However, unlike Zynga, which is known for such titles as CityVille and FrontierVille, Kabam is building social games for the hardcore gamer looking for a little more grit and challenge.

Today, it’s driving a stake into the ground by announcing it has raised $85 million in a fourth round of venture capital. What’s more, the round closely follows a $30 million third round of funding raised in January.

To date, Kabam has raised $125 million, which still doesn’t compare to the roughly $1 billion raised by Zynga, which is now also rumored to be filing for a public offering any day.

“We are targeting a different segment,” said Kevin Chou, Kabam’s CEO. “It’s the hardcore gamers, who are spending their time on social networks, and discovering the games that Kabam makes. It’s very different from the social games that are out there today. We are seeing incredible growth and excitement in our business.”

The company has grown from 25 to 400 employees in the past 16 months and expects to release at least four more game titles this year. The funding will be used for international growth and to make more acquisitions following the purchase of a company called WonderHill in October.

The funding was co-led by Google Ventures and Pinnacle Ventures. Also participating was Performance Equity and SK Telekom Ventures, as well as previous investors Canaan Partners, Redpoint Ventures and Intel Capital.

While Kabam’s games fit the typical profile of social games on Facebook because they are free to play and are supported by virtual goods, the plots and competitive nature are more reminiscent of games on the Xbox 360–and less like Zynga.

“You aren’t buying a decorative stadium or stable,” Chou said. “You are buying things that are giving you a competitive edge against the other players in the games.”

The round of funding is large compared to other social game companies in this space that have recently announced rounds. Also this week, CrowdStar, which is arguably the largest independent social game company after Zynga, raised $23 million, and Finland-based Supercell, which also says it is making hardcore social games, raised $12 million.

Some of Kabam’s more popular titles that are available today include Dragons of Atlantis and Kingdoms of Camelot.

Chou said ultimately they might be going after a smaller audience than Zynga, which attracts 250 million players a month and a mass market, but the players are more dedicated.

He said 83 percent of their gamers are also playing console or PC games and that 55 percent are now spending less time on other platforms because of their games. In addition, social is a critical component. Up to 70 percent of their players say that the most important feature of their games is being able to form alliances with players, who are either friends on Facebook or those they can connect to anonymously.

The addition of PayPal to Xbox brings into question whether Sony will be next after its very public debacle, which included shutting down its PlayStation Network after hackers obtained personal information associated with accounts, including names, addresses, email addresses, birthdates, usernames and passwords.

Additionally, it cautioned consumers that their credit card information may have been obtained.

Integrating PayPal may not eliminate all of those concerns, but it could potentially add another barrier between a customer’s sensitive information and the outside world.

In the announcement, neither Microsoft or PayPal hinted that the integration had anything to do with security or Sony’s woes. A PlayStation spokesperson did not respond to an email, asking whether it was considering alternative payment methods in the future.

However, beyond Xbox or PlayStation, it is becoming increasingly common for a variety of payment methods to be offered by merchants. In particular, game companies have been aggressive. For instance, on Facebook players can commonly charge virtual goods to their mobile phone bill or PayPal, among other options.

Other new payment mechanisms are also in the works. Visa revealed part of its digital wallet strategy last week, saying that it would allow consumers make payments with their credit card through an associated username and password instead of typing in their entire credit card number.

Not only could it be more secure, consumers often find it more convenient. In fact, convenience seems to be one of the main factors of the relationship between Xbox and PayPal.

Microsoft said Xbox 360 owners in more than 20 countries around the world will now be able to use their PayPal accounts to buy Microsoft Points, Xbox LIVE Gold subscriptions and Games on Demand.

The integration began rolling out early yesterday morning and will be available worldwide in the next few weeks.

eBay-owned PayPal said in a blog post nearly 75 percent of people who identify themselves as gamers also have PayPal accounts, according to an Ispos study from March of this year.

According to NPD Group, Nintendo sold more than 620,000 hardware units in the U.S. in April. This includes more than 257,000 units in the Nintendo DS family, and only 194,000 Nintendo 3DS units. Nintendo also sold more than 172,000 Wii consoles.

Nintendo attributed the gap between the two handheld game units to the staying power of the original DS family–and avoided any implications that the 3DS was not selling well.

“With a rich library of games, Nintendo DS has something for everyone. The system’s staying power is exemplified by the recent launch of the Pokémon Black Version and Pokémon White Version games,” Nintendo said. Those two games sold an impressive 2.8 million units or more combined during their first 60 days of availability.

