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  • US e-commerce to reach $156 bln in 2009

    US e-commerce to reach $156 bln in 2009

    US online retail sales are expected to rise 11% to $156 bln in 2009, excluding revenue from travel. However, that will mark a slowdown in the overall growth rate, which was 13% in 2008, when online retail sales totaled $141 bln, Forrester Research says.

    More facts like this one

    Previous fact: Tech layoffs up 74.2% in 2008
    Next fact: Top 5 Reasons to Shop at a Particular Web Site

    via itfacts.biz
  • Gamasutra Interview: Paradox Interactive's Wester On Staying Lean And Mean In The PC Biz

    Gamasutra Interview: Paradox Interactive's Wester On Staying Lean And Mean In The PC Biz


    Interview: Paradox Interactive's Wester On Staying Lean And Mean In The PC Biz Paradox Interactive's Fredrik Wester says the Stockholm-based developer-publisher is surviving gamely amid the global economic crisis -- working primarily in the PC game arena to boot -- thanks to a very targeted operations method Wester suggests might be a wise way forward for many such companies.

    The company started in 1999 doing development only, but since entering global publishing in 2004 and adding a New York office, has published 20 games, mostly PC strategy titles including Europa Universalis, Galactic Civilization, Rush for Berlin and fan-favorite Hearts of Iron.

    "The type of games we've been doing are map-based, very in-depth strategy titles, like our World War II title Hearts of Iron," Wester explains. "The second installment sold 60,000 units in North America; we're actually doing number 3 right now, this year."

    Aside from its publishing activities, the company has an in-house development team of only nine staffers, with a lot of work outsourced. "We try to keep operations here very lean," Wester notes.

    Paradox could be said to operate in a highly niche market, on a platform that many developers and publishers seem unsure how to negotiate alongside the current console generation. But as the global crisis makes profitability more challenging for the larger games industry than ever, Wester states: "2009 is going to be our best year ever."

    Digital Distribution Is Not Optional

    Cost efficiency has always been a large part of the company's business model, says Wester. "We haven't really spent a lot of money on big teams trying to reach all markets at the same time."

    But readiness for digital distribution is key to the survival of developers and publishers, Wester says. "I think what's hitting back now is the digital distribution revolution taking place -- especially in the PC business. If you can't take advantage of that, you're going to suffer a lot."

    In fact, the rise of digital distribution has helped strengthen the company, says Wester. He's also the founder (and still 20 percent owner) of digital download portal GamersGate, which just yesterday announced it would switch its catalog to a client-free model.

    So not only does Paradox handle its own worldwide publishing, but it relies heavily on download services including, but also in addition to GamersGate, like Steam, Direct2Drive, and Impulse. "30 to 40 percent of our revenue [this year] is going to come from digital distribution," Wester says, "and that's obviously a significant part of the revenue stream."

    "I think that's one of the reasons we have been growing so much lately," he says. "We are really focused on getting the business online."

    In fact, Wester says a strong migration toward digital distribution and alternative business models like microtransactions has become an essential survival move for PC publishers, and "it may already be too late" for those now hurrying to catch up. "To release a game in box retail costs a lot more than releasing it online," he says. "Obviously, you should do both, because in-box distribution is still the majority of all sales."

    A Rewarding DLC Model

    One strategy Paradox has employed is to charge $10 for large-scale updates to its titles, rather than prescribing a steady drip of smaller DLC. Although such expansion-level releases are usually purchased by the most core players, "it's proven to be very good for us on the cash flow side," Wester says. "When you are as small as we are, you are vulnerable to dips in cash flow."

    This model only works on top of a solid basic client-installed game that is strong enough for players to enjoy as a standalone without subscription fees, Wester notes. "But then, for people who enjoy it a half year or a year more... you can add additional content for it that can radically change the gameplay and make it into a new experience. Like reinvent the game, so to speak... I think a lot of gamers appreciate that."

    In fact, the expansions were originally simply intended to be an "investment" in user retention and less a profitable enterprise, but they've pulled their weight as far as helping break even on their costs and keeping games "alive" for longer.

    Standout Indies

    On the publishing side, the company already has six projects slated for the coming year. "We pick up a lot of independent developers these days," says Wester. "The most important thing is they have an edge at what they do."

    In other words, to Paradox, focusing on a single area better than any other is of paramount importance, moreso than more popular ideas than the widest-possible audience or the least genre-specific. Largely, Wester suggests that it's better to publish many products that each address a single niche very well -- even if they each sell on average in the 40 to 60,000-unit range -- than to slate a few big budget games aimed at the most crowded market segments.

    For example, Mount and Blade, developed by small Turkish indie TaleWorlds, is a medieval combat action RPG -- not exactly a competitive category. But Wester found it was the best medieval combat action RPG he'd seen, and so signed the title.

    Dedication on the part of a studio plays a role, too, says Wester, for independent developers seeking a good match in a small publisher. "We're looking for people very, very dedicated in what they do," he says. "That always shows in the gameplay. You can see from a game if they put all their heart and soul into it."

    And as many small indies do, TaleWorlds had originally started off by continually offering in-progress beta builds to a small fanbase via its website. Wester noted the players' loyalty, and the fact that they'd even volunteer donations to encourage the game's completion. It took two years to fully polish and rework Mount and Blade for digital and retail publishing, but that initial something that Wester first saw in the title made it, to him, worth the wait.

    PC's Passionate Audience

    So as Paradox takes an approach somewhat different to the norm -- selecting independent studios and niche titles, and relying heavily on digital distribution to reach a global audience -- how does Wester feel about the state of the PC market right now?

    "The PC market is much more... hardcore," he says, taking a minute to mull on the appropriate term. "PC players are more decisive in what they want to play; they're more focused. You can't release a crap game for the PC anymore, and people will just rush out and buy it."

