He is forecasting that mobile commerce — purchases made from apps or the browser on a phone or tablet — will hit $8 billion in mobile gross merchandise volume this year, up 60 percent from $5 billion in 2011.

Donahoe made the predictions last night in Las Vegas, where he gave the keynote at a technology dinner for leaders of the Consumer Electronics Association.

Additionally, the company predicted that PayPal will reach $7 billion in mobile total payment volume this year, increasing from $4 billion in 2011.

He made the bold predictions despite the recent unsettling departure of PayPal President Scott Thompson to join Yahoo as CEO, indicating that he is still confident about PayPal’s mobile future.

During the keynote, Donahoe also announced that Best Buy was its newest partner to use the RedLaser barcode scanning app to offer local in-store pick-up services. Other companies that offer it today include Toys “R” Us.

Other big data figures: 

• EBay Mobile currently has more than 65 million downloads of its mobile applications across all platforms.
• More than 890,000 new eBay shoppers made their first eBay purchase through the company’s mobile apps in 2011, a 113 percent increase year over year.
• PayPal’s original prediction for 2011 was that it would achieve $1.5 billion in mobile total payment volume for 2011. Instead, it hit $4 billion. A year earlier, it totaled only $750 million.

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The drop-off in players affected almost all developers, but did not hit all titles equally.

For example, Electronic Arts saw 1.2 million fewer monthly users over the past week for its top title The Sims Social; Zynga’s Empire & Allies game lost one million monthly users, and its newest game, CastleVille, lost 900,000, according to AppData, which publishes such information.

On the flip side, many of the games that performed well were old favorites; these logically would have longer-term, more-committed players, who would make a point of returning during the holidays to take advantage of seasonal promotions.

The games that benefited from the holidays include Zynga’s Words With Friends and FarmVille, which gained 1.3 million and 800,000 monthly active users, respectively, according to Inside Social Games. Other gainers rounding out the Top 5 were Tetris Online’s Tetris Battle; Wooga’s kingdom-building game, Magic Land; and Men vs. Women, a role-playing game by Social Point.

Still, the general direction for the week was heading down.

That contrasts with other game platforms, such as consoles, PCs and mobile, which largely benefit from the holidays and from more free time in general.

Console games often skyrocket in popularity as kids and adults unwrap new titles for Nintendo, Xbox or PlayStation on Christmas morning.

PC gaming also typically surges during the season. EA timed the launch of Star Wars: The Old Republic ahead of the holidays, in hopes of drawing new players who would be sold on sticking around for months, after spending time on the game during their time off.

But perhaps the biggest competitor came from mobile, which benefited from breaking records for the number of new Android and iOS devices that were gifted during the holidays. Flurry reported that more than one billion apps were downloaded worldwide during the last seven days of 2011, breaking the all-time weekly record. Games are often one of the most-downloaded categories of apps.

So the more important question to ask is, why would Facebook be an exception, if other platforms performed well?

Clearly, all of the platforms are competing for a limited number of minutes in the day, and so are other forms of media, like the Internet, TV and the movies. But when it comes to Facebook, a larger driver may be the environment — after all, it’s no big secret that a lot of social networking and social gaming is done in the workplace.

In a study conducted last summer, advertising agency Saatchi & Saatchi found that 47 percent of respondents said they play social games at work during a typical day, and that 28 percent play for at least 30 minutes. Without that dedicated time in front of the computer every day, people may have had the opportunity to be more obsessed with other screens, such as phones or TVs.

Another potential reason that Facebook and social games did not see a lift from the holidays is because they have not yet figured out how to capitalize on the Christmas economy.

For years, console games have been timed with the end of the year, so they could be wrapped up and placed under the tree. More recently, smartphones and gift cards for music and apps have helped mobile prosper. Perhaps there wasn’t enough hype and promotion for social games to compete for people’s dollars.

Regardless of the reasons, the drop may ultimately be a small a blip on the radar screen for most game developers, who also see several spikes in activity during the year.

The bigger impact may be felt at Facebook, which takes a 30 percent cut of all virtual goods sold inside social games, and would feel the cumulative impact across all of the games.

In a new report, Flurry Analytics estimates that in the final seven days of 2011, 1.2 billion apps were downloaded worldwide across both Android and iOS, representing a 60 percent jump over a typical week.

More important, it is the first time the globe has punched through the billion-download mark, according to the technology company, which builds tools that thousands of developers use to track usage of their mobile applications.

Flurry had said last week that a record-breaking 6.8 million iOS and Android devices were activated on Christmas Day, along with an equally record-breaking 242 million application downloads. For the entire week, it now is estimating that 20 million iOS and Android devices were activated.