After the 3DS went on sale March 27, Nintendo was eager to report that the glasses-free 3-D device broke sales records. However, the original DS still appears to be benefiting from having a deeper catalog of games available for sale. Additionally, sales may have been hurt by concerns of younger players viewing 3-D images over long periods of time, or complaints that 3-D images made people dizzy, or gave them headaches.

Overall, NPD Group said that the videogame industry saw very strong sales for hardware, software and accessories in April, compared to the year-ago period.

NPD’s Anita Frazier wrote that all three categories experienced double-digit dollar growth compared to April 2010, reversing a negative downward trend.

“Easter purchasing occurred in April this year as opposed to March last year,” Frazier wrote. “The Easter timing shift could explain about $60 million of the growth, but even accounting for that shift, sales of new physical product realized a notable increase versus last year.”

Hardware sales were strong across the board with the PS3, PSP and Xbox 360 platforms all seeing an increase in unit sales versus April last year. The Xbox 360 platform was the best-selling device of the month in terms of unit sales, followed by the Nintendo DS.

Software performed even better in April. It was the first month that new physical retail sales of content showed growth in both units and dollars since November of last year.

In its first-quarter results released today, the company, which is known for its Call of Duty and World of Warcraft games, said its revenues from digital channels increased 30 percent year over year in the first quarter.

What’s more, on a non-GAAP basis, digital channels accounted for more than 50 percent of net revenues, or roughly $378 million.

However, what’s becoming clear is that the definition of digital is a moving target for all parties involved, a trend that will likely continue as companies experiment with new business models and ways to deliver games to consumers.

Activision’s big source of digital during the quarter came from the $15 content pack for Call of Duty: Black Ops, which provides new areas for players to explore that were not included in the the original game sold at retail. It’s available on Xbox today and is expected to launch on Sony’s PlayStation Network and the PC in the second quarter.

That’s much different from Electronic Arts, which said last week that its digital revenues for its fiscal year ended March 31 totaled $833 million, exceeding its forecast of $750 million.

When EA talks about digital, it refers to mobile games and social games on platforms, such as Facebook. For the most part, it’s not referring to downloadable content available on consoles (although it has that, too).

The differing points of view also come down to business models.

Mobile games and social games are often free and either monetized through advertising or through virtual goods that are purchased in the game. Online games are often paid for via subscriptions and console games frequently require a $60 upfront payment with the option of paying for more downloaded content later.

Thomas Tippl, Activision’s COO and CFO, said while digital revenues grew at 30 percent, it was also able to maintain margins of up to 50 percent since most of its digital content was leveraging the company’s large online communities and popular franchises.

Call of Duty and it’s $15 content pack is one example:

During the earnings call, Activision said that Call of Duty: Black Ops has now officially become the best-selling title of all time in dollars across the Xbox 360, PlayStation 3 and the PC in the U.S. and Europe. Additionally, the popularity of that title was able to drive massive sales of the digital add-on pack. While only released a few days ago, it has the potential to do better than most console games at retail.

“The Call of Duty content pack shattered records with 1.4 million downloads in the first 24 hours,” Tippl said. “We no longer think about launch events, but long-term on-going relationships with players. The response from fans underscores this approach.”

The company also discussed other digital initiatives, of which some could arguably be considered social, although they are not on Facebook.

In the works is a next-generation massively mutli-player online game; a micro-transaction game for China; a digital platform surrounding the Call of Duty franchise; a new property from Bungie; and Skylander’s Spyro’s Adventure, a new children’s game coming out that will tie the Internet together with real-life $10 toys.

But not ever in the company’s earnings release, or during the call, did Activision place much emphasis on mobile games or social games.

Actually, Facebook was mentioned once. Activision said that since Call of Duty: Black Ops First Strike launched on Feb. 1, players have spent an average of 58 minutes a day playing online, which is more than the 55 minutes an average Facebook user spends a day on the social network.

So, maybe it can build its own communities?

Still, one could argue that mobile and social are key components to the digital gaming experience.

In addition to Electronic Arts’ many investments in the space, including the purchase of Playfish, a social games publisher, Disney also acquired Playdom. Both plan to use the publishers to bring some of their more recognizable content from other platforms to Facebook. Social games are also becoming a massive business for privately held companies, like Zynga.

An analyst during Activision’s earnings call this afternoon asked about how the company viewed the various emerging platforms across the videogames industry.

