is the accelerator, the 1 button is the brake, the + Control Pad is the turbo... but that's just the beginning. Tilt the Wii Remote controller right and left like a steering wheel to steer. Once the truck goes airborne, tilt the Wii Remote controller every which way to line up the wheels for landing boosts.
Dynamic Terrain: Pick up items on the courses to make the terrain deform in real time, turning innocent bumps into massive launch pads that affect not only the player's route, but that of his or her rivals. Players jump and bump their way to the highest score and highest finish.

Wario Ware Smooth Moves - Wii Preview

The WarioWare team took an idea so wacky, it could only be made with the latest technology: the Wii Remote controller! Wario stumbles into an old building called the Temple of Form. Inside, he finds a mystical treasure called the Form Baton. There are many ways to hold and move the baton (called "forms"), and legend has it that if the holder follows the forms, he can overcome any challenge. With this discovery, the form craze spreads and soon everybody is doing their best to master the moves.

Revolutionary Fun: With hundreds of microgames,this game is just as wild as you'd expect from the name WarioWare, but the game play has been revolutionized. Under Wario's tutelage and with the help of the Wii Remote, players will swing, spin and squat their way to victory.
Tons and Tons of Microgames: With more than 200 lightning-quick microgames and controls that range from scribbling to flailing, WarioWare: Smooth Moves takes interactive gaming to a whole new level. All players need is confidence, a Wii Remote and their best moves.
Off-Screen Party: With games that are as much fun to play as they are to watch people play, WarioWare: Smooth Moves brings the party to its feet. It's hilarious for players and audiences alike.

Wii games to retail as low as $29.99

Games for Nintendo's Wii video game system will retail for as low as $29.99. Midway's Rampage: Total Destruction is listed on numerous retail websites at the value price of just under $30. Total Destruction is available for current-generation consoles for $19.99.
Games for new consoles typically retail from $49.99 to $59.99.
Wii will employ low-cost technology for graphics hardware and instead emphasize its advanced motion-sensing controller, the Wii Remote.
Wii will also be the least expensive new console this holiday against Microsoft's Xbox 360 and Sony's Playstation 3.
Nintendo hopes that low prices and casual games that anyone can play will help it succeed against more technologically advanced machines.
GameStop Corp. stores recently pre-sold out of Wii consoles nationwide shortly after they were made available to the public.

THQ: Four titles for Nintendo's new console

THQ had an ugly trading session yesterday. After an analyst downgrade, shares closed 3.4% lower. Still, the company's got good news in the form of a press release on the publisher's initial foray into games for Nintendo's Wii.
THQ will have four games available around the time of the system's launch, based on the company's lucrative licensing relationship with Disney's Pixar properties and Viacom's Nickelodeon. The titles include Cars, based on the Disney CGI cartoon, and three titles from Nick: Barnyard;Avatar: The Last Airbender; and SpongeBob SquarePants: Creature from the Krusty Krab.

Tuesday, October 17, 2006

Wii - Preview

Nintendo Wii is Nintendo’s seventh-generation video game console which also called Nintendo Revolution due to the fact that the console has the official project code name of Revolution. The major feature of the Wii is the console’s wireless controller, the Wii Remote, that may be used as a handheld pointing device and can detect motion and rotation in three dimensions. The controller also contains a speaker and a rumbling device to provide sensory feedback, with additional ability to Wii on and off. Other feature of Wii console include stand-by mode entitled WiiConnect24 which enables Wii game console to receive messages and updates over the Internet while consuming very little electrical power. Nintendo Wii is backward compatibility with all GameCube software and most peripherals, supports wireless connectivity with the Nintendo DS, supports parental controls, and region locking.CNet previews Nintendo Wii gaming console and concludes that “could the Wii be the latest in that line of failures? We doubt it. While we have a few qualms, Nintendo’s combination of unique control features, an ultra-affordable price, and a huge back catalog of retro games make the system appealing for casual and enthusiast gamers alike. It’s priced very attractively for holiday buyers, and the buzz for the console has been hot. With Sony’s PlayStation 3 shipping in scarce quantities and the Xbox 360 continuing to aim for a more adult audience, Nintendo has a chance to reclaim the console crown with the Wii.”