    "For the Xbox 360, for example, it's much more mainstream, and you can release titles... of lower quality, to be honest, and still sell a lot. That's not saying all PC games are really great -- because they're not -- but the games that are not great don't get any sales at all, so there is a larger pressure to create great games for the PC. But if the game is good, you can sell a lot of units."

    Especially combined with digital distribution, Wester feels there's still a very good market for PC games. "And it's also opening up a market for smaller games," he notes, "Like what Microsoft is trying to do with Xbox Live; that's growing a lot on the PC platform as well."

    In other words, a shorter or simple title that would hit a retail shelf at a $19.99 price hardly even outweighs the costs of getting it to retail, ultimately -- "the margin eats up the revenue, mostly," says Wester. So as an established connected platform, he believes the PC holds great potential for smaller-scale, easy-to-learn, lower-priced games.

    Announcing Mezmer Games

    With that in mind, the company's starting a new sub-brand within Paradox called Mezmer Games, to house high quality, smaller games that aren't at all benefited by retail distribution, focused on supporting independent developers with the marketing to reach a larger audience via digital channels. One of the first titles under the new label, for example, will be a quirky strategy-lite called Stalin Vs. Martians.

    "It's kind of an arcade RTS game," Wester explains. "Lightweight, but really fun -- and full of Russian techno music."

    Though Mezmer Games as a site is still in alpha, the ultimate aim is to gather independent developers and allow them to conduct their own individual forums there for fans.

    It's beneficial to indie developers to start small, Wester says. "I don't think you should aim too high, initially. To create a game like Oblivion, you need the development and marketing budget that they have. It took Bethesda 20 years to get to where they were today... and they didn't have their first huge super-hit until [just a few years ago.] Not everyone can be Bethesda or Blizzard."

    The Big-Budget Myth

    Wester says an unidentified studio once told Paradox that it required a $5 million budget to build its vision. "It was their first game!" He says. "Maybe you should create a small game first, just to prove -- and to prove to yourselves -- you can create a good game." $5 million, Wester marvels, is generally considered the "lowest of the low" budgets for high-quality titles, and it surprises him how many people believe that's the minimum needed.

    "My belief is you should work step-by-step," he says. "If you aim to create bigger and bigger games, you shouldn't go for very niche games all the time -- but if you have to start somewhere, I think that would be a good start."

    And he also hopes developers won't exclude the PC as a potential development avenue, even in a climate of migration toward consoles and handhelds.

    "We have a company here in the neighborhood who only creates games for Xbox Live Arcade and PlayStation Network," Wester says. "All of a sudden, Microsoft just switches the royalty model on them -- they get 30 percent instead of 70 percent, and it was just, 'oh! FYI!'And everyone got really pissed off, but what could they do?"

    "I think PC has a great future," he concludes."With the PC, you control everything yourself. More people should develop for the PC -- especially small companies that are totally dependent on the big consoles."

    via gamasutra

  • Streaming Energizes Growth at Netflix

    Streaming Energizes Growth at Netflix

    Despite its fourth-quarter slow-growth outlook, Netflix is reporting robust growth in its subscriber base, thanks to the impact of streaming technologies. Netflix has beefed up its streaming-content investment, as well as expanding its hardware-based streaming-content partnerships. Netflix is also seeing fluid adoption of Blu-ray technology.

    Confounding its own outlook for slowing growth in the fourth quarter, Netflix said its subscriber base grew by a robust 26 percent year over year to about 9,390,000 subscribers at the close of 2008.

    "In hindsight, we underestimated the positive impact of the introduction of the multifunction consumer electronics devices from LG Electronics, Samsung, Microsoft Relevant Products/Services and TiVo that promote Netflix streaming," said Reed Hastings, Netflix cofounder and CEO. "The precise impact of the recession is unclear, but it is very clear that streaming is energizing our growth."

    Increased Investments

    Netflix substantially increased its investment in streaming content over the Internet during the fourth quarter and plans to do the same this year. "Most of our streaming content spending is directly with TV networks and studios," Hastings told investors. "We now have over 12,000 movie and TV choices, up from 2,000 two years ago, and we are already one of the studios' largest revenue sources."

    Netflix is also beefing up its content-streaming capabilities on the hardware Relevant Products/Services side. Earlier this month, the company expanded its partnership agreement with LG Electronics and inked a new agreement with HDTV vendor Vizio.

    LG Electronics has agreed to embed Netflix streaming software directly into its new line of broadband-enabled HDTVs, eliminating the need for an external device. Additionally, Vizio's new deal with Netflix means consumers will be able to stream high-definition video content from Netflix to TV sets based on Vizio's new Connected HDTV platform, which will begin shipping nationwide later this year.

    Hastings told investors he fully supports Roku's recent decision to add functionality to its Netflix-enabled set-top box that would enable consumers to stream pay-per-view content from Amazon.com. Hastings said any increased competition would mostly be indirect because it would come in the form of "big new releases," which Netflix does not offer as part of its streaming subscription service. The upside is that Amazon will also be promoting streaming devices, "which provides us with more households to stream our service to," he explained.

    Yankee Group analyst Josh Martin agrees. Adding utility to the box "increases the value proposition for consumers, and I don't think it hurts Netflix," Martin said.

    Mail Delivery

    About 700,000 of the company's subscribers were renting Blu-ray disks from Netflix at the end of the fourth quarter. "Adoption is growing nicely," Hastings said. "We expect our DVD and Blu-ray shipments to continue to grow in 2009 as they did in 2008."

    Hastings also told investors that Netflix plans to expand its mail-delivery program this year. "This quarter, we will begin testing weekend shipping in parts of the country, which will provide even faster service."

    However, U.S. Postmaster General John E. Potter told Congress Wednesday that the recession has caused the postal service to lose so much money that he sees the need for cutting mail deliveries from six days a week to five. "I do not make this request lightly, but I am forced to consider every option, given the severity of our challenge on Saturdays," Potter told members of a Senate subcommittee, according to The Washington Post.

