AllThingsD » audiences

No One Is Buying Nintendo's Cautionary Tale About Mobile and Social

Tricia Duryee — Thu, 03 Mar 2011 06:06:58 +0000

Leaders in the gaming industry reacted negatively today to controversial comments made by Nintendo’s President Satoru Iwata at the Game Developers Conference this morning.

Iwata, who presented the show’s only keynote, said he fears today’s emphasis on mobile and social is going to hurt the industry.

Later in the afternoon, critics said his statements only prove his ignorance and point to the company’s own weaknesses.

“Long-term, Nintendo is doomed,” said Michael Pachter, equity research analyst of Wedbush Securities. “He’s under full frontal assault by Apple.”

In the keynote, Iwata explained the games industry is no longer focused on building the highest quality experiences, but rather is narrowing in on free or very low cost titles.

“The majority of people here are creating games for social and mobile. I fear our business is dividing, and that threatens the employment for those of us who make games for a living,” he said.

Iwata also addressed Apple’s impact on the industry, but without every naming the iPhone and iPad-maker.

The lack of acknowledgment felt particularly strange given that his comments were being made at the exact same time that Steve Jobs was across the street, unveiling the iPad 2, which has all the hardware capabilities in place to become a serious gaming device.

The closest Iwata got to talking about Apple, and probably Facebook too, was when he said that “these platforms have no motivation to maintain the high value of video game software. For them content is something created by someone else.”

For emphasis, he added: “The value of games does not matter to them…The fact is, what we produce is value, and we should protect it.”

[A video of Iwata's entire speech can be viewed on Nintendo's web site.]

Iwata gave the impression that he was oblivious to the burgeoning mobile and social sectors around him, which despite being in their infancy, are generating significant revenues and attracting large audiences. Together, they both have the ability to define the future of gaming.

“He may be right, but then the 200 to 300 million people who play games on Facebook are wrong,” said Jeff Brown, the VP of corporate communication for Electronic Arts ”Social gaming as a whole aggregates into a business that is undeniably big money.

“When it’s that big you are forced to pay attention,” he added.

Among the large publishers, EA’s ahead of the game when it comes to preparing for the day when consumers switch from paying $60 for an Xbox title to paying a few bucks or nothing at all for an iPhone or Facebook game. Yesterday, it furthered its commitment by expanding its third-party publishing platform into social and mobile through its acquisitions of Chillingo and Playfish.

So far, it’s paying off.

EA’s digital business was up 39 percent in 2010 and its on track to hit three-quarters of a billion in revenues this year.

Zynga, the undeniable leader on Facebook, also took offense to the statements.

Zynga’s Chief Game Designer Brian Reynolds, who came from the traditional games business and was lead designer on the big hit Civilization II, was especially baffled by the comments about being able to make a living in social.

Last year, Zynga hired more than 800 people and today has more than 1,500 full-time employees in 13 offices, spanning six countries.

“I expected better from Nintendo. They are missing the point of what we are doing,” he said. “We are making games that everyone can play and socialize on while playing.”

What’s more, Zynga is doing a great job monetizing, he said.

Sources tell BoomTown’s Kara Swisher that it’s close to completing a funding round of $500 million, valuing the company at $10 billion –making it worth more than EA’s $6 billion market cap. In 2010, its revenues were rumored to total $850 million.

“We do it in a microtransaction way, and it’s free to play, but they’re wrong that they don’t make a lot of money,” Reynolds said.

The gaming industry has always been fraught by disruption.

In the past, the storyline has been about the consoles wars with Microsoft, Nintendo and Sony all going head-to-head to be the gaming leader. Now, it’s about the platform wars with consoles vs. mobile and social.

How quickly do things change.

It was only a year ago at GDC that Zynga seemed to piss off everyone when accepting an award on behalf of Farmville for best new social/online game.

In a similar manner as Nintendo today, Bill Mooney, the general manager for Farmville at the time, used his acceptance speech to make the argument for why everyone should leave console gaming for social games. He even solicited resumes at the podium.

Mooney’s overtness was translated as lack of respect for the traditional games business, which is what seemed to bother people the most.

What’s different with today’s platform wars vs. yesterday’s console wars is that this time, it’s not about one beating another. It’s about expanding the market opportunity for gaming. Ultimately, if you give people a choice of platforms to play on, more people will play.

Reynolds said while Zynga has made huge gains since last year, it still hasn’t been fully recognized for its work.

“What we’ve done has permeated everywhere, but we don’t have the recognition from the old guard. The young guys — they get it, but the forces of the industry are living in the past. The longer it takes them to realize that, the more it will cost them to buy your way back in.”

