Sunday, October 31, 2010

Village Halloween Parade

   Sometimes I wonder if I'll ever see someone I recognize at the annual Village Halloween Parade but I never do. The disguises and costumes are too well-done and elaborate to pierce their intended veils. I'm headed down there later today with a girl I've been dating. Well, it's more of a physical thing than anything else but for the sake of her parents, we're dating and she's my sweetheart.

   Later today at 7PM, the 38th Annual Village Halloween Parade starts on the corner of Broome Street and 6th Avenue. The revelers will wind their way up to 16th Street where everyone mills around for a few moments before dispersing into private parties, gatherings, and dinner. We're going to dinner at a diner we always go to because they welcome costumed-freaks. Can you imagine going to Balthazar or Daniel dressed up as Spiderman or Black Widow? Well, maybe you can.

Saturday, October 30, 2010

Keiji Inafune deserts Capcom

   The man responsible for designing Rockman and giving him that natty blue suit is leaving Capcom, effective immediately. Keiji's been at Capcom for 23 years where he oversaw the production of the Rockman series of games and most recently, Dead Rising 2.

   Keiji was promoted to the title of "Global Head of Production" in April 2010 where he managed underlings and gave them direction. He was living the life of a corporate manager but apparently, that's not the kind of job that a designer necessarily desires. Based on some of his comments, it's my opinion that working in a huge corporation like Capcom is rife with politics and internal strife that can wear a manager down. His comments about the lack of innovation in Japanese game design may have also played a part in Keiji's departure.

   That's why I want to work in small and nimble firms where the hours are flexible and the workers have independence and autonomy (for the most part). A large corporation moves slowly and deliberately since there are multiple layers between upper management and the working stiffs. When there are that many layers, elements of mediocrity like politics, backstabbing, ass kissing, nepotism, and all that other crap gets shoveled into the mix.

Halloween Costume "Oooootiinniiii"

Friday, October 29, 2010

Take Two Rallies on Acquisition Speculation

   Shares of Take-Two rose 4.71% today to $10.67 on speculation that the company could be a takeover target. How did traders get the idea that TTWO was in play? The company announced earlier this morning that CEO Ben Feder would be leaving his position at the end of the year. Sounds like a bunch of hokum. Back in 2008, EA attempted to take out Take-Two at $25.74 per share which valued the company at about $2 billion. As of today's close, TTWO's market cap is $906 million. At the lows of March 2009, TTWO was worth about $450 million. Amazing how the value of companies can bob like a jetty in rough surf in the space of 2 short years. 

   I don't put much stock in the takeover talk. Trigger-happy traders jump on a lot of shit which usually doesn't pan out. EA's market cap is about $5.5 billion so if they were to make a play for TTWO again, they'd probably have a pay at least a 30% premium to TTWO's closing price for today. That's $1.2 billion and in my opinion, unlikely to pass. Who else could make a run for TTWO? Activision is one possibility and maybe Ubisoft - I'm bearish on Ubisoft so an acquisition announcement would be good fodder for the way I'm thinking on UBI since they'll get smashed.

Thursday, October 28, 2010

One of those WTF moments

   Don't think she'll be getting the Mother of the Year award this year. Maybe next year. 

Jacksonville mom who shook baby for interrupting computer game pleads to murder
   A Jacksonville mother charged with shaking her baby to death has pleaded guilty to second-degree murder. Alexandra V. Tobias, 22, was arrested after the January death of 3-month-old Dylan Lee Edmondson. She told investigators she became angry because the baby was crying while she was playing a computer game called Farmville on the Facebook social-networking website.
   Tobias entered her plea Wednesday before Circuit Judge Adrian G. Soud. A second-degree murder charge is punishable by up to life in prison. Prosecutor Richard Mantei said Tobias' sentence could be less because of state guidelines that call for 25 to 50 years. Soud offered no promises on what he'll order during a sentencing hearing scheduled for December.

   Outside the courtroom, Mantei said Tobias' plea will help avoid the family reliving the tragedy during a jury trial. Tobias told investigators that she shook the baby, smoked a cigarette to compose herself and then shook him again. She said the baby may have hit his head during the shaking.

Nintendo posts first loss for seven years

   Nintendo announced earnings today and posted a loss of JPY2 billion (US$24,616,899) for the six month period ending September 2010. As a comparison, Nintendo posted a profit of JPY69.5 billion (US$855,437,257) in the same period last year.

   So, is this the end of Nintendo like some writers are probably going to state as absolute fact? Y'know, just like someone declared Microsoft a dying consumer brand yesterday? Nah man. It's just the natural cycle of the video game industry. The Wii peaked last year and the Nintendo DS is getting old. Both gaming machines are mature now and they only have a few more years left in their respective life-cycles before the next generation is introduced.