    Martin said he does not think Netflix would be hurt "in any significant way" by a mail-delivery cutback, should one materialize.

    "This is one of the areas in which digital distribution will really help," Martin explained. "And any cut is so far away from passage that I don't think consumers should be too concerned." via sci-tech today
  • 'Premium' games section coming to App Store?

    'Premium' games section coming to App Store?

    Apple is laying the groundwork for a high-end gaming section at the App Store, sources claim. In the current organization of the store, bigger-budget games such as Sega's Super Monkey Ball are sorted no differently than the many low-cost clones of puzzle titles. Under the suggested arrangement, a special section at the store would contain only games costing $19.99 each.

    Controversially however, the section would also allegedly be limited to corporate publishers, such as Electronic Arts and Gameloft. This would exclude the burgeoning independent scene, which has taken advantage of Apple's distribution mechanisms to gain exposure. For the major companies, though, an exclusive section would guarantee high publicity and stable sales, potentially making the iPhone as viable a platform as Nintendo's DS handheld or Sony's PSP. Most console games must be officially licensed before distribution.

    It is not certain when Apple would introduce the App Store division, but one probability is the Worldwide Developers' Conference in June, Apple's next scheduled event. One or both of the two could coincide with the revelation of a new iPhone, potentially with superior gaming performance. The majority of rumors have pointed to a lower-cost "Nano" phone though, one which would likely see no serious processor upgrades. via ipodnn

  • Rev Up Revenue in a Recession

    Rev Up Revenue in a Recession

    Warranties, upgrades, maintenance services hot sellers in cold economy


    Just as many consumers are keeping their current homes or cars, many businesses are holding onto existing technologies in an effort to outlast the poor economy.

    As a result, savvy solution providers have the opportunity to sell services -- such as extended warranties, data-management services and maintenance contracts -- that keep clients' older systems up-and-running. By doing so, these VARs also are able to further cement their customer relationships and be the go-to solution provider partner once organizations are able to shake loose some additional IT dollars.

    "We are seeing the services part of our business pick up," said Don Richie, CEO of Sequel Data Systems, in Everything Channel's annual State of the Market report. "The bottom line is that companies that have to cut back on their infrastructure are coming to us and asking if we can provide a person two days per week to manage their data center, and pay us $200 per hour vs. paying someone's salary."

    Managed services, which give a solution provider responsibility for operating clients' data centers and networks, deliver recurring revenue to VARs and a lower, regular cost to customers, benefitting both parties during a difficult time.

    "Are the projects smaller? We're seeing some of that, but overall we're seeing a lot coming through," said Greg Starr, COO of solution provider IT Works, in the report. "If you're busy with managed services, you're not waiting for the phone to ring..."

    Service Success
    In fact, revenue from professional, technical or managed services increased to 56 percent on average, compared with 49 percent last year, according to the State of the Market. Both small and large VARs are generating more sales from services -- including those solution products with sales of more than $20 million, which now credit services for almost half of their revenue, the study found.

    Solution providers that deliver cost-containment services are successfully approaching small and midsize clients.

    "Upgrades are being put on hold," said David Dadian, CEO of VAR Powersolution.com, during Everything Channel's "Selling Into The SMB" virtual trade show panel discussion. "We're working with clients to make sure their existing infrastructure is capable of getting them where they need to be."

    The opportunities are ripe -- but the cost could overwhelm many solution providers looking to go it alone. Partnering with a larger service-oriented business allows VARs to deliver margin-rich services with the backing of a company with bigger pockets, larger staffs and more resources at their disposal.

    Partnering for Profit
    Obviously, starting from scratch can be a time- and dollar-consuming challenge for solution providers looking to add extended warranty and maintenance contracts to their portfolios. Offerings such as Ingram Micro's Seismic Managed Services, IT Labor Services and Warranty Contract Management eliminate duplicate steps and allow VARs to stretch their resources to meet all clients' needs.

    "Our goal is to give solution providers the ability to access and leverage a comprehensive suite of recurring revenue service offerings that can be private-labeled by the solution provider and offered as part of their own service portfolio," Justin Crotty, vice president of services at Ingram Micro North America, told CRN. "We want to reduce the barriers for solution providers looking to offer recurring revenue solutions."

    The distributor's Seismic Managed Services enable VARs to generate revenue streams for high-margin services; scale their services portfolios without related infrastructure costs; improve service business processes; improve customer satisfaction and service-level agreements; increase profitability through recurring revenue streams; become more well-entrenched in clients' operations and proactively recommend beneficial products, solutions or refreshes. The company's Seismic Warranty Contract Management features a Reseller Services Portal, Product Protection Plan and Manufacturer Warranty Information from key partners such as Cisco, HP, IBM and Lenovo. IT Labor Services includes On-Site Professional Services, IT Staffing, Business Continuity and Disaster Recovery Services and Virtualization Services.

    Throughout the year, Ingram Micro and partners such as Cisco have webinars to educate solution providers about its service offerings. For example, Reseller Portal training is available online on Jan. 27 at 11 a.m. Pacific; Feb. 11 at 10 a.m. Pacific; March 11 at 10 a.m. Pacific; April 8 at 10 a.m. Pacific; May 6 at 10 a.m. Pacific and June 3 at 10 a.m. Pacific. Cisco's complimentary SmartNet ordering training is scheduled to run on Ingram Micro's site at 10 a.m. Pacific on Feb. 25, March 25, April 22, May 20 and June 17. Seminars on leveraging Ingram Micro's virtualization services to increase sales will go live at 10 a.m. Pacific on Jan. 27 and 1 p.m. Pacific Jan. 29. Visit http://www.ingrammicro.com/ext/0,,20698_19722_20699,00.html to register.