Additionally, Flurry discovered that Americans represented the biggest app addicts, downloading 509 million of the worldwide total.

The remainder of the top five countries are: China (99 million); the U.K. (81 million); Canada (41 million); Germany and France (40 million each).

In the new year, Flurry is forecasting that application downloads will frequently break the one-billion-a-week mark.

In 2011, it added, Apple’s App Store was on pace to exceed 10 billion downloads, which was twice the number it recorded over the three previous years combined. Likewise, the Android Market is also setting records. Over the past seven months, it achieved more than seven billion downloads, taking its life-to-date total past 10 billion.

(Image credit: iStockphoto | mbortolino)

The latest title in the adventure series will be called Escape From Ravenhearst, and even though its arrival is highly anticipated, the company doesn’t consider it to be one of its big hits.

That’s because Big Fish doesn’t really have one clear hit.

Mystery Case Files has been played by 100 million people on the PC over the past two years, but the game series can’t really be considered a hit, because it did not generate more than 2 percent of the company’s overall revenue.

In fact, not one of the company’s other approximately 300-plus titles released each year made up a greater percentage, according to a spokesperson.

For comparison’s sake, look at pop-culture phenomenon Angry Birds, which has been downloaded 500 million times. And then there’s Zynga, the top game maker on Facebook. It reported that at one point last year, three of its titles — Mafia Wars, FarmVille and Zynga Poker — comprised 32 percent, 29 percent and 20 percent of its online game revenue, respectively.

If you want to play Ravenhearst, expect to pay for it and then download it to your PC.

Mystery Case Files, which uses dark graphics and rich storytelling, will cost $14 to those who subscribe to the Big Fish game portal, and $20 for non-subscribers. (Note: Not all of the 100 million players paid for the games, since there’s the option to try before you buy.)

Here’s the company’s trailer for the game:

That has yet to happen. And if it ever does, it won’t be anytime soon: Gartner projects that by the end of 2015 digital music revenue may hit $7.7 billion worldwide, while CD sales will still be around $10 billion.

But there’s something else that really struck me about Gartner’s newest numbers. Take a look and see if you can figure it out:

Catch it? Took me a minute, because I couldn’t figure out what “Personalization Services” were. What kind of name is that for a $2.1 billion industry?

Here’s the English-language definition, via Garnter’s PR team: “The ringtones and ring-back tones that consumers pay for to use on their mobile devices. Typically, these can be acquired directly from service providers and synched to the mobile phone over the air, or can be acquired via a PC or connected device and then synched to the mobile phone.”

To sum up: More than 10 years after Napster, one of the key pillars of the music business is ringtones, a business that peaked around 2005, when some of you would have recognized the image at the top right of this post.

If you’re reading this, you probably haven’t paid for a ringtone since 2007, and you probably don’t know anyone who does. But there it is, generating two-point-one-billion dollars.

And Gartner thinks ringtones won’t die off anytime soon — four year from now, it thinks it’s still a billion-dollar business. Meanwhile downloads, dominated by Apple’s iTunes, are going to grow ever so slowly. Which means that if digital music is ever really going to take off, it’s going to be up to subscription services like Spotify, which up until now haven’t gained any real traction.

Gartner figures that will change, and who knows? Perhaps the Facebook fire hose that’s spraying Spotify at the social network’s 800 million users will work. So far, the signs are encouraging.

But if that doesn’t work, things are going to look as grim as ever — a flatlined CD business, a slow-growth download business controlled by Tim Cook, and … Crazy Frog.

[Image via Wikipedia]

As reading moves ever faster from hardcovers and paperbacks to electronic gadgets, the retailer is attempting to reinvent itself as a seller of book downloads, reading devices and apps.

The shift was never clearer than last January, when a small group of experienced book buyers at the company was called in and dismissed. Barnes & Noble’s buyers were once book-selling royalty, minititans whose taste played a pivotal role in deciding which books danced up the charts.

For the bookseller there was little choice. It needed to invest in the future.

Read the rest of this post on the original site »

The first promotion–kicking off at midnight–will give customers who buy an Android device from Verizon Wireless $25 to spend on applications from the Amazon Appstore.

The offer ties together Amazon’s wireless store, which sells a variety of phones for all the major wireless carriers, and its brand new Appstore, which is an independent catalog of apps for Google’s Android operating system.

It also leans on tight relationships Amazon has formed with carriers, said David Camp of Amazon Wireless.

The promotion will continue for a week, and is only valid on Android phones purchased by Verizon, including the new HTC Thunderbolt, which runs on its speedy 4G network.