   One analyst had this to say, which revealed his ignorance about the gaming industry which he covers:
“It’s been harder than people realized for Nintendo to make the transition between the DS and the 3DS,” said Jay Defibaugh, a games analyst at MF Global FXA Securities Ltd. in Tokyo. The 3DS is cannibalizing sales of its predecessor, Defibaugh said.

   You mean the 3DS which hasn't been released yet and won't be released until next year in Japan? That 3DS? The word "cannibalizing" is an active verb which insinuates that the 3DS is an available product that is already eating into sales of the earlier DS models. Where do they get these guys? From the same Businessweek article - Yoshihiro Mori of Nintendo sets the record straight:

“I don’t think the announcement of the 3DS had much effect on second-quarter earnings,” Nintendo’s senior managing director Yoshihiro Mori said in a briefing in Osaka today. “We decided not to release the 3DS this year because we didn’t have enough.”

   What he said and the fact that the games probably aren't ready for public consumption yet are why the 3DS won't be released until February 25, 2011 in Japan and a month later in North America and Europe.

Wednesday, October 27, 2010

Microsoft is a dying consumer brand - CNN

   A new article by a writer named David Goldman on CNN states unequivocally that "Microsoft is a dying consumer brand." That's a statement. Not a question or a theoretical postulation. David Goldman knows for a fact that "Microsoft is a dying consumer brand."

   YAWN. Microsoft will be here in the next 100 years and they'll be like Con Edison or General Electric. Once a corporation grows to become a behemoth such as Microsoft, it's very, very difficult to kill. I've read articles about the demise of Apple (yes, really, fanboys), the death of IBM, the end of "_______" over the years and none of those have come to pass. How can Microsoft be a dying consumer brand when their software is on the majority of PCs running on the planet? PCs. You know, PERSONAL COMPUTERS which are used by PERSONS. Is the future really mobile devices and only mobile devices? Doubtful. The PC is here to stay just like dishwashers and toasters. Some things are just ingrained into the civilized human experience on this planet.

   Apple reinvented itself in the past few years and Microsoft will reinvent itself when the need arises. They're still making billions from continuing operations so the urgency for change probably won't come for at least another decade or so. In closing, the death knell of MSFT won't be rung for at least another century. At least.

Tuesday, October 26, 2010

Zynga Valued Higher than Electronic Arts

Mark Pincus, CEO of Zynga
   The maker of Farmville is currently valued higher than Electronic Arts based on trading in privately held shares of Zynga on Sharepost. The difference in market capitalization is approximately $300 million as of of today.

   According to a Bloomberg article today:
   Started by Mark Pincus almost four years ago, Zynga has become one of the fastest-growing technology companies by using Facebook Inc.’s social network to distribute games. It makes money by selling virtual goods, such as vehicles and weapons that help players advance in games. The company has grabbed about a third of that market, which is worth $1.6 billion this year, according to Inside Network in Palo Alto, California.

So, figure Zynga's revenue for this year is about $530 million and they'll probably net about $100 million in earnings. As a comparison, EA earned $98 million in the quarter ending June 2010 and they're on track to bring in nearly $4 billion in revenue for the entirety of 2010. Zynga's growth prospects allow traders on Sharepost to price the shares at bubble valuations but there are risks to Zynga's trajectory - namely, it's reliance on Farmville, Facebook, and competitors are on the prowl.


Apple to acquire Netflix, Sony... and the World?!

   Apple is sitting on a cash hoard of over $50 billion dollars. That's about $5 after being converted into yen. Anywho, stories have been released lately speculating that Apple's going to be using some of that cash to make a major acquisition. This morning, the name "Sony" was mentioned and then "Netflix." What's next? IBM? Microsoft? Whirlpool? Yep, Whirlpool, the company that makes dishwashers. "That's Silly with a capital "S"," you say but no sillier than the guys who think that Apple's going to be making a play for (of all things) Sony. The Netflix possibility is a joke which I won't even consider.

   Okay, back to Sony. There is no way Apple will ever target Sony for acquisition. Apple has a corporate culture that is sort of like an closed enclave of likeminded warriors. Jobs is the messianic leader of these warriors and to attempt to integrate Sony's culture with Apple's culture is unthinkable. Repeat: unthinkable. It ain't gonna happen so I won't think about it any more. The fools who are spending time thinking about it are wasting their time. That's all. 

Monday, October 25, 2010

"This Stock Boom Is Nuts, But You Can't Fight The Tape" -- Saluzzi

From this morning's Tech Ticker
   The stock market is still on a tear, with the Dow up almost 15% from its low earlier this summer. As ever, all the way up, the market has climbed a "wall of worry," with an army of analysts saying the boom isn't based on economic fundamentals.
And it still isn't, says Joe Saluzzi, co-head of the trading desk at Themis Trading.
Saluzzi sees nothing in the current economic data that would justify such a run.