As for whether Nintendo is wrong or right, and whether it will have to pay heavily down the road to get back in, we’ll have to wait and see.

The rest of Iwata’s hour-long keynote was spent promoting its upcoming 3DS launch at the end of the month.

Today, Nintendo’s North American President Reggie Fils-Aime announced a partnership with Netflix to offer streaming video.

It also formed a partnership with AT&T to give internet access to the handheld gaming devices wherever it operates WiFi hotspots.

Webush’s Pachter said despite the pressure from Apple, he believes the 3DS is novel and has the ability to sell tens of millions of units, but it will face competition from the iPod and iPhone, which have similar games and much lower prices.

EA’s Brown also wouldn’t count them out. “The instant you stop thinking they are relevant, they turn the industry upside down.”

D: All Things Digital Goes Plural With New D: Dive Into Mobile Conference

Kara Swisher — Wed, 13 Oct 2010 13:00:06 +0000

Yes, it’s true–All Things Digital is expanding. And, for our first trick–ta-da–we bring you: D: Dive Into Mobile.

The new conference represents the very first brand extension of our D: All Things Digital conference, now in its ninth year of grilling the big names in tech and media to sold-out analog audiences and scores more on the Web.

And, as always, there will be no PowerPoints, no panels and definitely no pontificating.

What there will be are unrehearsed, unscripted and unexpected interviews with top players, taking a big-picture view of the broader digital landscape.

But, unlike big D, D: Dive Into Mobile is topic-focused, drilling down deeply into the ubiquity of mobile technology and devices, and its implications for brands, organizations and consumers worldwide.

Offering a more intimate and focused conference setting, D: Dive Into Mobile will feature a gathering of industry heavyweights, including: Dan Hesse, President and CEO of Sprint Nextel (S); Mike Lazaridis, co-CEO of Research in Motion (RIMM); Mike McCue, CEO of Flipboard; Joe Belfiore, Vice President of Windows Phone Program Management at Microsoft (MSFT); Andy Rubin, Vice President of Mobile Platforms for Google (GOOG); Jon Rubinstein of Palm, now owned by Hewlett-Packard (HPQ); Foursquare CEO and Co-founder Dennis Crowley; and several more big speakers to be announced soon.

D: Dive Into Mobile will be held at the Ritz-Carlton in San Francisco on December 6 and 7 and, as usual, we’ll be liveblogging the whole thing and also posting highlight videos.

Along with Walt Mossberg and I, Mossberg Solution’s Katherine Boehret and MediaMemo’s Peter Kafka will be conducting the interviews.

But there’s nothing like being there, so you can sign up for the D: Dive Into Mobile conference here.

ATD has much more to come, of course, including D9 from May 31 to June 2, so watch this space for our next prestidigitation.

And, to give you an idea of how we run a D event, here are some greatest-hits videos from past conferences, including that famous joint interview with Apple (AAPL) CEO Steve Jobs and Bill Gates of Microsoft, as well as Jeff Bezos of Amazon (AMZN), Yahoo (YHOO) CEO Carol Bartz and Mark Zuckerberg of Facebook.

[ See post to watch video ]

Yahoo Snags Citizen Sports

John Paczkowski — Wed, 17 Mar 2010 17:39:00 +0000

BoomTown was right: Yahoo is indeed buying online sports site Citizen Sports, a developer of sports-related apps and games for Apple’s (AAPL) iPhone and for social networking sites like Facebook. Financial terms of the deal were not disclosed, but as BoomTown noted on Monday, estimates put Citizen’s selling price at about $40 to $50 million.

The acquisition is a savvy one for Yahoo (YHOO), which already has a strong sports content business and stands to benefit from the additional social networking and mobile integration that Citizen Sports offers.

Below, the official announcement:

Yahoo! to Acquire Citizen Sports

Strengthens Social Strategy by Combining the Power of the No. 1 Online Sports Destination with the Web’s Most Popular Social Sports Company

SUNNYVALE, Calif., Mar 17, 2010 –As part of its ongoing commitment to be the center of people’s online lives, Yahoo Inc. (NASDAQ:YHOO) today announced it has signed a definitive agreement to acquire Citizen Sports (http://www.citizensports.com), a company that brings the world of sports to fans’ favorite social networking sites and mobile devices through innovative applications. This acquisition will strengthen Yahoo!‘s social strategy of enriching, aggregating and distributing social content from across the entire Web, and offering a highly customizable social experience.