    Solution providers also can take advantage of an array of taped webinars on Ingram Micro's site. Topics range from profitability to managed services technology, as well as professional services automation and case studies. These free webinars, some of which require an Ingram Micro customer account number, are accessible at: http://www.ingrammicro.com/ext/0,,20749_19722_20699,00.html.

    Extended Warranties
    Watchdog magazine Consumer Reports has a long-standing point of view against the value of extended warranties. While the debate continues among individuals, businesses can ensure more than peace of mind when they buy an extended warranty from a solution provider: They can count on business continuity, uninterrupted by hardware downtime, since their VAR partner often will provide a replacement within a preset period of time.

    By offering extended warranties, solution providers also deliver predefined terms, conditions and pricing to their customers and a maximized return-on-investment on clients' technologies. As part of this service, VARs may offer an online registration process that is far less time-consuming than the traditional hard-copy registration cards -- a valuable productivity tool for many businesses. And, since the client's existing technology partner provides this service, it is not forgotten -- a frequent problem with extended warranties that span several years -- if a product acts up or dies during the warranty period.

    As extended warranties generally cost between 20 percent and 50 percent of the initial cost, they are revenue-rich for solution providers, industry observers said. Businesses that expect to keep their products for more than two or three years are more likely to use a warranty and, in the current economy, this business "insurance" often is a sound investment since a well-written policy protects a company from unexpected expenses, both technology- and productivity-related.

    Service warranties cover performance as well as the hardware, an invaluable resource for organizations whose lifeblood depends on their network of PCs and laptops. Some plans include batteries, a big saver for an office with a large percentage of mobile users. If a warranty does not offer a replacement or loaner device, solution providers should include an anticipated turnaround time for repairs to ensure customer satisfaction.

    To generate more extended warranty sales, solution providers should be able to quickly outline the advantages of their offerings, perhaps by relating real examples of how particular clients benefitted from their warranty coverage.

    Maintenance Contracts
    Unlike extended warranties that may or may not be used, clients will use a VAR's maintenance contract on a preset basis, be it twice a year, annually or another predetermined frequency. Like extended warranties, these arrangements benefit both parties, since the solution provider is assured of a set amount of revenue and work, and the customer knows its IT partner will do agreed-upon work to extend the life of its technologies.

    Solution providers that attract new clients or change break-fix customers to maintenance-service-contract customers generate steady income each month, while clients are assured their systems are working optimally. These contracts also give VARs another way to differentiate themselves from competitors, and add more value to their relationships. By offering multiple levels of support -- ranging from same-day, on-site support to less costly next-day remote coverage -- VARs can meet every clients' IT and budget needs.

    Demonstrating the ROI is critical to winning a managed services contract, according to VAR executives. VAR Harris Computer Services -- which offers managed firewall service; spam filtering; network system administration; patch management; security configuration policy enforcement; VPN services; remote monitoring and server management; asset/inventory management; security vulnerability auditing and off-site data backup --recommends discussing expectations and writing a contract based on this discussion, investing in the relationship, keeping clients up-to-date on the VAR's work since a good managed services relationship is transparent, and measuring customer satisfaction.

    via ingram micro channel advisor

  • NovaStor forms distribution partnership with Ingram Micro Canada

    NovaStor forms distribution partnership with Ingram Micro Canada

    Simi Valley,USA, January 26, 2009 -- NovaStor, a pioneer in data protection, today announced that it has entered into a distribution partnership with Ingram Micro Canada.

    NovaStor offers a range of top-rated data protection solutions that satisfy the needs of home users, small businesses, businesses with large, heterogeneous IT environments as well as SaaS providers. By now distributing NovaStor products, Ingram Micro Canada is significantly enhancing its data protection offering. In particular, both companies expect strong interest in the two flagship products NovaBACKUP 10 and NovaNET 12.

    NovaBACKUP 10 is the only all-in-one data protection solution including local and online backup, free online storage, disk imaging as well as virus protection. The software gives home as well as professional users maximum flexibility, allowing them to decide how, where and when to back up their data. NovaBACKUP 10 comes in a Professional version (for single workstations), a Server version and a Business Essentials version for small and medium businesses.

    NovaNET 12 provides businesses with a single, professional answer to all network backup needs. The software offers cross-platform support for Microsoft Windows, Linux and NetWare as well as a modular design that allows users to benefit from a central data protection solution with unlimited scalability and flexibility.

    “NovaStor’s partnership with Ingram Micro Canada will significantly strengthen our position in the Canadian market,” says Mike Andrews, Managing Director US at NovaStor. “Being chosen as a partner by this well-known and successful distributor is an acknowledgment of our products’ high quality and user-friendliness.”

    About NovaStor
    NovaStor (www.novastor.com) is a leading, international provider of software solutions for data availability and protection. NovaStor provides software, SaaS solutions and services for local and online backup, restore and retention of business-critical data. Clients include home, mobile, and SMB users, service providers as well as international corporates. NovaStor's cost-effective solutions are platform- and hardware-independent and ensure that optimal technological and economical use is gained from the customer's existing and future IT environment.

    NovaStor is headquartered in Switzerland (Rotkreuz), has offices in Germany (Hamburg) and the USA (Simi Valley), and is represented in numerous other countries through partnerships.

    Contact:
    Mike Andrews
    NovaStor
    80-B West Cochran Street
    Simi Valley, CA 93065, USA
    Tel.: +1 805 579 6700
    Fax: +1 805 579 6710
    mike.andrews@novastor.com
    http://www.novastor.com
    via bignews.biz
  • Sega inks digital distribution deal with GamersGate

    Sega inks digital distribution deal with GamersGate

    Sega has signed a deal with GamersGate to distribute new and catalogue PC titles.

    Football Manager 2009 and Universe at War are the first new games for the service, while catalogue titles will include Condemned: Criminal Origins, Rome: Total War Series and Outrun 2006: Coast to Coast.