   Of course you can't see it Saluzzi, you're just a patzer who takes his cues from everyone else. Me? I'm an independent thinker who attempts to rise above the noise and peer down the road when everyone else is looking down at their feet. I look ahead to see what trends are in motion and the only conclusion is we're in a bull market. A powerful bull market that will take amateurs like Saluzzi by surprise. The bull market is a harbinger of the new economic boom that's I'm staring directly at. I've told this to friends and family. No one believes me. They look at what's going on in the country, the foreclosures, the bankruptcies, and the ascension of  China and point to the decline of America. In other words, they're looking down at their feet instead of projecting forward in time to a brighter day.

   I scoff at all of the doom and gloom because blue skies are ahead. I've said it before and I'll say it again, "Bluer than the bluest eyes." 

Finally, a good advertisement from Microsoft

I mocked the "I'm a PC" ads from Microsoft. They were unoriginal, featured weird folks, and played off the Apple "I'm a Mac" ads. The Apple ads were clean, crisp, and simple with a direct message. The "I'm a PC" ads were dumb. Just dumb. Yeah, you're a fackin' PC. Whoop-de-doo. I like this one however. Watch it:

Saturday, October 23, 2010

Crossing the Street in Mumbai, India

   The video pasted below was taken three years ago but it's one of those that I watch every now and then to remind myself that people and traffic can coexist. Watch it and be intrigued that no accidents or maimings occurred in the half-minute that the video runs. The location where the footage was shot is above Sion Station near Dharavi which is affectionately called "The largest slum in Asia." The Mumbai video gives me an idea for an online multi-player Frogger game where participants all attempt to cross the street in the fastest time. If anyone steals my idea, I better get royalties and credit.

Friday, October 22, 2010

Principal Dumbass

   The story about the school principal named Andrew Buck who helms the Middle School for Art and Philosophy that's making the rounds today is entertaining. Yeah, I know it's demonstrative of the sad state of affairs that is the public school system but sometimes you just have to laugh at these things. A page containing snippets from the principal's memo titled, "Principal's Reflection" is linked below on Googledocs in all of its literary tragedy:

Principal's Letter (PDF File)

   When I get the full text of the email, I'll paste it here since this guy's probably a comedic genius... albeit unintentionally.

Pac-Man Grapefruit Photo

   When I was younger and learning about trading, money management, writing, and gaming from mentors, friends, and investors, I was also an artist. No, really, I was. I took a few art courses and convinced a few models to sit still for me for over 2 hours while I doodled their likenesses onto parchment.

   I was good but I never enjoyed 2D art. It was too one-dimensional. I tried sculpting figures in college but was never good at it so I gave that up. I do have appreciation for artists who are able to create works out of clay, stone, and in the case of today's Pac-Man photo, grapefruit.

   Pac-Man Grapefruit looks good and even has a weird tongue that protrudes outwards. Yes, I'm aware that Pac-Man in the original game didn't have a tongue but with all that fleshy pink grapefruit, the artist probably couldn't resist giving Pac a thick tongue.

Thursday, October 21, 2010

Yep, Apple Killed The CD Today

^^ Another dumb article alert, this time courtesy of TechCrunch. And I quote:

"Stop. Take a deep breath. Before my headline gets you all worked up, consider what I’m saying here. The CD and other optical discs, like DVDs and Blu-rays, are obviously going to live on for a while as a way to transport media. But make no mistake that today, with two unveilings, Apple has effectively sealed the fate of the optical disc in the computer industry. Soon, it will go the way of the floppy disk."

   What the writer is referring to is the unveiling today of the Mac App Store and Apple's decision to include a slim USB drive which contains the reinstallation files for the MacBook Air. Yep, these two moves by Apple has allowed the writer "MG Siegler" to declare that Apple has rung the death knell of the optical disc and pounded the nail into the coffin to boot

   Is it me or do these Apple fanboys attribute every major trend in the modern world to Apple? According to the fanboys, Jobs walks on water and human civilization wouldn't be where it is today if Apple had never been born out of that little garage in Los Altos. I love my iPhone and iPad but c'mon now with the vapid adulation. Firstly, the move to online software distribution has been going on since the first dot-com boom when Digital River was in my portfolio. Secondly, I guess the writer has never heard of Valve or Steam. No, MG Siegler, Apple didn't cause the revolution... they're just caught up in this big wave called evolution and are a part of it. Feh.

Glee Photos Bordering on "Pedophila?" WTF?