The promotion is designed to give Amazon’s Appstore, which just launched last month, a boost. But it also hints at the company’s interest in Android and a broader strategy it could be pursuing.

So far, it’s unclear how well the storefront, which is accessible on the computer and the handset, has been received–and Amazon is not sharing download figures. But it has almost doubled the number of apps available for sale from to 7,500 from 3,800 over the past few weeks.

That’s despite the fact that the International Game Developers Association cautioned game-makers about Amazon’s strict pricing conditions. Downloads could also be soft due to the fact that AT&T has blocked users from being able to download third-party apps, including from Amazon’s Appstore, to Android devices. The U.S. storefront is available to users from T-Mobile, Verizon and Sprint.

So far, Amazon’s interest in the wireless industry has seemed a little scattered. However, this promotion starts to bring it into focus, and hints at how Amazon could weave together its strategies to drive sales to its own properties.

It also shows how important the retailer could be to Google.

Today, Camp says that Android devices are the best sellers on its storefront (the big caveat is that it doesn’t sell the iPhone).

Beyond its cellphone store at AmazonWireless.com and the digital Appstore, Amazon has also released a bevy of applications, including shopping portals, barcode scanners, Kindle apps for virtually every device and an MP3 store. More recently, it rolled out a Cloud Player, which allows people to store their music and other digital content in the cloud, making it accessible from both Android devices and an Internet-connected computer.

Monday’s promotion is just the start. “We will continue to do things like this in the future,” Camp added.

UPDATE: The PlayStation Network continues to be down with no estimated time for recovery.

The problems were first addressed on Wednesday on the PlayStation blog, and in a troubling update yesterday, Patrick Seybold, the company’s senior director of corporate communications and social media, said it could be another day or two before they are back online.

“While we are investigating the cause of the Network outage, we wanted to alert you that it may be a full day or two before we’re able to get the service completely back up and running. Thank you very much for your patience while we work to resolve this matter. Please stay tuned to this space for more details, and we’ll update you again as soon as we can.”

A Sony spokesperson declined to comment further on the situation.

For now, while the outage corresponds with Amazon’s cloud difficulties, which has now been officially out for more than a day, there are no signs that there is any correlation between the two.

In fact, Sony’s outage is being blamed on Anonymous, the same hacker group involved in retaliation efforts surrounding the Wikileaks shutdown, because they were involved again earlier this month in shutdowns on various Sony sites, reports the Christian Science Monitor. It’s also plausible that something far less sinister, like routine maintenance, brought the network down.

Regardless, the outage is bad timing. Consumers are up in arms, as they were eager to play recent releases such as Mortal Kombat, Portal 2, SOCOM 4, and inFAMOUS 2′s beta release.

A user who goes by the name of mixedkidbx wrote: “WHAT???? MORTAL KOMBAT just came out and now i cant play online. I cant play 80% of my games that have online functions.” In another post, he added: “Right i got the inFAMOUS 2 beta too.”

The Sony PlayStation Network is similar to Xbox Live, and serves the same purpose of trying to extend the life of the console by adding new content via the Internet. It has 70 million registered accounts worldwide who have downloaded more than 1.4 billion pieces of content.

According to comments on the PlayStation blog, the platform is well used and is being missed. On average, at least two-thirds of PSN registrants play an online game once a week or more, and more than 70 percent of registrants make at least one purchase. In January, PSN reported its fifth highest month for revenue to date.

The deal hints that Rovio, the developer of the insanely popular Angry Birds, is confident that Amazon can help monetize games on the Google platform.

When the Appstore launches, Rovio will also launch free and paid versions of Angry Birds and Angry Birds Seasons, which have already been out on the iPhone for some time.

With the launch of the paid applications on Amazon, it will mark the first time that Rovio has charged money for apps on the Android platform.

Android has notoriously been difficult to monetize because it relies primarily on Google’s own payment platform, which not all Android users have signed up for.

Amazon has not yet said when the Amazon Appstore will launch, only that it will be sometime soon. Over the past few months, it has been drumming up support among developers for the upcoming launch.

Developers are now hopeful that Amazon’s deep expertise in retail will help with discovery and monetization on the smartphone platform, which is rapidly gaining market share with 30 million users.

Rovio, which recently raised $42 million in capital, will have high expectations.

In all, it has been able to generate 100 million downloads across all mobile platforms.

Rio will feature the animated stars of the studio’s upcoming motion picture, “Rio.” In the game, the Angry Birds are kidnapped and taken to the city of Rio, where they have to escape their captors. The game will launch with 60 levels, and more will be available in following updates. The movie, which was created by the same people behind “Ice Age,” will debut worldwide April 15.

