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7/27/2010 - Following my heads-up below, the General Administriation of Press and Publication has now officially granted permission for the release of the "Wrath of the Lich King" effective August 18.

 

7/24/2010 - My friends in China now tell me that the Chinese Authorities [specifically the General Administration of Press and Publication] will grant Net-Ease the go-ahead to release the  “Wrath of the Lich King” expansion pack for the online game “World of Warcraft” effective late next month.

 

7/14/2010 - http://video.msn.com/video.aspx?mkt=fr-ca&from=truveo&vid=671f1fa4-759d-45e6-859a-d4fc4a93e407 - Business News Network Canada - What ails the video game console space?

 

7/5/2010 - China's third largest online-game company NetEase.com has managed a new record for its flagship game „Fantasy Westward Journey“ melden. According to them, 2,6 million gamers were online simultaneously which means that they beat their August 2009 when 2,56 milion users were logged on at the same time - as per JLM PacificEpoch.

Darüber hinaus hinaus plant NetEase.com einen weiteren Alpha-Test seines neuen Online-Spiels “Jingling Muchang” am 8. Juli, wie es heißt. (ami)

6/8/2010 - Shanda, China's second largest video game company, continues to take a beating. Their market share in MMOPS is dropping like a rock and now is at 14% versus Ten Cent's 27%. Net Ease is now #3 but expected to overtake Shanda sometime before end of this year.

 

4/21/2010 - The Chinese consumers are still waiting for the Lich King: China's third-largest Online Game distributor Net-Ease is still struggling to get permission from the Chinese authorities for the World of Warcraft game "Wrath of the Lich King". The latest is that the GAAP [General Administration of Press and Publication of China] has rejected Net Ease's application for the game. This rejection will be appealed but until this is resolved, the Chinese consumers better exercise patience. The game has been  on the market in North America and Europe since 2008. The final acceptance or rejection of the game in China will represent the difference of a so-so year and a terrible year for Activision.

 

2/24/2010 - The German video game market was slightly negative in 2009:

                                                                        2009                              2010

                          Software                             55.4 mio pcs                55.6 mio pcs

                          Consoles                              4.3 mio pcs                  4.6 mio pcs

 

However, Console games did extremely well and rose a stunning 22% in 2009. Conversely, mobile software and PC software got a hammering with minus 24% and minus 11% respectively.

 

2/8/2010 - What I reported on 1/18 below is now confirmed. Ten Cent has replaced Shanda as the market leader. Ten Cent had a market share of 24.1% in the fourth quarter; Shandea 20.1% and Net Ease 16.1. Total sales in the fourth quarter stood at $1.1 Billion, up 47.6% versus fourth quarter 2008.

 

01/19/2010 - http://video.msn.com/video.aspx?mkt=en-ca&from=truveo&vid=e2bc1b21-415d-4cae-afcd-9638eafb0cc1 - Interview at Canadian TV, Business News Network, on Video Game December sales and outlook for 2010 and 2011

 

01/18/2010 - the Chinese online game market continues to climb rapidly - to US$ 4 billion in 2009 and expected to grow at least 25% in 2010. There are now 70 million gamers in China and this number is expected to double in the next three years. At this point, TenCent

is now the market leader, followed by Shanda as #2 and NetEase as #3. Incidentally, NetEase is the Chinese distributor for World of Warcraft by Activision. The game has been blocked by the Chinese authorities since September last year since, as they claim, NetEase did not get the requisite authorizations when the rights to the title moved from The9, the old distributor, to NetEase. However, some of my Chinese friends tell me that approval is now likely to be forthcoming later this month. However, the spat between Google and the Chinese authorities could well result in a further delay in this approval.

 

Incidentally, there are any number of estimates as to how many internet users there are in China, ranging from 290 million to 400 million. The official figure is 384 million at the end of 2009, up 28.9% for the year.

 

11/18/2009 - Sony is revamping its advertising and gives it new focus. Sony spends about $5 billion a year on advertising. This massive campaign is about to undergo a fundamental change. Instead of spreading this budget over a vast array of products and brands, Sony has now decided to bring "shock and awe" to the consumer electronics field by focusing their spending  on a handful of flagship brands  with  budgets that guarantee exposure dominance. One of these is the PS3 and the campaign is expected to heavily rely on TV and online promotions. Product focus is not only the console itself but also high profile games such as Gran Turismo 5 Prologue, Drake's Fortune and others.