In response, Activision’s CEO Robert Kotick said: “You hit on the most interesting of the fundamentals that are redefining interactive entertainment. More people are playing games than ever before.

“Facebook has done a good job of introducing interactive entertainment to people who have never engaged in gaming of that kind…We’ve always taken the approach of platform agnosticism. We deliver services across devices with a display and a microprocessor. We have to prioritize the resources based on the opportunity. As we look out three to five years, we see there being a lot more displays with microprocessors that will be capable of playing games. We are so excited about the prospects of the future. If it has a microprocessor and a display, our content can be there.”

Before renewing the product for another season, though, Google is making a number of changes to the script. In addition to trying to make it more approachable, the company is hoping to change the way Google TV is thought of in the market. Initially, many people saw the product as a potential way to get around the big TV providers by using Web-based services. However, Hulu and other mainstream Web video services quickly blocked access via Google TV.

This time around, Google TV will be pitched more clearly as something that can add to a traditional TV experience, both through a wave of new applications and by delivering video that even the broadest satellite or cable package doesn’t have.

Google TV debuted last year as an option on certain Sony TVs and Blu-Ray players as well as via a set-top box from Logitech. However, it was met with disappointing sales and lackluster reviews. Logitech, for example, said it sold just $5 million worth of Google TV products last quarter, far less than it was expecting.

But Google sees the marriage of Internet and the television as in its early days. And it imagines the first version of Google TV not unlike the G1, the first Android phone. While the phone offered hints at what Google’s phone would eventually become, it was itself not much to look at and more than a little clunky. Over time, of course, Android became a major force in the smartphone business.

The first glimmers of the new TV will come next week at the Google I/O conference, where Google will present a session for developers on creating TV-friendly Android apps. However, the next version of Google TV and the TV-centric version of the Android Market won’t be announced until some time in the coming months, according to sources familiar with the matter.

The goal, sources said, is to have a new version of Google TV ready at least in time for this year’s holiday season. The company is bringing on additional hardware partners, including Samsung and Vizio. Business Insider reported that new hardware will be based on faster chips, although sources told Mobilized that existing Google TV models should also be upgradeable to the new software.

Google is not alone in chasing this Internet-centered view of TV, however. Apple has made the latest version of Apple TV based on Apple’s iOS. Although today’s version doesn’t support running third-party apps, the company has certainly laid the groundwork architecturally to head in that direction. Microsoft, meanwhile, is attacking the living room both by adding entertainment features to its Xbox 360 and by making its Mediaroom IPTV platform more app friendly.

Nor is this the first go-around at this. The dream of marrying TV and the Internet has been around since before the dot-com bubble with companies like WebTV and Wink all chasing the goal of bringing interactivity to the television.

Since debuting late last year, the well-selling Xbox accessory has been tweaked to create the world’s best shadow puppet; to operate a computer, like Tom Cruise in Minority Report; and now to help redefine window shopping.

Nordstrom, the Seattle-based department store, has installed it in the window of its flagship store in Seattle to enable people to draw illustrations using light on the white backdrop, reports MSNBC.com.

Here’s what Nordstrom says about it on its blog: “With the help of Kinect’s infrared technology and their technical genius, our teams created a seamlessly interactive display that anyone can ‘paint’ on using just the motion of their hands in front of the glass.”

Nordstrom had previously experimented with the technology at its Spring 2011 Designer Catalog event.

At least once before, Kinect was used in a window display. In Moscow, passers-by could browse products and search for information in catalogs using only their motion to interact.

Here’s a look at the Nordstrom window display:

The Nintendo 3DS, which allows players to see 3-D images without special glasses, will go on sale in the U.S. on Sunday for $250.

Amazon is already claiming that the Nintendo 3DS was the biggest console launch ever on Amazon.com. It sold more units on January 19–the day it was announced–than any console had before, including the slimmed-down versions of the Xbox 360 last year and the PS3 the year before.

GameStop, which will open 800 of its stores worldwide at midnight on sales day, said pre-sales were strong. “Demand has been so strong that, literally, we are working every day with Nintendo to ensure that we have sufficient product. And they have been very good partners on this, and we fully expect to have sufficient product at launch; the demand is very strong,” said GameStop’s President Tony Bartel during the company’s earnings call yesterday, according to a SeekingAlpha transcript.

Nintendo expects to ship about four million 3DS units worldwide by the end of March, and said 1.5 million of those will likely be in Japan. The device went on sale in Europe today.