   Glee cast members Lea Michele, Dianna Agron, and Cory Monteith are featured in a photo spread in the November 2010 issue of GQ magazine which has erupted into controversy.

   The Parents Television Council issued the following statement regarding the photos:

"It is disturbing that GQ, which is explicitly written for adult men, is sexualizing the actresses who play high school-aged characters on Glee in this way," PTC President Tim Winter said. "It borders on pedophilia. Sadly, this is just the latest example of the overt sexualization of young girls in entertainment."

   He says that the photos, "borders on pedophilia." Tim Winters of the Parents Television Council needs to be educated on what pedophilia is before making any more stupid statements. By releasing a statement like that, Tim Winter trivializes pedophilia and one has to question his perception of the world, his motives, and what his intentions are. What the fack is going on in Tim's brain to bring up pedophilia when talking about models who are clearly adults?

EA buys Chillingo for under $20 million

From the LA Times today:
   Electronic Arts has snapped up Chillingo, a U.K. publisher of Angry Birds and other iPhone and iPad games, for less than $20 million in cash, according to sources close to the deal. Holly Rockwood, EA's spokesperson, confirmed the purchase Wednesday morning, but would not comment on the acquisition amount.

   Chillingo is an aggregator and a distributor of mobile games based in the United Kingdom. Continuing from the LA Times article: 

   Its two top titles, Cut the Rope and Angry Birds, occupy the No. 1 and 3 spots on the chart of top paid apps in iTunes Wednesday morning. Cut the Rope, developed by ZeptoLab, sold 1 million paid downloads within the first 10 days of release on Oct. 7. Neither Rovio, which developed Angry Birds, nor ZeptoLab is part of EA's acquisition.

   I think the deal is a "Meh" kind of buy. I like that EA's buying into new areas of strength in the gaming industry but as I've mentioned before, console gaming will always be where the big money and revenue is. All Things D had pegged the Chillingo buy at $80-$200 million which was optimistic but ~$20 million sounds about right for a morsel to be absorbed into the EA juggernaut. I also think EA should buy into online gaming distribution and that's Valve which operates Steam.

   In related news, I've completed my buys into EA earlier this morning - a total of 5000 shares which will be held in the account for the next 5 years. I might write out-of-the-money calls against the position about 3 times a year to earn income but those shares won't be sold until 2015-2016 depending on how I view the overall market at that time. I'm concentrating on my Amazon position from here on out.

Wednesday, October 20, 2010

Chatuchak Weekend Market Thai Iced Tea, Bangkok HD

Dude has mastered the principles of physics and centrifugal force... and he works in a tea stall.

UFO sighting in Richmond, Virginia - From Oct 17, 2010

How To Build A Poor Man's Hedge Fund - CNBC

   To me, the market is a big game. It's the biggest MMORPG in the world where traders, investors, and scammers ply their trade in a daily battle of wits, wealth, and occasional treachery. Hedge funds used to be the gunslinging cowboys in the game but a lot of them were destroyed in the volatility of 2008-2009. Since many were destroyed, I found this opening paragraph from this morning's CNBC article odd:

"Ultimately unscathed and relatively unregulated in the post-crisis world of financial markets, the hedge fund space remains enormous in scope, risky in appetite and exclusive by design."

   Unscathed? Are memories really this short at CNBC? Need proof of hedge fund deaths in 2008? Here:

   Hedge Fund Research, a Chicago-based information company, said the number of hedge funds liquidated in the third quarter rose to 344, which is more than three times the 105 liquidations in the third quarter of 2007. It's also 77 more than the previous record of 267 liquidations in the fourth quarter of 2006.
   The data also showed that 693 hedge funds were closed in the first nine months of the year versus 409 in the same period last year. That's an increase of 70% and represents nearly 7% of all hedge funds, according to HFR.

   And that's only 2008. The rest of today's CNBC article titled "How To Build A Poor Man's Hedge Fund" talks about using ETFs to implement long-short strategies, commodities trading, currency trading, and other nonsense that no average JOE is going to be able to manage. If an average JOE was going to trade the ETFs mentioned in the article, I can confidently predict that JOE would have lost his ass within a year of attempting to build his poor man's hedge fund.

   My advice? Keep it simple, stupid. We're still in the early throes of a bull market. When immersed in a bull market, there is only one thing to do - buy. You heard me? BUY and sit on those shares for years. It won't be time to sell for another few years but when that time comes, I'll be here to tell you when to sell.  