 

 

10/27/2009 -  Chinese online gamers have now waited for more than a year for the second major add-on for "World of Warcraft” - Wrath of the Lich King.  After a change in providers and a host of delays, the game should be up and running as of middle of November as per the Internet Portal Uuu9.com.

 

10/08/2009 - Is the Chinese online market undergoing a change in leadership? The Chinese online market is estimated at an annual $2.7 billion sales value. Of this, Shanda, the market leader holds about 19%  and its main competitor Tencent about 16%. Shanda's sales in the last quarter grew an astounding 54.6% to $157 million. However .................... two of its games account for 77% of the total and both games are quite old - Legend of Mir with 56% of the total was first introduced in 2001 and World of Legend, responsible for 21%, was released in 2003. Shanda's today has no games in the top ten of the online market and its active player population, estimated at 6 million,  is thought to be stagnant to slightly declining. Observers of the online video game scene think that Tencent is about to overtake the market leader. Tencent now has three games in the top ten [Cross Fire, QQ Dance and QQ Speed] and is estimated to grow at a 80% clip. Overall, if these trends continue, it is expected that Tencent will overtake Shanda within the next three months.

 

09/17/2009 - ToysRUs Germany has teamed up with 4u2Play, a internet provider of video games, in an effort to broaden its game offering and to strengthen its downloadable functionality. 4u2Play can now be accessed via the ToysRUs website www.toysrus.4u2play.de as well as on its own website https://www.4u2play.de.

 

08/15/2009 - BITKOM [German Association for Information Technology, Telecommunications and New Media] forecasts 1% growth in the German video game market for 2009 - to Euro 2.76 billion this year from Euro 2.73 billion last year [US$4.06  billion in 2009 at projected exchange rate of 1.474 versus US$3.84 billion at actual exchange rate of 1.4097 at December 31, 2008]. 

 

07/12/2009 - Netease disputed the figure given below. NetEase-Projektmanager Li Riqiang clarified that the yearly license fee for WoW for 2009 was $60 million and not one penny more.

 

05/26/2009 - WoW saga: Netease apparently paid Bizarre $565 million for the WoW rights in China. The9, who held the license before them, had sales from it per quarter of around $60 million with a market share of 7.5% last quarter. The problem is that The9 license expires on June 7 and the transfer to Netease, if the Chinese authorities work quickly, will take up to three months in which the game will not be available to Chinese gamers. Competitition is just waiting for this and I expect The9 with Atlantica, Shanda with Aion, and KingSoft with IXOnline3 to make the most of this vacuum. You can argue that Bizarre got its money and is hence in clover. Not really - Bizarre also gets a 10% royalty rate and thus stands to lose about $6 million during these three months of blackout. Also, the WoW extensions Lich King and Burning Crusade are also in limbo until they get their licenses which is not expected until September.

 

05/25/2009 - Shanda Interactive is planning of going public with its daughter Shanda Games Limited whilst hanging on to the majority of ownership. This move is designed to further strengthen Shanda's leading position in the Chinese gaming sector and to make acquisitions in it easier. First target for this strategy is said to be Gaming Portals 178. While not in the top 5 Chinese gaming companies, 178 would still be a very respectable addition to Shanda Games. 178's website now has about 128,000 daily unique visitors with an average of seven page views.

 

05/25/2009 - The WoW saga continues. The9 had sold playing rights to gamers for WoW and these rights, unless transferred to Netease, will expire at the end of this month. This is part of the negotiations ongoing between the two Chinese gaming giants and it is expected that a friendly resolution will be found and all license rights will be transferred to Netease no later than June 7. The continued reluctance from the side of the Chinese authorities to grant approval for Bizarre's "Wrath of Lich King" is expected to evaporate at about the same date.

 

05/12/2009 - A Chinese investor group, led by Joy Media Group founder Jacky Tung, has for a while been trying to buy Hurray Holding Co., the leading Chinese ringtone provider. He is now getting heavy-duty competition in that Shanda, China's market leader in online gaming, began talks a week ago with Mr. Songzuo Xiang, CEO of Hurray, with a view of acquiring 51% of Hurray's equity. This is, if successful, expected to  pave the way for Shanda to capture a large share of China's mobile gaming market. 