    "We look forward to welcoming such a well-established and celebrated partner to our growing online portfolio," commented Theodore Bergquist, CEO of GamersGate.

    "With the addition of Sega's excellent portfolio of games, GamersGate further strengthens its position as a leading digital download portal."via gamesindustry.biz

  • Valve: Pirates Are Just Underserved Customers

    Valve: Pirates Are Just Underserved Customers

    At the Game Business Law summit, Valve talked about Steam, digital distribution and the PC market. Interestingly, Valve sees pirates as "tons of undiscovered customers."

    Valve: Pirates Are Just Underserved Customers

    Dallas, Texas — At the Game Business Law summit at SMU's law school today, Valve's Jason Holtman addressed the business models behind the company's popular Steam service.

    Holtman, who serves as director of business development and legal affairs, says that Valve has sales in excess of 30 million units in their ten-year history. Steam launched in 2004. He remarks, "We're more than just a game company -- we're a platform holder, distributor, publisher..."

    Running through the numbers behind console sales, Holtman points out that there are more PCs in the market than all the consoles combined. In fact, in 2007 alone, over 255 million new PCs were purchased. "That's a huge install base."


    "Everyone's got a PC, they're connected," he says. "If you think about gaming just in terms of what analysts show you...you tend to think about the consoles." Each console company, says Hotlman, has a minimum of 50 people devoted to talking to magazines, appearing in USA today, etc.

    Holtman goes on to say that there's a current meme making the rounds: 'Online sales are replacing retail sales.' "It's not a cannibalization," defends Holtman, "It's not a replacement. It's all boats rising with the tide." Retail sales are rising, just not as quickly. And he says, people are just now starting to get data from online sales.

    Steam currently has 15 million connected gamers, with 1.6 million peak concurrent users. It's available worldwide in 21 languages. "From the outset, we knew we had customers worldwide," says Holtman.

    "And we're a distribution channel, so we've got lots of other people's titles as well." Some three hundred plus games, in fact. "We have a great long tail, by the way...if you want to explore long tail economics."

    "We're not just a way of selling game," reiterates Holtman. "What we are, actually, is a platform." As such, users have to be able to do more than just buy games, the reason Steam has achievements, and lets users talk to friends.

    Holtman returns to this false idea that "Digital sales cannibalize retail," and this time he has proof. "Since Steam is actually a connected platform," he says, Valve can track activation for both retail and digital sales.

    Continue...

  • Sony Online Entertainment (SOE) partners with Valve's Steam digital delivery service.

    Sony Online Entertainment (SOE) partners with Valve's Steam digital delivery service.

    Sony Online Entertainment (SOE) is to partner with Valve's Steam digital delivery service. SOE games including
    "the complete EverQuest and EverQuest II (EQII) collections, as well as Vanguard: Saga of Heroes and Pirates of the Burning Sea will be available".

    According to Steam, "To kick off this monumental event"... we don't know what it's a monument to, "...Pirates of the Burning Sea, Vanguard: Saga of Heroes, EQ Secrets of Faydwer and EQII Rise of Kunark are being offered by Valve at a special introductory price for the first 10 days the games are available for purchase on Steam. New SOE game accounts for the game purchased will also receive 30 days of gameplay included with purchase (this offer excludes existing game and Station Access accounts)."

    Let's hope that SOE executives agree with the line taken by Steam's director of business development and legal affairs, Jason Holtman, who told GameDaily recently that, "Pirates are under-served customers. When you think about it that way, you think, 'Oh my gosh, I can do some interesting things and make some interesting money off of it". via spong
  • PC Game Retail Sales Drop 14%, Revenue Shifts Online?

    PC Game Retail Sales Drop 14%, Revenue Shifts Online?

    Retail PC game sales fell 14 percent in 2008, says research firm NPD Group, with revenue of $701 million down from $911 million in 2007 and $961 million in 2006. Where are all those absent hundreds of millions going?

    Simple, say some. Online.

    The rub? Market researchers like NPD only report retail PC game sales, leaving validation of online claims in a lurch. That may be about to change, but for now, we lack reliable independent indices for games purchased digitally, be they individually, iteratively, or as "services" like MMO subscriptions.

    Confession: I haven't purchased a PC game from a retail store for years. Yes, the PC games I review ship to me straight from publishers, but I only ask for copies of what I review, and that adds up to a fraction of what ships annually.

    I play dozens more besides, whether for my own edification (mostly wargames and simulators), or just to put a toe in the water.

    And I purchase all of them online.

    With respect to the folks stuck behind tube-lit cash-wraps, I despise sneaker shopping. I hate driving, peddling, or hoofing to malls and shopping centers thronged with people just as irritable as I am to be there, contributing to the systematized bedlam, wandering through rude, surly, elbowing crowds full of desultory consumers. I hate parking half a mile away in rain (or sleet, or snow) dodging other drivers haphazardly probing for rock-star stalls, stepping over pitted concrete rain puddles, tactically avoiding flocks of baby strollers and shoppers thrice-wide with shopping bags slung from arms like drooping wings. And the soundtrack: Hissing espresso machines, the whine of clean-sweepers, splashing dummy waterfalls, the grating whump-whump-whump of techno music, the toddlers on kid-leashes, howling like tea kettles.

    And so on.

    Most of all? I hate the way PC games have become store pariahs, crammed into the backsides of accessory stands, bookend-out, not a one front-facing.

    It's a form of deflation: As prices drop in a recessing market, consumers refrain from buying in anticipation of even lower prices, sending the market tailspinning.

    Likewise, as retail PC game sales slow and retailers quash marketing plans and scuttle store-stock, PC gamers view physical retailers as unreliable purchase points. The proverbial vicious circle.