Tuesday, October 19, 2010

Medal of Honor sells 1.5 million copies in under 1 week

   Remember the mediocre reviews granted to Medal of Honor last week which caused EA shares to sell off? Despite those mediocre reviews, EA nevertheless presold and sold 1.5 million copies of the game globally in under a week. Maybe no one reads reviews but the "mediocrity" of the game has apparently not caused a sales slump as so-called investors had feared. With the holiday season dead ahead, I'd estimate that EA will sell another 250,000-500,000 copies of the game before the end of the year. If the latter number is hit, EA would have booked roughly $100 million in revenue on the game - not bad.

   EA shares continue to sell off on the back of market weakness but I've been adding shares. I've decided to increase my position to a total of 5000 shares which I'll sit on like a rooster for the next 5 years. My position is currently at 4600 shares so I have another 400 to buy before I lock EA up and then concentrate on my Amazon position. 

An example of a poorly spun article

   Article spinning is the "art" of using a program to make 10-20 different versions of one article with which to spam the network of article databases and websites around the world. I normally don't find humor in spun articles but this one had me chuckling although I didn't reach the point of guffawing. The article was submitted to one of our article websites a few minutes ago.

The title of the article is as follows:

How To Correct Xbox 360 System Three-hundred-and-sixty Difficulties – Xbox 360 Ring Of Dying Fix

   In this article, the notorious "Red Ring of Death" has been re-christened, "Ring of Dying" which sounds kinda cool. I was dumb enough to continue reading and viewed the following words of wisdom:

Is your three hundred sixty obtaining video concerns or generating unusual noises?
Require an Xbox Ring of Death Resolve?
Xbox 360 problems usually are knowledgeable by as quite a few as 30- 50% of Xbox 360 users. What can you do? What precisely are your alternatives?

   The program that spun this article talks to me like Alan Greenspan or maybe Yoda from the Star Wars movies. I couldn't be bothered to read the rest of the article but you're welcome to try deciphering it by clicking the title of this post which'll bring you to the offending article.

EA Sports Active 2

Is this the Jane Fonda Workout for the new generation?

The Biggest Video Game Publisher You've Never Heard of

   ^^ That's a headline from CNBC late yesterday afternoon. When I read it, I thought to myself, "Damn, CNBC finally has an exclusive scoop on something?" I looked at the article and found out they were talking about Zenimax Media who owns Bethesda. CNBC fails again with dumb headlines. I've been playing Bethesda games since they were publishing on the Commodore 64 and Amiga computers. From the article:|headline|quote|text|&par=yahoo
"The company’s board of directors, meanwhile, is a who’s who of media and entertainment executives—including CBS [CBS  17.49    -0.05  (-0.29%)   ] president and CEO Les Moonves, director Jerry Bruckheimer and baseball legend Cal Ripken Jr."

These are old dudes who don't have a clue about video games but they're on the board of directors? Well, that's pretty much par for the course on most corporate boards. The rest of the article reads like a paid pump-piece designed to pave the wave for an eventual ZeniMax IPO in the next couple of years. These articles prime the investing public to be on the lookout for a company and are designed to build interest. If the ZeniMax IPO is on course, expect to see a lot more articles like this one in the next few months. 

Monday, October 18, 2010

World of Warcraft Cataclysm Cinematic Trailer

Gran Turismo 5 Delayed

   Sony has delayed Gran Turismo 5 from November 3, 2010 to an ambiguous frame of "Holiday Season." I'm not going to bitch and moan because I would rather wait a few more weeks for a perfect game than a buggy and glitchy program that disappoints everyone.

   Sony and Kazunori Yamauchi are taking the right tack and making sure that the game is 100% or at least 98% before pressing the discs and shrinkwrapping the packaging. How about the perspective from the viewpoint of a retailer? Well, it's the same - we'd rather have a 100% product than deal with the ramifications of a potentially faulty game that bubbles up vitriol from the userbase. We just want everyone to be happy, play games, and enjoy their time with each game that they've invested in. Simple.

Friday, October 15, 2010

Yeah, Right...

Video Game Sounds and Music Excite Birds

   My company has three parakeets, a canary, and five lovebirds in the rec room where we play new video games every week when new arrivals are delivered. Since the birds are within listening range of what goes on in the rec room, they start singing, chirping, and screeching whenever they hear the music or sound effects from the games that we play.

   It's sorta funny because they'll normally be quiet and eat birdseed but once the music from a game like Castlevania Lords of Shadow or Medal of Honor plays, the canary will start singing and then the parakeets and lovebirds join in with their chirps and squawks. The canary can sing beautifully but the other birds can't hold a tune at all. They'll try their best to mimic the canary but they're limited to short shrieks and chirps rather than anything mellifluous. If you close your eyes and listen to the birds in our rec room, you might imagine yourself to be in a jungle off the western coast of Africa.