“The Android platform has seen phenomenal growth, and it’s great that new avenues for app distribution are opening up,” said Rovio’s CEO Mikael Hed in a release.

But a small San Rafael, Calif.-based videogame company thinks it has the winning formula as the business moves to digital.

Today, Telltale Games is announcing an exclusive worldwide publishing agreement with Warner Bros. Interactive Entertainment to develop videogames for the comic-book series Fables, and an exclusive worldwide agreement to develop and publish a series of videogames based on the AMC cable network’s zombie hit “The Walking Dead.” It’s also working with Universal Pictures on “Back to the Future” and “Jurassic Park” games.

The past eight years for the company haven’t always been so rich.

Starting a new videogame company focused on digital downloads in 2003 was a little early (to say the least), so much of the last few years were spent experimenting, developing its own original games and staying afloat by doing work-for-hire projects.

Now, it’s ready for those days to be a thing of the past.

Steve Allison, SVP of marketing for Telltale Games, said that finally the market has caught up with its ambitions.

In 2010, the company’s revenues totaled $10 million, increasing nearly 90 percent over the previous year. This year, revenues are expected to grow at the same pace, and the studio is expected to jump to 140 employees from 90. So far, it’s raised $6 million, and more is expected to close any day.

Allison said the magic is all in Telltale’s formula for building games in bits and pieces–a mission that fits squarely with today’s trends.

Last year, unit sales of PC games via download outstripped sales of boxed games in stores for the first time, according to research firm NPD Group. Based on Telltale’s own back-of-the napkin estimates, it believes that’s a market that could hit $3 billion by 2012.

Telltale’s games are written as a narrative or a cinematic adventure and are divided into five separate episodes. Players download a new one every four weeks for a six-month period. A season pass for a game, including all episodes, costs roughly $35.

Telltale then repeats the process and sells the games across a combination of consoles, mobile devices, tablets, PCs and Macs.

As an example, the company recently released the first episode of “Back to the Future.” The plot picks up six months after the end of the third film, and Marty McFly must help save Doc Brown.

Allison said they can hit profitability on games like these after 100,000 units are sold. Today, the company averages 200,000 units sold across all its titles.

With these new blockbuster titles coming soon, Allison said the goal is to produce a title that hits one million digital downloads, and thinks “The Walking Dead” could become a $20 million to 30 million franchise if all goes well.

However, licensing content from movie studios or other publishers has not always been a recipe for success. Steep fees and up-front guarantees have buried companies in the game industry in the not-too-distant past. ”‘See the movie, play the game’ doesn’t work anymore,” Allison acknowledges, “but the way we make content, it does.”

He says his team works closely with the original filmmakers and screenwriters. “We do want mass-market brands that have a lot of fans, but we want to pay homage to them. We aren’t re-creating ‘Back to the Future,’ we are continuing the adventures of Marty and Doc.”

Additionally, he said, the publishers are more realistic now. “They don’t break the business model, but they do put a little weight on it.”

The new games will trickle out over the next year and will be available on the company’s Web site, and also through downloading services, like Valve-owned Steam.

The company’s nine-month results ended Dec. 31 included revenues of $954.6 million, jumping 80 percent, compared with the same period a year earlier. In that same period, income from continuing operations totaled $76.2 million, or 88 cents a diluted share, compared with a loss of $98.4 million, or $1.27 a share, for the year-ago period.

Third-quarter net revenues totaled $334.3 million on earnings of 45 cents per diluted share. That easily beat analyst expectations, which had forecasted revenues of $314 million and earnings per share of 34 cents.

The New York-based game maker, known for hit titles such as Grand Theft Auto and NBA 2K11, also increased its financial guidance for the fiscal year 2011. The company now expects revenues of $130 to $150 million in Q4, and revenues of up to $1.1 billion for the year ending March 31.

The company’s forecasts now call for Q4 non-GAAP earnings per share to be in the range of a loss of 40 to 45 cents, and for the year from 80 to 85 cents to easily beat analysts’ previous expectations of 62 cents for the year.

In a release, Strauss Zelnick, chairman and CEO of Take-Two, said strong holiday results enabled the better-than-expected results. Going forward, it’s evaluating new revenue streams. “These include opportunities in Asia and Latin America, evolving downloadable content models and online multiplayer experiences,” he said.

More to follow after the company’s earnings call.

The App Store is now roughly two-and-a-half years old and offers software for a number of categories in 90 countries, ranging from games, news, sports, health, reference and travel.