“Yahoo! is in a unique position to combine our deep expertise in content and aggregation technology to offer a highly personalized social experience,” said Bryan Lamkin, senior vice president, Consumer Products Group, Yahoo!. “Sports has been among the earliest online categories to experience rapid social proliferation, and the combination of Citizen Sports leading products with our world-class sports experience on Yahoo! Sports is a win-win for sports fans globally.”

Millions of people across the globe use Citizen Sports’ array of social and mobile products to play fantasy sports, fill out brackets, check live scores and read up-to-the minute news on sports including football, hockey, soccer, baseball, racing, rugby, hockey and cricket. Yahoo! Sports’ content will be integrated into these products, creating a seamless experience for sports fans wherever they are. On Yahoo! Sports, users will be able to broadcast their allegiances, create or join a conversation with friends and fans and cheer for their teams through Citizen Sports’ applications. This integration will further transform Yahoo! into a more personally relevant experience, drive deeper user engagement and create opportunities for advertisers to interact with audiences in new environments.

As the #1 destination for online Sports with more than 39 million monthly unique users in the U.S.*, Yahoo! Sports provides people with the most timely, relevant and comprehensive sports news, information and programming. Citizen Sports’ network of popular applications for Facebook, MySpace (NYSE: NWS), hi5, iPhone and Android span professional, college and high school sports.

“Citizen Sports was founded with the intent to enable fans to access news, scores and fantasy games on the platform of their choice,” said Mike Kerns, founder and CEO of Citizen Sports. “We look forward to becoming a part of Yahoo! and bringing our social experiences to their 600 million users around the globe.”

Citizen Sports was founded by Mike Kerns and Jeff Ma in 2004. Since then the company has brought together millions of sports fans from around the world to enjoy sports and connect with their friends. Citizen Sports is based in San Francisco.

Yahoo! expects to complete this acquisition in the second quarter of 2010. Financial terms were not disclosed.

Going, Going…Most of What's Left of Joost Goes to Adconion Ad Network

Peter Kafka — Tue, 24 Nov 2009 13:57:21 +0000

The tale of Joost, the would-be online video heavyweight, is almost at an end. Most of the company’s remaining assets have been sold off to Adconion Media Group, the two companies announced today.

What exactly did Adconion buy? Some of Joost’s technology, as well as its trademark, and about a dozen of the company’s remaining 25 employees, a spokeswoman says.

So what does that leave? Does any part of the original Joost survive as an operating company? “I believe so,” says the spokeswoman, who is going to get back to us about that.

Price? Your guess is as good as mine. But I’m guessing it’s not going to be very much, and nothing close to what investors like Sequoia, Index and Viacom (VIA) were hoping when they plowed $45 million into the company more than two years ago. Index, by the way, is also an investor in Adconion and led an $80 million C funding round in February 2008.

In any case, this is all a matter of “i” dotting and “t” crossing, as Joost has officially been in hospice mode since June, when the company laid off most of its employees and replaced CEO Mike Volpi. Prior to that, Volpi and his investors had been trying to broker a sale of the company, hoping that they could convince a big infrastructure player like Comcast (CMCSA) or Time Warner Cable (TWC) to bail it out.

No dice, though Time Warner Cable did end up hiring some technical help from Joost.

ADCONION MEDIA GROUP ACQUIRES JOOST ASSETS

New Capabilities Provide Advertisers, Content Owners and Publishers with an End-to-End
Cross-Channel Video Solution

SANTA MONICA, CALIF. – NOVEMBER 24, 2009 — Adconion Media Group (www.adconion.com), the largest independent global audience and content network, announced today that it has acquired certain assets from privately-held Joost, the online video service. Terms of the transaction were not disclosed.

“Video is a top priority for our company, and through the acquisition of the Joost assets we will be able to provide advertisers, content owners and website publishers with an end-to-end global video platform and cross-channel video and display ad-serving solution,” said Tyler Moebius, CEO, Adconion Media Group. “This acquisition immediately brings additional scale and content to the Adconion video pre-roll network for clients who are looking for a safe, cost-effective alternative to achieve the maximum value of online video advertising. We’ll also continue to operate Joost.com, providing clients with a destination site to showcase and distribute their branded entertainment content.”

In June, Joost announced a change in its business strategy to focus on providing white-label video platforms, and Adconion plans to pursue this strategy. On Friday, Adconion announced its first long-term licensing partnership as the exclusive display and video ad-serving solution for the Goldbach Media Group in Europe.