    The picture brightens slightly if we credit online sales. But all we have to date are claims. Gabe Newell, managing director for Valve Corporation (which owns Steam) says online sales are growing, but isn't sharing figures. Direct2Drive, a subsidiary of IGN Entertainment and one of the oldest digital distributors, has, as far as I can tell, never supplied online sales metrics. In short, analysts and journalists are navigating a sea full of sunshine in boats without rudders, compasses, or paddles.

    So with sympathy to all the developers and publishers perturbed by reporters who like to crank about PC gaming: Show us the money. NPD's monthly sales approximations backed by retailer data are newsworthy. Exuberant claims about online game sales without supporting evidence, aren't.

    via Matt Peckham @ PCWorld

  • Canadian Tire stops selling online

    Canadian Tire stops selling online

    Canadian Tire will stop home delivery of products now available on the Web as of Jan. 29.Canadiantire.caCanadian Tire will stop home delivery of products now available on the Web as of Jan. 29.

    After operating for eight years as an e-commerce site, Canadian Tire Corp. has decided to stop selling its merchandise on CanadianTire.ca in a cost-cutting strategy that could help save it money in tighter times.

    The company will stop home delivery of products now available on the Web as of Jan. 29, the retailer announced on the Web site Monday afternoon.

    The site is mostly being used as a research tool by customers and was not making enough money to justify the expense, company spokeswoman Lisa Gibson said.

    "Some of these things that people were looking into [on the site] are extremely expensive to ship - things like patio sets - and people were just looking online to buy it [in store.]"

    She added that the store was also spending too much money on third-party help to fill Web orders and on warehouse space that was allocated strictly for the online business.

    Joining the likes of Sears.ca, which already had a delivery infrastructure in place due to its catalogue operation, Canadian Tire began selling its wares online in late 2000. Others, like Hudson's Bay Co., began selling certain items online and then pulled back from selling lower-volume categories in 2003, using its retail sites as primarily informational vehicles. Under its new ownership, The Bay began selling an expanded selection of goods online last year. Others, like Wal-Mart Canada, developed Web sites to showcase products but did not sell online.

    It underlies a reality that many large bricks and mortar retailers have faced in Canada since the wave of online selling began a decade ago, noted retail industry analyst Richard Talbot, president of Talbot Consultants International: that it is expensive to sustain an online retail business in Canada given the country's population relative to its geographic size.

    "This is really the first general merchandise store that has pulled out like this, but it's not really a huge surprise," he said.

    "Everybody I think knows that with the exception of some categories like CDs and books, most people use the Internet to check prices and product specs and most of the purchase is done in the stores. I think this will be the first of several as more and more retailers realize that consumers are doing this.

    The fact that Canadian Tire has more than 450 retail stores across the country and frequently trumpets that 85% of Canadians live within a 15-minute drive of one of its stores could actually hurt its Web business, Mr. Talbot said.

    "They have such a strong network of stores you might as well go to the store [for purchase]. And those who do not live near the stores are really far out and expensive to ship to."

    Ms. Gibson said that some of the money saved in making the shift will be redeployed to enhance the current research capabilities and online features. This spring, the retailer will be testing a program in select markets where consumers can order and pay for items online and pick them up at a retail store.

    The announcement on the company's Web site said that the move was being made "because our site is primarily used for research and product comparison." The retailer will continue to sell gift cards online, it added.

    In its most recent third quarter, Canadian Tire saw quarterly profit rise 6.3% and the retailer reiterated its full-year forecast, which had been cut in August amid concerns about the economy.

    But analysts are questioning how well the retailer will fare in the months ahead.

    "The consumer slowdown and rising unemployment contains dangers for Canadian Tire on almost every front: not only are sales and margins at risk, but the financial services business needs to manage down risk while preparing for rising costs of write-offs and insurance products," analyst Perry Caicco of CIBC World Markets wrote in a recent note to clients, predicting the retailer will face rising inventory levels due to a consumer spending pullback.

    via FinancialPost

  • Microsoft store exists only behind closed doors

    Microsoft store exists only behind closed doors

    450_REC_in_store_01-

    REC offers a model to improve shopping experience for customers

    To the frustration of some of its fans, Microsoft Corp. has consistently said it will not open any flagship stores.

    But in a Redmond warehouse, marked only with the initials "REC" on its doors, Microsoft has built a multimillion-dollar model of what a hypothetical Microsoft store could look like.

    The construction is exact. There are listed hours on the automatic sliding doors, a break room complete with lockers, and prices attached to the various Xboxes, mice and Windows Vista-powered personal computers.

    The concept store, which Microsoft calls the Retail Experience Center, has two goals: Showcase various displays that retailers and computer makers can replicate, and demonstrate how Microsoft technology can work in a store environment.

    Construction started in March and the 20,000-square-foot facility opened within six months. Already, many major retailers have toured it.

    For too long, said Bill Brownell, Microsoft's general manager of worldwide retail services, Microsoft allowed retailers and computer makers to control how PCs running Microsoft software are displayed.

    "We're not planning to open stores, but we need to learn more about stores," he said. "We need to take more of a leadership role."

    "Retailers have lost their way," said Parisa Zander, Microsoft's director of worldwide merchandising, store design and the Retail Experience Center.

    Zander said many retailers still display PCs in a way that makes customers feel like thieves. Bars with locks are placed across keyboards, making it difficult for customers to pick up computers. The PCs are put on unattractive metal or carpeted shelving. And they often are placed at the wrong height level.

    In order to make a compelling case for change, the various bold displays at the Retail Experience Center have gone through various focus groups.

    "It's not just (that) we think so," Brownell said.

    So, for instance, Microsoft has grappled with questions such as how to best sort and display PCs on the floor of a store. By price? By screen size? By model?

    Microsoft routinely sets focus groups loose in the store, asking them what they would buy and why.

    For retailers, Microsoft has a set of displays that they can duplicate or customize, with Microsoft's help.

    "If they want to follow the whole Windows look, they can," Brownell said.