Apple took advantage of today’s milestone to highlight several new figures: In addition to revealing that it now has 160 million iOS users in the world, it said there are more than 350,000 applications in the App Store that are accessible to users in 90 countries. Of that application base, there are more than 60,000 apps available for the iPad.

“The App Store has surpassed our wildest dreams,” said Philip Schiller, Apple’s SVP of Worldwide Product Marketing in a release. “While others try to copy the App Store, it continues to offer developers and customers the most innovative experience on the planet.”

Apple said the 10 billionth app downloaded was “Paper Glider,” which was purchased by Gail Davis of Orpington, Kent, in the U.K. Davis will receive a $10,000 iTunes gift card.

As a point of reference, Apple said in September 2009 that there were 50 million iPod and iPhone users, making the 160 million number announced today fairly significant.

It’s not a complete failure, apparently, as Nokia will continue to support the service in six countries, including China. But it will pull the plug in 27 other countries. (It never arrived in the U.S.)

The idea, pushed in large part by Vivendi’s Universal Music Group, was that consumers would pay a premium for certain Nokia phones and get access to all-you-can-eat music.

A couple of problems, per Reuters: Consumers didn’t want it, and carriers didn’t support it.

It’s possible that the Nokia plan was sunk because of a complicated digital rights management scheme that more or less locked the music onto the phones. But it may be that people just aren’t that interested in paying for all-you-can-eat music, whether that payment is bundled into the price of the phone, or via a month-to-month subscription service.

In the U.S., there is no shortage of the latter–Rhapsody, Best Buy’s Napster, MOG, Rdio, Thumbplay, etc.–but they haven’t caught on despite years of effort. In Europe, for now, Spotify seems to be gaining some traction–people familiar with the company say it now has one million paying subscribers, up from 750,000 last fall, but that’s still not mainstream.

Subscription services were supposed to get more popular once they started playing nicely with Apple’s iPhone, but that has kicked in over the past couple of years without any noticeable bump. Now subscription advocates are pining for another boost from Google, which they imagine will end up partnering with one of the services instead of building its own.

And if Google wanted to, say, provide every Android buyer with a couple months of free subscription music, they argue, then subscriptions might finally catch on.

Could be! But I wouldn’t count on it.

Bubble Ball, a physics simulator, was coded by Robert Nay, a 14-year-old from Spanish Fork, Utah. The game challenges players to use objects and gravity to guide a ball to its destination.

Nay spent the better part of a couple of months writing the game, which debuted in the App Store late last year and is also available for Android devices. In recent days, though, it has been rivaling Angry Birds Lite atop the list of most downloaded free games.

“I was pretty surprised by how well it was doing,” Nay told Mobilized. Nay said he plans to add more levels to the free game and then eventually add still more games as an in-app purchase. He also has some other ideas for games he’d like to write down the road.

Although it’s his first game, Nay has been into computers for some time, including Web programming and helping others with their computers. When he’s not at the computer (or school) he also likes reading, especially science fiction, and playing the piano and trumpet.

Some months back, a friend suggested that if Nay liked his iPod touch so much, perhaps he should try his hand at programming for it. At first he tried the standard Objective-C programming tools, but found the learning curve a little steep. He tried another tool called GameSalad, but didn’t like the results. In the end, he settled on the Corona tools from Ansca Mobile. Corona was easy to use, he said, and also let him write once and publish for both Apple and Android devices.

Bubble Ball showed up in the app store on Dec. 29 and had a million downloads in the first two weeks. Last Thursday, it topped the App Store free chart and had more than 400,000 downloads on that day alone.

Robert’s mom, Kari Nay, drew some of the levels of the game, though Robert did all the coding. Kari Nay also handles the business tasks, such as submitting the apps to the App Store and Android marketplaces.

“I do the grown-up stuff for him,” she said.

The latest statistics released today from NPD Group estimated that consumer spending on game content totaled between $15.4 and $15.6 billion, which was flat to down 1 percent, compared to 2009. Meanwhile, sales of new physical videogame hardware, software and accessories were also down–6 percent, to end the year at $18.6 billion.

Microsoft was able to counteract those industry-wide trends through the successful launch of its Kinect hands-free controller and strong sales of the hit game Call of Duty: Black Ops.

Sales of the Xbox 360 jumped 42 percent year-over-year, and was the only platform to register an increase in unit sales. In fact, December 2010 was the best month ever for Xbox 360 sales after selling 1.9 million units.

After the figures were released today, Microsoft used the moment to toot its own horn: In a statement, it said it had pulled units from its January and February production to keep up with holiday demand for both Xbox and Kinect–and it still sold out in some circumstances. Now it’s scrambling to catch up.