The original DS has been insanely popular over the years.

Nintendo has sold more than 47 million portable video game systems in the U.S. since the original model launched in November 2004. By its own measures, it says, that makes Nintendo DS the nation’s best-selling video game system of all time.

Still, it’s unclear whether the 3-D mechanism will draw a new audience, or whether it’s enough to encourage current users to upgrade.

In other words, can the 3DS repeat history? There’s a handful of reasons why this could be game over.

Nintendo warned that children under the age of six should not view the 3-D images due to health concerns, although optometrists have since largely dismissed the worries.

Another concern is price.

The device costs $250, which is $100 more than the original. The games are also $10 more expensive at $39 each.

Finally, there’s the competition.

The Nintendo products are attractive because they don’t require a monthly fee. Increasingly, however, smartphones are offering an equal gaming experience. Apple’s iPad and iPod touch also don’t have monthly fees, and those devices have thousands of games for much less than $39. If 3-D is important, two smartphones were unveiled this week at CTIA with 3-D capabilities–without glasses.

Katie Boehret of The Wall Street Journal and All Things Digital gave the device a mixed review, calling out its clunkiness and remarking that the images sometimes made her dizzy.

However, the device offers a lot more features than the old model. In May, it’s expected to get a software update that will enable downloadable games and add a Web browser.

On launch day, users will have a choice of dozens of game titles, including several created by Nintendo, such as Pilotwings Resort, Nintendogs + Cats: Golden Retriever & New Friends, and Steel Diver.

Typically, the launch of new hardware spurs a spike in game sales.

It’s Ubisoft’s intention to launch more 3DS titles than any other third-party video game publisher this week to ride that wave. It has four titles ready at launch, including Asphalt 3D, Combat of Giants, Dinosaurs 3D and Tom Clancy’s Ghost Recon. In all, it has more than 15 games in development for the platform.

All of Ubisoft’s games at launch will be in 3-D; however, a toggle on the device allows you to convert the images to 2-D. The games also take advantage of other new features, such as the accelerometer, which in Asphalt 3D allows you to steer the car with motion control.

Ubisoft SVP of Sales and Marketing Tony Key said the goal is to be No. 1 on the platform. “The thing is going to be hot. Our initial prediction is that it will be hard to get your hands on one. It’s going to sell out. All kinds of people will be trying to buy one, ranging from the core gaming men to tweens to every gamer segment out there,” he said. “As fast as Nintendo can make them is as fast as they will be able to sell them.”

Both Amazon and GameStop are providing incentives for current DS owners to upgrade. They are offering $50 to $100 in trade-in credit on old gaming units, depending on the device.

Nintendo, which is based in Kyoto, Japan, has previously said that there’s been no apparent damage to its headquarters after the recent earthquake, and that business operations, including future product shipments, haven’t been affected.

Boxee, which makes software that makes it easier to get video from the Web to your TV, is a buzzy company in a buzzy industry. But I wrote about Boxee’s efforts to raise $10 million to $15 million back in November. What took so long?

My hunch is that in between then and now, the startup had to figure out if it really wanted to raise more money, or sell out to a big fish. For a long time, I figured the company was eventually headed for option B, and that a cable giant like Comcast or a box-maker like Cisco would be the buyer.

And that could still happen! But now the stakes have gotten a lot higher: Boxee has now raised $28.5 million, so in order to please its investors it’s going to need a significant payout.

Which means it really will have to build a real revenue stream, which it doesn’t have yet, and won’t have until it has a significant audience. As I wrote a few months ago:

Boxee’s real plan is both clear and a bit undefined: It wants to get its software on as many devices as possible–not just the Boxee Box but everything from Sony’s TVs to Microsoft’s Xbox 360s to Samsung’s Blu-ray players. And then it wants to build some kind of business based on advertising, consumer payments or both.

So Boxee isn’t trying to make money by licensing its software to hardware companies, any more than Netflix or Pandora is when they get their apps installed on different gadgets. It’s giving D-Link, the company that’s actually making the Boxee Box, its software for free. And it will do the same for other hardware companies.

Here’s a quick interview I conducted last fall with sleep-deprived CEO Avner Ronen, going over the same territory, back in November. Note that Ronen’s plans to bring Hulu Plus to the Boxee Box have yet to pan out. What’s up with that? “As you know these things take time,” he said via email yesterday. “But we are on it.”