    The "whole Windows look," which is set up in the center of the Retail Experience Center, includes light faux-wood tables, grand arches (to conjure windows) and yellow lamps with the Windows logo embedded in them.

    But retailers also can use simpler solutions.

    "You don't have to use the exact model, but the fundamentals," Brownell said. "You can do little things."

    So, there are several options in a corner.

    First, to give retailers a sense of what not to do, Microsoft has re-created an actual display from an unnamed U.S. store.

    It includes several turned-off PCs on carpeted shelves, surrounded with accessories -- CD packs, computer bags, software. It all competes for the shopper's attention.

    An alternate approach on display: Activate the PCs and add only "key" items around them, such as packages of the Vista operating system, Microsoft Office or CDs.

    Or, put in some fake wood lining below the PCs. Or not only put in the fake wood lining, but also put simple frames around each of the PCs on display.

    Microsoft does not own stores nor does it sell PCs, so it can't completely dictate how computer makers sell their wares or how retailers present them.

    "A few want their own way," Brownell said. Mostly, though, he said, there "has been a huge amount of support."

    Microsoft, he said, had made other moves to get closer to the stores where its products are sold. The company has put 150 "gurus" in shops across the U.S. to give demonstrations and answer questions about PCs as well as Microsoft products.

    And, in fact, the "break room" in the Retail Experience Center exists to show how Microsoft "gurus" can build relationships with store personnel, by giving away free Microsoft paraphernalia as well as pizza.

    An online site displayed on a big screen there also shows how store personnel can get free Microsoft wares if they take the time to learn a little more about Microsoft products online.

    The back end of the Retail Experience Center is run by Microsoft technology that any store can adopt.

    Microsoft technology, for instance, ensures that it is easy to power off and power on the 100- plus PCs in the center, said Tim Gruver, the worldwide director, retail technology strategy, at Microsoft.

    And many items feature Tag, a bar code scanning technology that Microsoft released two weeks ago at the Consumer Electronics Show in Las Vegas.

    Tag allows customers to scan a colorful bar code -- called a "Tag" -- with their cell phones to look up more information about a product (Gruver said that one "very, very large" retailer was planning a prototype of scavenger hunts using Tag in some stores).

    Even though it's Microsoft's showroom, there are signs of its rival.

    In a room to the side, Microsoft has re-created a bit of an Apple store.

    Brownell would not say much about it.

    "We play with our competitor," he said.

    via seattlepi.com

  • Distribution innovation drives value creation

    Distribution innovation drives value creation

    Lasky: Innovate In Distribution, Not Content

    Lasky: Innovate In Distribution, Not Content Gaming is at a crossroads, says industry veteran Mitch Lasky, keynoting the Game Business Law summit at SMU's Law School -- and not the sort of crossroads most conventionally-discussed.

    Lasky, now a partner at Benchmark Capital, once started his own MMO, worked as an executive at Activision, and was responsible for Jamdat, a mobile company purchased by Electronic Arts.

    Benchmark has been one of the most prolific investors in games, including companies like Linden Labs, Riot Games, and Vivox.

    "I think the risks and the opportunities are tremendous," Lasky says, stressing that we're in the middle of a profoundly changing market -- "Not the conventional transitions that you hear people talk about in the game business."

    Everyone talks about the hardware cycle. But these changes, Lasky says, will "sweep away many of the companies we've come to take for granted."

    The key for Lasky's scenario is understanding the concepts of content innovation and distribution innovation. He states: "Content innovation and distribution innovation change the industry in very different ways."

    Citing Guitar Hero, and Wii as examples, Lasky says, "Content innovation drives audience expansion." "But what's really interesting is the second rule, not the first," he continues. "Distribution innovation drives value creation."

    "Content doesn't create value in the videogame business. Everyone writes about it," Lasky says, "But distribution creates value. He gives the example of id Software and Doom's shareware model. It wasn't gameplay, he says, it was the distribution method that made the game a success. Lasky sees Valve Software's Steam service to be a later-day successor to shareware's innovated distribution.

    And with twenty-million users: "I consider Steam to be one of the most -- if not the most -- valuable assets in the videogame business."

    Lasky sees EA's recent announcement that the world's largest disc publisher will now use Steam as extremely important -- both as proof of Steam's legitimacy, and of EA's transition from disc-based publishing.

    Discussing "The Shiny Disc Era," from 1992 to 2004, Lasky charts the high-performance of Electronic Arts, well above the performance of the Standard and Poor's 500 Index during those same years.

    EA was the leader in CD-ROMs. Lasky says that during senior management meetings inside Activision, they would lament that Electronic Arts could produce fifty-percent more discs than anyone else. "They could get 5,000 units into Zimbabwe," groused Activision.

    "It was really their distribution muscle that was responsible for their tremendous success," says Lasky of EA. But there are problems with discs, including huge asset creation costs, manufacturing and platform licensing, recurring customer acquisition costs, shipping, retail, inventory management, and piracy & IP protection.

    "The world changed in 2004," says Lasky. "Really, really changed. Obviously, the shiny discs didn't go away. But the primacy of the shiny discs as the sole method of distribution for the videogame industry started to erode."

    "This is what changed. The tsunami of the internet finally reached the shores of the videogame industry in a big way," explains Lasky. "What changed in 2004 was that online became a viable method for distribution for software -- not for content, but for distribution."

    "In the online business, distribution and customer acquisition are merged. It's the same event," concludes Lasky.

    And, as Lasky believes, it isn't gameplay innovation that creates value -- it's distribution innovation. Content might be what gets the good press, but distribution is what gets the profits. "These are services, instead of products." Instead of developers making gold masters, Gmail is still in Beta. "You're never really done with the software."via GamaSutra

  • Blockbuster Deal to Put Movies on Many Digital Devices

    Blockbuster Deal to Put Movies on Many Digital Devices

    Blockbuster and Sonic Systems are teaming up to make digital content available on a wider range of electronic devices, the companies said on Wednesday.