At CES, Microsoft said that roughly eight million Kinects had been sold after being on the market for roughly two months, and that over 50 million Xbox 360s have been sold worldwide over the lifetime of the console.

The videogame industry is very cyclical, with software sales often trailing new hardware sales. Without new console introductions from the usual suspects, Microsoft has tried to increase sales by repositioning the Xbox as an entertainment hub, and relied on the Kinect to make the console appeal to a wider audience outside hard-core gamers.

Nintendo is hoping that its new 3DS gaming handheld will boost sales–however, it doesn’t come out for another couple of months, so it missed the critical holiday season and will face competition from smartphones.

NPD Group concluded that in December the Wii and the 360 platforms generated the greatest dollar sales of all platforms at 32 percent and 31 percent, respectively. That’s across all categories, including hardware, software and accessories.

Other than Xbox, there were some bright spots, but it wasn’t enough to offset overall declines. NPD Group said the highlights included digital downloads, mobile apps, social network games and non-digital stuff, like used games and PC games.

The numbers released today are early estimates. NPD Group said it will issue its final analysis in March.

The San Francisco-based company has accumulated 550,000 iPhone downloads and 300,000 monthly Web site visitors, and has just released an Android app. It launched only last year.

Foodspotting is competing with the likes of Yelp, which is known for restaurant reviews but also includes all sorts of local businesses. However, Foodspotting allows only positive reviews of food, with the idea that a user would show up at a restaurant or in a neighborhood and glance at the app to quickly zero in on the best dishes to order.

Check out this recent NetworkEffect post on the bountiful competition in the sharing-pictures-of-food sector.

Foodspotting had just raised $750,000 from Felicis Ventures, 500 Startups and High Line Venture Partners in July 2010.

We have a video interview with Foodspotting CEO Alexa Andrzejewski that I’ll post later on, but unfortunately the press embargo on this announcement was broken before I’d encoded the video. In our interview, Andrzejewski justified how such a seemingly narrow project, especially in such a competitive market, could have broad appeal.

Confused by all those options? There’s also a basic RunKeeper app that has enough tracking and reporting features for many users and has always been free. I wrote recently about its social features.

Apple recently said RunKeeper Pro was one of its top-grossing apps of 2010. FitnessKeeper, a small Boston-based start-up that just raised $1.1 million in funding, wouldn’t disclose revenue or download numbers, but said it has been cash-flow positive every month since it was founded two-and-a-half years ago.

The company announced this week it would take down one part of its pay barrier from now through the end of January, giving away RunKeeper Pro for free during New Year’s resolution season.

Launched yesterday on iPhone, that promotion has already been highly successful, with 171,000 RunKeeper Pro downloads yesterday on the iPhone, more than 10 times as many as it gets in a normal day. The app is currently quickly climbing the Apple App Store charts, now at No. 5 in the free app category (it was No. 12 this morning). The promotion is also launching on Android this afternoon.

And as of this writing, it’s only New Year’s resolution time in about half the world.

• When Wired magazine launched on the iPad in June, it racked up more than 100,000 downloads. By November the number dwindled to between 22,000 and 23,000.
• Vanity Fair, which sold about 10,500 iPad downloads in August, saw sales drop to 8,700 in November.
• Glamour saw a 40 percent decline in iPad sales between September, when it sold 4,301 copies, and November, when it sold just 2,775.

There were other declines as well, all helpfully catalogued over at Memo Pad, but you get the idea.

Seems that iPad magazines haven’t yet captured the public’s attention. Why? Overpricing, perhaps. Why pay $5 a pop for a digital copy of a publication you can subscribe to for $10 a year? Of course, the larger issue is the publishing industry’s insistence on using new platforms like the iPad to ape antiquated models like print, when it could be using them to develop entirely new ones. Just because you can arrange a pile of massive image files into a digital magazine doesn’t make it a good one.

In the first 25 days at market, Microsoft sold 2.5 million Kinect accessories and now aims to sell five million this holiday season. The sales helped the Xbox become the best-selling console in November.

The Kinect is a motion detection system similar to the Nintendo Wii, but is hands-free and doesn’t require any controllers. Xbox 360 owners can purchase one for $150.

During our visit last week to the Xbox offices in Redmond, Wash., Craig Davison, the senior director of marketing for Xbox LIVE, told us the goal is to broaden the audience for Xbox. He said the competition is no longer limited to PlayStation or the Wii, but extends to Google TV and Apple TV.

Hard-core gamers enthralled with Call of Duty and Halo may shudder at the prospect, but the trend is already in play.