 

04/21/2009 - I said on 3/24/09 [below] that The9 was playing hardball. Since then, Bizarre has  given the rights for WoW to Netease.com - China's #2 MMORPs provider. Now, The9 is suing Bizarre for $100 million. Also, the Chinese Authorities [GAPP] continues to be very uncooperative in granting approval for Bizarre's "Wrath of the Lich King". Cause and effect?

 

04/06/2009 - PS3 is beating the WII in Japan. This is apparent from market research carried out by Enterbrain, the Japanese game data tracking service. According to them, Sony's PS3 sold in March 147,000 units in Japan whereas the WII moved only 99,000 units. This is the first time that Sony has clearly beaten Nintendo in this the world's second-largest video game market. Microsoft's XBox360 remains a very distant third in Japan - a position they have occupied ever since the other two competitors put in their first appearance.

 

03/31/2009 - Tencent anticipates that the Chinese MMORPG market will grow another 30% this year to somewhere north of RMB 26 billion or US$3.8 billion. Tencent also claims to have captured the #3 slot in the marketshare line-up in the fourth quarter with a market share of 15.8%. Industry insiders believe that Tencent has grown further in the first quarter of 2009 and now has a market share in excess of 20%.

 

03/24/2009 - Update to entry below - The9 is playing hardball.

 

They derive 90% of their income from the World Of Warcraft license and the agreement with Bizarre is coming to an end in June. The9 has for the past six months tried to get an extension of this agreement but Bizarre is strangely uncooperative - the fact that the game is only #3 in China versus being #1 worldwide may have something to do with this.

 

Now, equally strangely, the Chinese General Administration of Press and Publication [GAPP] is delaying approval for the Bizarre game "Wrath of the Lich King" as not being "in line with current regulations governing the category in the People's Republic of China".

 

03/23/2009 - Update to entry dated 01/02/2009 - The Chinese online game market [MMORPgs] grew by 61.9% in 2008 - from RNB 11.35 billion in 2007 to RNB 18.38 billion in 2008. If expressed in US Dollars, growth was even steeper as the RNB appreciated against the Dollar by 6.7% in the period. Current predictions are that the Chinese market will tripse to RNB 54,27 billion by 2011.

 

Current market leaders are Shanda, Netease, The 9, Giant Interaction Group, Tencent and Pefect World, pretty much in this order.

 

The most popular game is Westward Journey Online 2 by Netease whereas The World of Warcraft by Bizarre - the undisputed market leader worldwide and licensed in China to The 9 Group, only occupies the #3 position in China

 

02/10/2009 - Sohu, one of the largest Chinese internet companies, just reported record sales and earnings for the quarter and year ending December 31, 2008. The company posted total quarterly revenues of USD121.6 million, up 86% year-on-year, with advertising revenues contributing USD46.6 million — up 38% year-on-year — of that total. Online game revenues hit USD58.4 million, up 7% quarter-on-quarter. For the entire 2008 fiscal year, total revenue hit USD429.1 million; advertising revenues totaled USD175.9 million, up 48% year-on-year; and online game revenues were USD201.8 million. They also anticipate a very strong 2009 with online sales being driven by two new games to be released around middle of the year - Immortal Faith and Duke Of Mount Deer. The company is quoted on the Chinese stock exchange with 25% of its shares being owned by the founder, Charles Zhang

 

 

01/21/2009 - The German Video Game market is thriving. The software segment climbed in 2008 by 25.5% to Euro 695 million [$895 million]. In terms of units, the market grew by 16%. 

 

 01/02/2009 - The Chinese Video Game market grew in 2008 by an approximate 40% to a total of 54 billion Renminbi or about $8 billion. Consoles and Accessories account for nearly 30% of this number or about $2.2 billion. Boxed Software is worth about $1.1 billion - of which about $1 billion is pirated. Online game sales grew an astounding 50% to $2.2 billion, played by more than 40 million gamers, mainly massively multi-player online role playing games (MMORPGs), . Shanda Interactive Entertainment Limited is the dominating factor in this field with a market share of 18.3%.