The acquisition of Joost assets adds many dimensions to Adconion’s existing video services and further will solidify its position in the online video and content syndication market. Prior to the acquisition, Adconion offered targeted distribution of content, including video and television commercials, to audiences around the world via Adconion.TV; as well as customized branded entertainment solutions for clients through its exclusive relationship with the digital studio RedLever. Through the Joost acquisition, Adconion.TV will add to its library of professionally-produced video content available for targeted pre-roll advertisements across 2,000 premium publishers.

Janus Friis, co-founder of Joost, said, “Over the past few months we have been actively exploring strategic options for Joost, and have concluded that the sale of certain of its assets to Adconion is in the best interests of Joost. Adconion has a strong technological platform and a compelling business model, and we believe that both businesses will benefit as a result of this acquisition.”

A leader in advertising innovation, targeting and distribution, Adconion reaches nearly 300 million unique users on a monthly basis. Prior to the Joost acquisition, Adconion was serving more than 80 million video streams per day to targeted audiences across 2,000 global websites.

A Tall Tale: Did Twitter Really Save Tarantino's "Inglourious Basterds"?

Peter Kafka — Mon, 24 Aug 2009 17:37:34 +0000

Earlier this summer, Twitter was blamed for torpedoing movies like “Bruno” and “Funny Business.” Now the micromessaging service is being heralded for giving Quentin Tarantino’s “Inglourious Basterds” a big boost.

The movie, an over-the-top retelling of World War II featuring a squad of Jewish Nazi hunters, brought in $37 million at the box office this weekend, which is about $10 million more than the Hollywood prognostication machine expected.

In the old days, you’d simply chalk up the difference to the fact that the Hollywood prognostication machine sometimes gets things wrong. But now when this happens, the impulse is to blame or praise Twitter. The theory: Audiences go to see the movie on Friday, then quickly tweet their 140-character reviews to their pals. This either keeps moviegoers away for the rest of the weekend or makes them flock to the theaters.

All of this sounds believable enough, but I have yet to see anyone spell out exactly how it works. The Hollywood Reporter, for instance, is a big proponent of the “Twitter saved Tarantino” theory. But its evidence is awfully weak: It just notes that some Twitter messages about the film have been positive.

At least NewTeeVee tries to put some numbers behind the argument. Using data from tracking service Trendrr, it notes that the volume of Tweets about the film increased over the weekend (see chart; click to enlarge).

Of course, volume alone doesn’t indicate anything: For all we know the messages were fixated on the mustache Brad Pitt’s character sports in the film. And in any case, we’re a long way from correlating Internet messages with real-world actions–just ask former presidential candidate Ron Paul’s ardent cyberfans.

But marketing always involves at least an equal part art for every part science, and when you add a superhyped, very new phenomenon like Twitter to the mix, all bets are off. Given the way these things work, expect Hollywood to assume that Twitter can now make or break a movie. And there will be an opportunistic flock of “social media” gurus ready to assure them–for just a small monthly retainer–that their insight is correct.

In case you haven’t seen it (left unmentioned in these reports is the fact that the movie got a very big conventional marketing push), here is an “Inglourious Basterds” trailer. And below that, one of my favorite scenes from “Pulp Fiction,” Tarantino’s 1994 breakthrough. (Be warned! These are Tarantino movies, and the second clip is unedited, which means you’re going to get some potentially NSFW cursing and gore. Enjoy!)

Confirmed: CBS Interactive Restructuring After CNET Deal, Cutting Staff

Peter Kafka — Thu, 11 Dec 2008 15:46:03 +0000

As I noted earlier this week, CBS had yet to announce any cuts or restructuring after acquiring CNET this summer for $1.8 billion. That changes today, CBS (CBS) confirms in a statement:

CBS Interactive continues its integration process, which now calls for the further combination of several portions of the division into unified groups oriented around similar content. This important move allows us to better align our premium content for our audiences and our advertisers, and also results in reduction in certain areas that are now duplicated in the new organization structure. We believe these moves are necessary to continue building CBS Interactive into the most creative, most efficient, most profitable and fastest growing Internet company in the media business.”

News of the re-org was first reported by paidContent this morning. No details yet on how the restructuring will play out, though a person familiar with the situation did confirm that the company will push CNET’s News.com news site and CBS’s own CBSNews.com units closer together. Both groups have already been reporting to former CNET exec Joe Gillespie since the merger went through this summer. More details as I get them.

UPDATE: Here’s the complete re-org memo.

A note to CBS employees: Since this is one story you folks are going to have a hard time covering, feel free to pass along your tips to me. You can reach me directly at peter@allthingsd.com. If you want to be completely anonymous, which is understandable but less useful to me (I won’t have any way of reaching you for follow-up) you can use the blind tip box here.