But adding a new kind of player to the platform is critical if Microsoft wants the console to be an entertainment hub. Kinect allows users who’ve never picked up a controller to play, and brings new functionality to hardware, which historically has been marketed as something that must be replaced frequently.

Game console owners are most likely to use the boxes to play games and watch DVDs, but after that, Nielsen reports, entertainment services are a close third. Video-on-demand and streaming services such as Netflix, MLB Network and ESPN3 account for 20 percent of Wii users’ time, 10 percent of Xbox 360 users’ time and 9 percent of PlayStation 3 users’ time.

Davison said the demographics for Xbox started to shift in 2008 when it introduced Netflix streaming to the console. Since then, it has launched a partnership with ESPN, and will launch Hulu Plus early next year. It’s even helping out the top line: Close to 85 percent of Xbox Live’s revenues come from games, with the remainder coming from Zune, he said.

Here are some other numbers to consider:

–Since the launch of Zune on Xbox 360 in November 2009, the pace of HD movie and TV consumption–downloads and streaming–has more than doubled.

–In the last year, Microsoft has seen a 157 percent increase in the time spent watching movies over Xbox LIVE.

–42 percent of Xbox LIVE users who spring for Gold status at $59 a year are watching an average of one hour of TV or movies every day–or more than 30 hours a month.

We’ll also see what they have to say about the Yahoo search partnership and its efforts to catch up with Google (and trip them up with antitrust headaches).

Liveblog

Okay. I’m onsite and nearly caffeinated. Yes, there are donuts, but Mobilized is going for the savory option.

10:03 am: Still waiting for things to get started here.

10:04 am: Microsoft search engineering head Satya Nadella comes out. “Okay, let’s get this thing underway.”

10:06 am: First up, some momentum stuff. Share is at 11.8 percent per comScore numbers released yesterday, up another 0.2 percent from October. Overall up 48 percent since launch. “We’re very, very happy with that growth.” Now over 90 million users, but the big deal, he says, is more heavy searchers. “We never had the fans of Bing and the heavy users,” Nadella says.

10:08 am: Nadella says Bing is still getting a larger percentage of 18- to 24-year-olds than its share of searchers as a whole.

10:09 am: “These are footholds that we have in the marketplace,” Nadella says.

10:11 am: Continued focus on specialized verticals (like travel, music, health, image search etc). Overall, such searches account for five percent of all queries, but specialized search makes up of 10 percent of Bing’s searches.

10:12 am: Partnerships: Yahoo is obviously the big one, but Nadella shows slide with Facebook, Twitter, Verizon., BlackBerry, Apple, Android, Foursquare and other logos.

There ave been 5.5 million downloads of the iPhone app.

Nadella says the toolbar deals are also important: They just give us a shot at acquiring the users. They have another one coming with Conduit. Also, they are now at least an option on iPhone and Firefox.

10:16 am: Nadella says the engineering team is focused on three areas, beyond the “arms race” of overall search quality–increasing the visual organization, task-centered nature and social elements of search.

“We’re neck and neck in terms of search quality and we are able to maintain it,” Nadella says.

10:18 am: Lots of talk about the ins and outs of search tech. Nadella says Microsoft has moved from a “neural net” approach to “boosted decision trees.” (No idea what that means.)

10:22 am: Effort to make search more social is important, but just beginning. “This is a journey we are at the very beginnings of,” Nadella says, but says social will change search in terms of how results are discovered, formulated and answered.

10:24 am: Nadella is talking about the importance of visual highlighting to call out various results as well as boosting interactivity, such as including forms within results so users can take action.

Still waiting for any new stuff, but we’re told it’s coming.

Nadella says the company has broken down a list of the tasks people are trying to do when they are trying to do more than just navigate to a particular site.

“We have a pretty granular understanding just looking at the query stream of what people are trying to get done.”

Microsoft has broken it down to some 150 categories, but here are some of the top ones: 4.6 percent of searches are music related, 1.8 percent clothing and shoes, 1.6 percent consumer electronics, 1.1 recipes, 1.3 percent home furnishings.

10:29 am: On to some new stuff.

New image search launching today, but first Microsoft is talking about visual search for things like finding movies and giving direct answers for some new types of queries.

10:31 am: Microsoft is talking about any sort of non-search result as “answers.”

In one case, an “answer” for the query “let’s make a deal” would be video episodes of the game show.

But Microsoft says that automatically putting it at the top is not necessarily best. What the company says it should do instead is put it below the first two results, such as the show’s homepage, which get more clicks than the video.

10:35 am: Also when a user searches flights from Denver to Las Vegas in June, Microsoft pre-populates the fields in a flight search with a guess at the dates, in this case the first weekend in June.