 

10/22/2008
Altium Securities in the UK just made the following annnouncement:
 
Despite the announcement from Game Group that its HMV division would be entering the pre-owned games market broker Altium Securities re-iterated its 'Sell' recommendation.
 
Altium wants to recheck its facts a little. HMV is NOT a division of the Game Group but rather a public limited company under the name of HMV Group Plc. HMV is also an independent specialty retailer and competitor of Game Group. The Game Group has been in used games for a very long while and they are not "entering" this market. And, finally, the Game Group has not issued a press release since October 15 when they announced the appointment of Terry Scicluna as Chief Operating Officer.
 
9/3/2008
There are persistent rumours that Sony plans to release middle of next month a new version of the PSP in Japan to preempt the equally rumoured release of a new and more economical version of the DS by Nintendo later this year in reaction to the disappointing competitive standing of Nintendo's handheld against that of Sony in the Japanese market. However, my friends also caution me not to expect the widely rumored price cut of the old PSP in Japan. That, apparently, is not going to happen.
 
8/5/2008
The Thai Authorities banned the sale of Grand Theft Auto IV after a teenager confessed to the killing of a taxi driver because he wanted to re-enact that scene from the video game. I understand that the Malaysian and Phillippine authorities are considering similar bans.
 
 
7/12/2008
The German market for Video Game software grew by 39% to 282 million Euros [or about $450 million] during the first half of this year. Nintendo's DS leads the pack with a market share of 36.4% [2.8 million games]. The WII grew like gangbusters, from 5% market share last year to 14.6% by end of June this year. PS2 continues to do well and holds the #2 market share slot with 22$. PS3 also grew rapidly and now holds 10.9%. 
 
 
5/27/2008
The forthcoming merger between Vivendi Games and Activision is predicated on Vivendi's strength in the subscriber-based Massively Multiplaying Online Role Playing segment in which they reign supreme with more than 10 million subscribers [and about 60% market share] for their downloadable game World of Warcraft. However, this is being challenged by a relatively minor upstart -  Eidos Interactive/Funcom. Their Age of Conan game was just released a few days ago and they shipped 700,000 units worldwide for this release. In addition, they shipped 111,000 pcs of their Collectors edition which has already totally sold out. This compares with World of Warcraft's pre-release shipments of 250,000 pcs for North America and another 280,000 for Europe in 2004.
 
Another challenger is also on the horizon - Warhammer of Electronic Arts scheduled to be released October 7, 2008.
 
All three operate on a monthly fee basis - $14.99 per month in the United States.
 
Looking at the web traffic, particularly the Age of Conan game represents a clear challenge to World of Warcraft:
 
 
Warhammer is tracking with very low numbers at this point but then the game is still more than four months away - it is surprising that it is showing up at all at this early stage.
 
Blog Metrics also tell their story:
 
 
Blog Metrics demonstrate consumer interest and thus typically are the precursors to web traffic and then purchases. On this basis, World of Warcraft has a real competitive challenge. However, not all is lost. Vivendi stands ready to release its next version of World of Warcraft in November - Wrath of the Lich King - and this should help Vivendi and Activision to keep their competitive standing intact.
 
 
 
4/29/2008
This was the first day of GTA 4. Virtually all of GameStop's stores sold out within hours. They hope to get new supplies ths weekend. The first reading is that the first day is about 50% above Smash Bros Brawl and about double that of Guitar Hero III.
 
This is how the Blog Metrics reflect today:
 
This would suggest that the 4 million copies expected to be sold in the first week are clearly attainable.
 
04/28/2008
 
Nearly five months ago, I had asked the buyers to rank what they thought were going to be the top video games this year. I have now
updated this list by adding a sixth column to provide an indicator of where we are today:
 
 
 
Sofar, the winner is Nintendo's Smash Bros Brawl with 2,700,000 units sold in March. How will the next blockbuster, Grand Theft Auto IV, measure up to it?
 
Probably the best measure is to look at a comparative Smash vs GTA Blog Intensity Metric. Blog Metrics are indicative of consumer interest and therefore a pretty good pointer to eventual purchase intention:
 
 
What this seems to suggest is that the GTA interest level is much more broadly based than Smash Bros Brawl at the same stage of the cycle. On this basis I would argue that GTA is going to be the winner. 
 