]]> http://allthingsd.com/20110301/boxees-backers-bet-big-on-web-video-with-a-16-million-round/feed/ 0 http://allthingsd.com/20110222/microsoft-has-big-plans-for-kinects-future/ http://allthingsd.com/20110222/microsoft-has-big-plans-for-kinects-future/#comments Tue, 22 Feb 2011 14:00:35 +0000 Arik Hesseldahl http://newenterprise.allthingsd.com/?p=3497 Microsoft apparently has some pretty big plans for the Kinect. Best known as a gaming accessory for the XBox 360, its future potential for other things was a big highlight at an event for journalists which I attended at the Microsoft campus in Redmond Monday.

In one demo, we got to see more details about the Avatar Kinect feature that Microsoft CEO Steve Ballmer demonstrated at the Consumer Electronics Show in Las Vegas last month. In the first video below, a member of Microsoft’s development team showed how she could host a virtual “talk show” with two other live participants.

In the second, Craig Mundie, Microsoft’s Chief Research and Strategy Officer, shows a video sampling of work done by enthusiasts and hobbyists using the Kinect for things like simulating a light saber from Star Wars to driving a toy helicopter. The videos show projects that people did on their own without any official help or support from Microsoft.

Sensing opportunity, Microsoft said today that it will release a software developers kit for the Kinect to academics, hobbyists and enthusiasts, but not yet for commercial developers.

Meanwhile, Microsoft’s own researchers have been hard at work trying to figure out other things that the Kinect might be useful for. One of them may one day have something to do with creating 3D digital renderings of the environments we live in. In another demonstration we weren’t allowed to photograph or film, a Kinect took a series of images of a bunch of reporters sitting on a couch around a coffee table with a lot of stuff on it: toys, a telephone, a plant, a vase. The resulting image looked a little like something out of the ancient Roman city of Pompeii. We could see detailed 3D rendersings of everything on the table, and of ourselves that increased in detail as the minutes passed. I was wearing a scarf and after a minute or two I could see its wrinkles, yet the renderings looked as though everything were covered with a layer of dust or snow.

During this demo, one interesting effect occurred when someone got up and walked away from the couch. On the screen, that person seemed to melt away a little at a time. Then he returned to the same place, and he slowly re-materialized into the scene as if he had just been beamed back into place by the Starship Enterprise.

This is all just at the research and experimental phase right now. But the work could one day lead to a future version of the Kinect where the avatar is a more photo-realistic version of yourself, and not a cartoon-like representation, as seen in the talk show video below. Plus? Our more realistic avatars will meet in more realistic looking environments that closely resemble the real thing. Imagine what you could do with that in the fields of communication, entertainment and others. You could use it make a detailed model of a room in your home to try and figure out how things would look redecorated.

This is all part of a theme of research at Microsoft into natural user interfaces that will one day replace the graphical users interfaces we’re so used to on the Mac and Windows today.

Avatar Kinect Demo from Arik Hesseldahl on Vimeo.

Kinect Development projects from Arik Hesseldahl on Vimeo.

]]> http://allthingsd.com/20110222/microsoft-has-big-plans-for-kinects-future/feed/ 1 http://allthingsd.com/20110113/video-game-sales-lagged-in-2010-despite-xboxs-high-scores/ http://allthingsd.com/20110113/video-game-sales-lagged-in-2010-despite-xboxs-high-scores/#comments Fri, 14 Jan 2011 00:44:58 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=1639 Microsoft’s Xbox dominated the charts at the end of 2010, despite year-over-year revenue declines for both videogame hardware and software.

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.

]]> http://allthingsd.com/20110113/video-game-sales-lagged-in-2010-despite-xboxs-high-scores/feed/ 0 http://allthingsd.com/20110113/xbox-360-sold-out-last-month/ http://allthingsd.com/20110113/xbox-360-sold-out-last-month/#comments Thu, 13 Jan 2011 21:52:07 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=55755 Here’s an interesting data point regarding Microsoft’s Xbox. According to Larry Hryb, director of programming for Xbox Live, the Xbox 360 was sold out by the end of December, and the company is evidently struggling to keep up with demand. “Jan/Feb supply is tight as well,” Hryb said in a tweet, adding that he expects “amazing” year-over-year growth in 2011. We’ll see where things stand when NPD releases its December sales data today.