10:38 am: New image search represents first major changes in a year. Biggest shift is white space is gone with just a ton of tiles of images, with some categories at the top.

For example, search “Casablanca” and you get an option for the city in Morocco, another for the movie, a third for the style of wedding dress and another for the Casablanca Lily flower.

10:40 am: On to shopping. Quadrupled the number of products in its database.

10:43 am: Bing is adding a new focus on places as “destinations” with all the potential content from booking a flight or hotel to maps and attractions.

Which is nice, because I’m ready to go on a vacation right about now.

They use weather data to show times to go to and times to avoid a particular place.

10:45 am: Microsoft is beefing up event listings with partnership from FanSnap and other partners. You get ticket info, diagram of stadium, etc.

10:50 am: Back to social. Nadella says search can change by using one’s social graph to influence search results.

First example, you will start to see when your Facebook friends “Like” a page that is in search results.

For now, such results will only come up fairly infrequently, but Nadella says it will be a big deal when you do see pages that your friends have liked.

Search allows the data your friends share on Facebook to come to you when you actually want the information.

“In a way you are taking your friends with you,” says Microsoft’s Paul Yiu.

An example is when you are shopping for a product or going to visit a place–that’s a time when you really want to know what your friends think.

(Seems pretty cool, but wondering just how infrequently this will show up.)

10:57 am: Another example Yiu gives is a search one might do at 3 am for what will make your baby stop crying. There are lots of results, but one that your friend likes might be worth trying first.

11:00 am: Bing is also using one’s Facebook social circle to rank results in people search–i.e., if you have a friend in common, it will rank that “John Doe” higher than one you don’t know.

11:01 am: Nadella is back to talk about local and maps and how that integrates with mobile. Behind him Blaise Aguera y Arcas is pulling out several phones to do a demo. (And they look like iPhones.)

11:03 am: Aguera y Arcas takes the stage to show some changes coming to maps, first on the desktop. He notes the recent shift away from putting its most powerful map features on a Silverlight-powered site. Now it is moving that all to an HTML5-based site that needs no plug-ins.

11:07 am: Bing is bringing the “tasks” concept to searches within maps. A search for a restaurant now brings up not just a map, but more info on the eatery and also the ability to make reservations via OpenTable.

11:09 am: Aguera y Arcas switches to the iPhone. Shows how people can add their own panoramas to maps using a cellphone.

11:13 am: iPhone demo over 3G is going really slow. Aguera y Arcas asks how many of the reporters in the room are using 3G.

11:15 am: Although its going painfully slow, looks like Bing app starts to recognize a restaurant search and pops up options like types of cuisine and price. The goal is to save keystrokes.

Other options are things like get a map, make a reservation, menus, etc.

Still R-E-A-L-L-Y S-L-O-W.

“This bandwidth situation is really going to suck for what I have to demo next.”

He switches to a first-person StreetSide view, but all we see are dots.

“This is so sad,” Aguera y Arcas says, lamenting that we aren’t able to see all the cool stuff. There does seem to be some new StreetSide view stuff on the iPhone app that could be neat, assuming it runs faster on the street than inside this demo room.

11:23 am: We’ve reached a new low. “Close your eyes and imagine….” Aguera y Arcas says, and then describes what the app would do if we could see it.

11:23 am: And they have switched to Wi-Fi. “This is so exciting,” Aguera y Arcas says. Now he’s going back to StreetSide. “That’s so much nicer.”

As for directions, Bing now has bus directions with schedule info in addition to driving and walking directions. “It’s about time,” he says. “I’ve been waiting for this one myself.”

Another feature reminds you to do something when you reach a certain place, like call someone or check-in to FourSquare or Facebook.

11:29 am: Aguera says we are in Search 2.0–where you do more than just search and get results.

Image search is an example. Shows the coming ability to search for something by using a camera to start a search. Basically you can shoot a picture of a page and use any of the terms there to start searching (It uses character recognition in the background).

Questions and Answers

11:32 am: How big a deal is Google Instant?

“We are absolutely studying Google Instant,” Nadella says. Says they could match it. It’s a question of whether it makes task completion easier. “Is it a value or a distraction?” Doing studies and so far Microsoft’s research says it is mixed at best.

“It’s not a game changer. It’s a nice feature at best.”

He hedges a bit on whether it is something Microsoft needs to match.

11:39 am: Mobile features were demoed on iPhone. So when will they come to Windows Phone 7 and other platforms?

Nadella says they now have software for most major phone operating systems, including Android.

“The different devices have different schedules,” he says.

11:42 am: And we’re out of here….Thanks for tuning in.