Thursday, October 14, 2010

'Halo: Reach' Not Enough to Lift Falling Game Sales

   You know what's wrong with the world? People are too short-sighted and can't be bothered to look at the big picture. Even worse, people who are in the position to look at the big picture can't even comprehend what's going on in the world. It is my belief that this is why the human condition is shoddy - the masses are short-sighted but this should not be held against them. They are, after all, just trying to make a living, raise their kids, and keep food on the table. The lay cannot be expected to comprehend the big picture.

   However, one would expect that people who are paid to write, prognosticate, and offer their views on the world, the market, the economy, or whatever they're paid to write about would have a good overview on the subject they're writing about. This isn't the case in the following CNBC article:
'Halo: Reach' Not Enough to Lift Falling Game Sales By: Chris Morris
   Software sales at retail stores were down a shocking 6 percent last month to $614 million, according to The NPD Group. That’s vastly worse than analysts were expecting and could scare investors, who were holding out hope that September would be a bright spot in an otherwise dismal year for game sales.

   Really? Is 6% really shocking? If you're seriously shocked, I have to color you an amateur hack. This sentence is most vexing however:

"That’s vastly worse than analysts were expecting and could scare investors, who were holding out hope that September would be a bright spot in an otherwise dismal year for game sales."

   When I use the words, "vastly worse," I better be talking about a 50% haircut. That's vast. When referencing a 6% drop, I'd use the following two words, "mildly worse." Learn from me. The writer also mentions "scared investors" but my contention is that any investor who bails on the whiff of a 6% miss isn't an investor. He's a day trader scalping a few cents every day in the hopes of coming out ahead. Hope shouldn't be part of any trading strategy anyway. An investor buys into a company because its prospects have potential and a real investor would be adding to his position on weakness, not selling.

   I have confidence in the future of the gaming industry. It's not going away and I'm buying on weakness. The day traders can jump around and get knocked out by the volatility but there's a bull market in progress that is going to take everyone (even me) by surprise. I have my index targets for the next 5 years which I won't publish but they're much, much higher than they are now.

Babysitting Mama headed to Wii

   I don't have a Baby Mama yet because I'm not ready to be a pappy and I have a lot more lovin' to do. However, Wii owners will get to become Babysitting Mamas in December when the game is released in Japan. A baby plush is included with the game which gamers are supposed to insert the Wii Remote into - yes it sounds weird but it's part of the simulation portion of game.

   In Babysitting Mama, the baby plush is cradled and "fed" like a real baby. The publisher touts a total of 40 different activities that may be played to demonstrate baby interaction and nurturing. I'm not sure how well this thing is going to sell but it looks sorta dumb. Soon-to-be-mothers are one target demographic but I doubt teens girls are going to be into a game where the objective is taking care of a baby. Male gamers will avoid it like the plague. Who's left? Grandma gamers?

UFOs in NYC - Another video from yesterday's brouhaha

Retailers Play Harder on Secondhand Sales

   Jill Krasny has written an article for the which looks into the secondhand video game market. It's a reasonably well-thought-out piece which touches on the used video game market, the drive towards online distribution, and how publishers are coping with extracting revenue from games after the initial sale. I found this quote from Ben Noel odd:

Ben Noel, executive director of the Florida Interactive Entertainment Academy at the University of Central Florida, worked as a vice president at Electronic Arts(ERTS) in the late 90s and early 2000s, a time "video games were just becoming a real market," he says. "There was legislation that worked in the favor of the 'Blockbusters' of the world for leasing products, and then the aftermarket became an issue for the publishers, starting about 10 or 15 years ago," Noel says. "It was tough to negotiate with those specialty stores, but obviously publishers would like to have value in their property that gets resold."

I guess Ben isn't aware of the billions that Atari and Nintendo made in the 80s and that wasn't a "real market." Nintendo became the juggernaut of the video game industry in the 80s but according to Ben, they didn't do it in a real market. Thanks Ben for your wisdom and I guess if you didn't live through it, it didn't happen.  

Yahoo deal being orchestrated?

Yahoo shares are higher today after some fluff was bandied around about AOL and private equity firms buying out Yahoo. Whenever I hear rumors like this during the week of options expiry, I wonder who's benefiting from the juice that Yahoo shares are enjoying this week. Is it a PE firm who bought calls on Tuesday? Is it a touter who's trying to get out of a losing position in YHOO with as little pain as possible? WHO?

My guess would be multiple culprits who have a vested interest in seeing YHOO shares going higher this week. Once the juice is off, the shares will settle down again near 52-week lows. That's the way Wall Street works folks. Selling into rumor-driven strength (and buying on rumor-induced weakness) are old tricks that have been used since the days when Larry Livermore was making his bones as the Boy Plunger.

Wednesday, October 13, 2010

They're Here...