 
02/04/2008
About 10 days ago I listed the top twenty games for 2008 as ranked by the buyers [go to Who we are tab, click on it and then click on Media Articles for the story as run by TD Monthly]. Three of these are now coming down the pike in the course of the next couple of days; Devil May Cray by Capcom on PS3 and XBox360 on 2/5; Smash Bros Brawl by Nintendo on WII on 2/10; and the Club by Sega on XBox360 on 2/19. I asked the buyers who they thought would win and I also ran a Blog Intensity Metric and a Webtraffic Metric. Both graphs  are shown below:
 
 
 
 
These metrics agree with what the buyers said: Smash Bros Brawl by Nintendo on WII will win hands down.
 
11/17/2007
The release of Rockband is just around the corner - 11/20 to  be precise. How will it stack up against the very successful Guitar Hero III? I first talked to my friends at GameStop and they are telling me that Rockband pre-release orders are strong but only about 75% of what was the case for Guitar Hero III just before release. Just to put this into context, Guitar Hero 3 sold 1.4 million copies between October 28 and October 31 and is now mostly out of stock at GameStop.
 
I also looked at the web traffic of both and used, as a sanity check, Halo 3 as a control. 
 
 
This suggests that the interest level for Rockband started from a lower level but is now pulling even with Guitar Hero III .
 
I also looked at Blog Intensity metrics from Nielsen - which indicates that the interest in Guitar Hero 3 continues on a very high level
 
 
In short, Rockband is going to be a very respectable entrant but not quite in the same street as Guitar Hero III
 
10/10/2007
In my Video Game analysis of October 4 I predicted that ERTS had had a fabulous Q208 and that the outlook was very good for the company for this quarter - Q308. I looked at the two titles out just now - NBA LIVE 08, released a week ago; and FIFA SOCCER 08, released yesterday. Both were also very recently released in Europe. Here is the first look on how the two games are doing:
 
* In the US, both titles are performing very well. NBA Life 08 is beating its TakeTwo competitor NBA 2K8 hands down. The Blog   intensity level [which denotes consumer interest] suggests the same. * European reports indicate that both titles are faring exceptionally well there, too.
 
In addition, FIFA ONLINE 2 was released in Korea two weeks ago. FIFA ONLINE is the #1 online sports game in this huge market [$3 billion in sales annually] and this latest release appears to be tracking very well.
 
 
10/2/2007
Movie Gallery just announced that they are closing 520 stores [out of currently 4500] in order to generate about $1 Billion in cash to pay down their ballooning debt. I estimate that this will mean a loss of about 4000 jobs [out of currently 40,000]. I said in my Video Game Review dated September 19 that Movie Gallery was betting on Halo 3 to save their bacon and they spent a fair amount of money on midnight parties and such like at their Game Crazy and Hollywood stores. I do not think that this worked out the way they hoped. As far as I can tell, they still keep two headquarters going - one for Movie Gallery in Alabama and the other for Hollywood Stores in Oregon- so if they want to save some money, this would probably be a good place to cut costs as well. Will it stave off bankruptcy? My sources within the industry are betting 8 out of 10 that no, it will not. They see this as a death spiral - less stores, less business, cut more stores, lose more business.
 
09/27/2007
Activision is continuing to move towards a position where they can successfully challenge Electronic Arts for leadership in the video game software space by entering the racing scene which represents more than 10% of the video game market. They just now bought Bizarre Creations, the developers of the Project Gotham Racing range, a contender in racing-oriented video games - a segment estimated to be worth US$1.5 billion and today dominated by Need for Speed [EA], Grand Turismo [Sony], Forza [Microsoft] and Midnight Club [Take Two]. This acquisition occurs just in time to take advantage of the release of Project Gotham Racing 4 for XBox360 via Microsoft on October 2 in the US and October 12 in Europe.
 
This acquisition by ATVI  is very much in character with last year's acquisition of Red Octane, the developers of the Guitar Hero franchise, enabling them to grab the lead in the very lucrative musical band segment of the video game market. In this they are now being challenged by Electronic Arts who made a deal with Harmonix and are going to enter their Rock Band against Guitar Hero 3 this Fall.