    Sonic Systems, perhaps best known for its Roxio disc-burning software, will provide a back-end digital content delivery system under the multiyear agreement as Blockbuster seeks to bolster its online offerings for a greater range of devices and in different formats.

    Sonic Systems jumped into the digital content delivery space last November when it acquired CinemaNow, a company that offers services that let people download a movie and burn it to a DVD, buy pay-per-view downloads and download movies to own.

    CinemaNow licenses content from major movie studios such as 20th Century Fox and Paramount Pictures and also works on the technical side with heavyweights Hewlett-Packard, Microsoft and Samsung on content distribution.

    Blockbuster will sell the services, powered by Sonic Systems, under its own brand name. The two companies are also working with consumer electronic manufacturers to make the services compatible with Apple and Windows PCs, portable media players, set-top boxes and mobile phones, among other devices.

    Retail Blockbuster stores will sell some of those devices, as well as making them available through the company's Web site and other retailers, the companies said.

    The two said the deal will result in one of the most expansive video-on-demand offerings on the market. Blockbuster has been seeking ways to compete with companies such as Netflix, which has supplemented its mail-order movie delivery service with a set-top box for on-demand streaming plus streaming through Microsoft's Xbox and other digital media players.

    As of last November, CinemaNow was offering at least 6,000 movies, TV shows and music videos through its services. Blockbuster launched its own set-top box, MediaPoint, in November with around 2,500 titles. Netflix offers 12,000 titles via its set-top box.

    For the MediaPoint, subscribers pay a one-time US$99 fee, which also includes 25 prepaid movies, and then pay between $1.99 and $3.99 for each title rented. There's no monthly subscription fee.

    Via PCW
  • Nexway Acquires Boonty: Birth of a European Leader in Video Game Digital Distribution

    Nexway Acquires Boonty: Birth of a European Leader in Video Game Digital Distribution

    Nexway, the European major actor of digital content distribution over the Internet, today announced the acquisition of Boonty, leading global expert of online casual games distribution. Nexway is thus accelerating its growth strategy on the casual gaming market into full bloom.

    This strategic acquisition enables Nexway to strengthen its ambitions to become the leading specialist of video games digital distribution and to clearly position itself as a major player on this market. Recent distribution agreement signatures with big names on the video games market, such as THQ, Sega, Focus, etc., are significant actions clearly showing that Nexway is now renowned as the specialist in digital content distribution, also in the video games market.

    The Boonty acquisition enables Nexway to significantly increase its impact on the casual games market, thanks to the integration of 400 casual publishers representing 7,000 references and the management of 200 international game channels on global e-merchant sites totaling more than 5 million unique visitors per month. Boonty concluded numerous agreements with world-class publishers, such as Atari, Infogrames, Ubisoft, Acclaim, Iwin, Alawar, Big Fish Games, etc.

    Boonty registered in 2008 more than 250,000 paying downloads, representing an increase of 30% against 2007. Nexway for its part overpassed the threshold of 1 million game and software downloads and achieved a turnover of about 30M€, with a constant growth of more than 90% against 2007.

    Nexway + Boonty: first European “game” digital content

    Thanks to this acquisition, Nexway builds a global video games offering including both “casual” and “gamer” titles, taking a unique position on the market creating better competitiveness to its big portal clients.

    The merged Nexway and Boonty catalog now represents the leading European offer of video games, thanks to its large selection as quality of titles. This strategic acquisition enables the implementation of sales synergies by the aggregation of “gamer” and “casual” titles to respective partners: Boonty distribution channels and Nexway e-merchant and e-retail channels.

    Nexway also reaches a new international dimension in digital distribution with the increase of its workforce to 125 members in over 12 countries, and the rise in its worldwide reputation.

    With Boonty having a strong image in the casual gaming sector the acquisition provides Nexway a new positioning with true legitimacy to game publishers and a reinforced competitiveness to portals.

    « We are particularly happy about this acquisition, since it emphasizes our presence on the video games market worldwide and asserts our positioning as the leading European digital distributor dedicated to assisting publishers with their online software and video game sales.» says Gilles Ridel, CEO Nexway.

    « It is a great pleasure to achieve this venture with Nexway, whose dynamism and good health are compelling advantages for the future, and that strengthens Nexway’s position on the casual segment worldwide. » says Mathieu Nouzareth, CEO, Cafe.com

    About Nexway

    Nexway, market leader in digital distribution of software and video games, created in 2002 by Mr Gilles Ridel is a French company with its head quarters in Nanterre. Nexway is a digital distributor of software and video games and acts as a distributor via its network of e-channels on major portals on the European Internet scene (Fnac, Orange, 01Net, Pixmania, Alice, Alapage, Virginmega, ThePhoneHouse, RueDuCommerce, ScoreGame, ElCorteIngles, Gamestop, Tom’s Guide, etc), and as a service provider / ASP integrator for global publishers (Electronic Arts, Symantec, Kaspersky, etc.) who benefit from Nexway’s e-commerce expertise. Nexway is ranked in the Top 10 of 2008 Deloitte Technology Fast 50, and in the Top 100 of Fast 500 EMEA of the fastest growing technology companies. Nexway has three financial investors within its capital: CIC Capital, Turenne Capital Partner, and Xange Equities. For more information: www.nexway.com

    About Boonty

    Boonty offers Internet portals, ISP providers, mobile operators, PC manufacturers, a digital distribution offering via video game channels in white label: content selection and negotiation with publishers, complete download platform design and management, online marketing and channel animation. Casual and regular gamers have access to a catalog of more than 7,000 PC and mobile games. Boonty has distribution agreements with major market publishers (Atari, Ubisoft, Eidos, Codemasters, etc.) and more than 200 partner portals over 25 countries.

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