UFOs over New York City

Electronic Arts Artist Dishes on Why Warhammer Failed

   An Electronic Arts employee dubbed "EALouse" who's drubbing EA management has posted an online rant for your reading pleasure. The link to the Wordpress blog hosting EALouse is pasted below at the bottom of this post. As of 10:15AM, there's 269 comments following the original posting:
Hi everyone,
I would think myself to be part of some noble cause, like the original EA Spouse trying to save her husband from a hellish work environment at EA. That had a happy ending, however, with tons of publicity and a total change of overtime wages and salaries and how they are handled within the company. I do not expect a happy ending, so I’ll be personal and selfish, and this is just for me.
So just call me EA Louse.

I found out recently that I will be dismissed from Bioware Mythic during the next round of layoffs EA coming this November. I’m sick of seeing EA outsource their art and find every excuse to get rid of us and still not achieve anything. Mythic is dying, and its not us who killed him but we’re taking the fall.
But if you want to know what really went down with Warhammer, I’ll tell you right now.

First, the project leaders did not know what they were doing. Jeff Hickman was the saddest excuse for a producer I’ve seen. All he did was drink the Koolaid and suck up to the right people. He was the perfect yes-man, and this reached down to almost all managers.

My boss who will not be named, again and again would tell us that Rob Denton, one of the original owners, said we should “do this” and “do that” and we would say “omg it makes NO sense, please explain A, B, and C to him. “And then he’d come back and tell us, after we thought he had gone to talk with him,” No, Rob wants in this way. Jeff agrees, this is what we’re going to do. Understood? ” They never actually talked back to Rob. We didn’t talk back to them.

Rob said jump, our leaders said, “How high?! And on who?”

So we shut up and did what we were told, by people too afraid to tackle real problems. It is a culture of fear, especially since Mark Jacobs was fired.

Oh, he left voluntarily you say? No, he was fired, and everything placed on his shoulders by those closest to him so they could divide his salary and annual bonus. I bet Rob is enjoying that sweet new Maserati he bought after leaving the knife in his partner of 15 years.
Want to know more? Keep reading. I can keep ranting.

Rob was never there during the development of Warhammer. We always joked about when his next weekly holiday was coming. (Answer? Next week!) Mark was not available, was way too head down trying to design his own contributions or whatever. Rob always handled things. We were told NOT to speak with Mark in person, never, or else we would be explaining to Rob.

The coup began long before Warhammer, and Jacobs did not even realize it.

And yet, this is common gossip in the company, and nobody in this industry seems to get it. So get it! Rob was responsible for the entire project, then blamed Mark when things went wrong.

Ah, but could not do it alone. No, he needed Jeff Hickman, promoted from customer service to produce the Warhammer project. Wait, let me let you have that sink in. The man running customer service, on the theory that the management of a large team of CSRs qualified him to run a game development project, was put in charge of a $50 million project with no previous experience.

And he needed Eugene Evans, the man who brought you the almost non-existent marketing campaign behind Warhammer. We could not even believe how bad they fucked up the marketing campaign. There was almost none. We slaved for years, and this is how we were rewarded for it by Eugene and the people of EA? Being told that Warhammer was not “worth” a lot of money spent on it? LOL. Now he’s in charge of Bioware Mythic.

Oh yeah, and he needed Paul Barnett. You know him as the crazy British dude that appears in random videos at EA to promote his latest bullshittery. We know him as the crazy British dude who we have no idea of how he still has a job. This man was supposed to be the savior of Warhammer’s vision and design. Now all he can do is promote his strange ideas about his little secret project web Ultima game that’s been almost universally criticized by all of us and focus groups. What’s that? You didn”t know Paul loves one of those old Ultima games sooooo much he’s making a literal copy of it for Facebook? Well, the cats outta the bag. Too bad it sucks ass.

So what do they all have in common? All of them failed, badly, in Warhammer, and each of them is in a position of authority in the new company, while the rest of us are facing pink slips. How do they sleep at night? They spin aruond, blame everything on Mark, divide his old salary between them, and never speak about it again. Oh, and they fuck us little guys as well.

Almost makes me congratulate them for having the balls, but after watching them work, it’s obvious they don’t have any. They’re cowards running scared trying to hide under the wing of Bioware, now that Rob has become a general manager of EA.

And Bioware? Don’t make me laugh. They’ve spent more money making the Old Republic than James Cameron spent on Avatar. Shit you not. More than $ 300 million! Can you believe that?

And you know what they’re most proud of? This is the kicker. They are most proud of the sound. No seriously. Something like a 20Gig installation, and most of it is voiceover work. That’s the best they have. The rest of the game is a joke. EA knows it and so does George Lucas,they’re panicking , and so most of Mythic has already been cannibalized to work in Austin on it because they can’t keep pushing back launch.