]]> http://allthingsd.com/20110113/xbox-360-sold-out-last-month/feed/ 1 http://allthingsd.com/20110112/start-up-behind-kinect-gesture-recognition-gets-funding/ http://allthingsd.com/20110112/start-up-behind-kinect-gesture-recognition-gets-funding/#comments Wed, 12 Jan 2011 17:05:10 +0000 Nick Wingfield http://voices.allthingsd.com/?p=35136 An Israeli startup behind key parts of Microsoft’s Kinect game device is getting a fresh round of funding to help expand the use of its gesture recognition technology in electronics.

Silver Lake, a private equity firm with investments in Skype and other technology companies, has invested an undisclosed amount in PrimeSense Inc., a company behind some of the key ingredients in Kinect, a device that lets Xbox 360 players operate games with body movements. One of the hit products of the holiday season, Microsoft says it shipped more than 8 million Kinects in the product’s first 60 days on the market.

The Kinect’s success has put a spotlight on the category of gesture recognition, an area PrimeSense is seeking to develop with a variety of new non-game applications. At the Consumer Electronics Show last week, the PC maker Asustek showed off a product called the Wave Xtion that uses PrimeSense to navigate Web content and other PC applications on a television set. PrimeSense also showed its technology in action with televisions from Haier and others.

Read the rest of this post on the original site

]]> http://allthingsd.com/20110112/start-up-behind-kinect-gesture-recognition-gets-funding/feed/ 0 http://allthingsd.com/20110105/microsoft-sells-8-million-kinects-well-not-really-but-close-enough/ http://allthingsd.com/20110105/microsoft-sells-8-million-kinects-well-not-really-but-close-enough/#comments Thu, 06 Jan 2011 06:37:10 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=1291 We were hoping Steve Ballmer would spill the beans on how many Kinects the company has sold to date, and he didn’t disappoint.

During the Microsoft chief’s traditional appearance on the eve of CES, there was really no better consumer electronic to talk about.

The Xbox add-on has been a blockbuster hit for the company.

It sold 2.5 million in the first 25 days at market, and has garnered extended interest in the platform beyond hard-core gaming enthusiasts. It works similarly to the Nintendo Wii by allowing gamers to play beach volleyball or ping-pong or take dance lessons using motion, but this version doesn’t require a controller at all.

Tonight, Ballmer provided an update on just how well it’s selling. In its first 60 days on the market, he said, eight million Kinect sensors were sold, outpacing the five million units the company had forecasted in 2010.

But those figures require a little more explanation than was given:

The 2.5 million sold in 25 days counted the number of devices consumers purchased, whereas the eight million figure reported today represents the number of devices shipped to retailers.

The discrepancy between those two is likely fairly slim. Up until recently, inventories have been really low, and retailers have been sold out in some circumstances. For instance, the Xbox 360 with 250GB, bundled with the Kinect, remains sold out at Walmart.com, but is available at Amazon.com.

A Microsoft spokesperson had a fairly simple explanation for the different reporting methods:

To develop the sell-through numbers when it announced 2.5 million in sales, Microsoft conducted manual checks among retailers to gauge interest during the holidays. Those are very labor intensive, “and are not something we do throughout the year,” the spokesman explained.

“The change back to sell-in reporting aligns our Kinect disclosures to our ongoing worldwide console and financial disclosures, and is what you should expect from us going forward.”

Either way, the spokesperson assures us that Kinect sales far surpassed the five-million unit forecast.

It doesn’t hurt that the Xbox 360 has been the best-selling console in North America for six months running. Another figure revealed tonight was that console sales for the Xbox 360 hit 50 million over the holiday season.

That’s a lot. Nintendo said this week that the Wii system to date has sold more than 34 million consoles in the U.S., and that it sold more than seven million in 2010.

Other milestones:

–8 million: Number of Kinects sold in first 60 days

–50 million: Xbox 360s sold to date

–30 million: Number of Xbox LIVE members

]]> http://allthingsd.com/20110105/microsoft-sells-8-million-kinects-well-not-really-but-close-enough/feed/ 1 http://allthingsd.com/20101220/microsoft-eyes-wider-net-as-xbox-turns-to-entertainment/ http://allthingsd.com/20101220/microsoft-eyes-wider-net-as-xbox-turns-to-entertainment/#comments Mon, 20 Dec 2010 13:30:22 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=838 The Kinect has been an early hit for Microsoft, but an even bigger moment to celebrate will be if the new gaming accessory can help move the Xbox beyond the hard-core gamer demographic to appeal to a mass audience for general living-room entertainment.

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.

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