Old Republic will be one of the greatest failures in the history of MMOs from EA. Probably at the level of the Sims Online. We all know it too ……

Anyway, back to Warhammer. We shouldn’t have released when we did, everyone knows it. The game wasn’t done, but EA gave us a deadline and threatened the leaders of Mythic with pink slips. We slipped so many times, it had to go out.

We sold more than a million boxes, and only had 300k subs a month later. Going down every since. It’s “stable” now, but guess what? Even Dark Age and Ultima have more subs than we have. How great is that? Games almost a decade make more money than our biggest project.
So there it is. Rewarding the incompetent. Firing the competent.
I say it anonymously so I can keep my next few paychecks coming.
So I’m a louse. A big fat EA louse.
Want some more questions answered? Ask away.

[EALouse @ WordPress

Tuesday, October 12, 2010

EA shares drop 5.95% on Medal of Honor Reviews

   I completed my buying of Electronic Arts shares today on the drop this afternoon. I am now sitting on 4,000 shares that I've purchased in increments over the course of the past 8 months. When I saw the shares under pressure today from what I consider BS news about "mediocre" early reviews, I had to take the opportunity and buy. EA could continue to drop in the next few days but I'm comfortable in the position and I may add 1,000 more shares if I can get them at $16.

   The next position I'm considering is AMZN. I already own shares in my core brokerage account but I'm thinking of buying trading shares because it's breaking out nicely. I tend to buy a stock when it goes higher and then add to the position as the shares continue higher. My target on AMZN is $200 for the first level but I could see it running all the way up to $300. Amazon's market cap stands at $70 billion but I think it's a $140 billion dollar company in the next 5 years. What happens after it hits $300? It'll probably crash all the way down to the single digits like it did during the 2000-2001 dot-com crash. I never fall in love with a stock but I see the potential appreciation in EA and AMZN's share price over the next 60 months. Polls Japanese on Nintendo 3DS Price

   Japanese website has released the results of a poll which seems to indicate that 79.7% of those participating think the Nintendo 3DS is expensive. The sampling size was ~1000 people and the results were as follows:

* Slightly Expensive: 32.2 percent (323 replies)
Expensive: 28.3 percent (284 replies)
* Too Expensive: 19.2 percent (192 replies)
Reasonable: 16.4 percent (164 replies)
* Slightly Inexpensive: 2 percent (20 replies)
* Inexpensive: 0.9 percent (9 replies)

   While polls like this are somewhat interesting to read about, they mean nothing. When the Nintendo 3DS is released next February, the Japanese will queue up for it like they did for the Playstation 3, the Nintendo Wii, the Playstation 2, and other gaming consoles. They even lined up for the Dreamcast back in the day. Nintendo will weave their magic and limit supplies of the 3DS so that they're assured of quick sellouts, lots of hype, and rabid devotion amongst the NDS fanbase.

DeNA acquires Ngmoco for $403 million

   On the heels of its acquisition of Gameview Studios (Tapfish developer) and investment in Astro Ape Studios (Office Heroes), Japanese social game developer DeNA has announced it's plans to acquire Ngmoco. All three companies that DeNA has commingled with in the past month are mobile game developers. In Ngmoco's case, they're an iPhone game developer whose offerings include "We Farm," "We Rule," and "We City."

   If you read some of the news articles covering the acquisition, the writers tout the rise of the social gaming industry and infer that the console gaming industry is on the decline. These writers seem to ape each others thoughts and sentiments because they don't really have any reasonable insight in the gaming industry.

   Here's the skinny: Free and low-cost mobile games are on the rise because the amount of mobile devices are on the rise and usage is increasing with the popularity of the iPhone and Android devices. Eventually, sales of the iPhone and Android phones will plateau and you know what these industry writers will type at that point? They'll announce the decline of mobile games. Should the economy improve at that time and console games at $60/pop begin selling like gangbusters again, these writers will tout the "Great Revival of the Console Games Industry." Yeah, they really are that simple.

Monday, October 11, 2010

Massive Shutdown

   I remember when Microsoft bought Massive back in 2006 and back then, I thought it was a smart deal. Google was ruling with its little text ads and advertising was on Microsoft's mind. Even if Microsoft couldn't catch Google in the online ads arena, they'd try their hand at inserting ads into videogames. Microsoft paid what appears to be $200+ million on Massive but in the four years since the acquisition, Massive's game ads have gone nowhere. EA brought in-game advertising in-house and Xbox Live took off. These two occurrences basically doomed Massive into obscurity.

   According to Mike Shields' article in MediaWeek from last week, Microsoft has shopped Massive around "seeking a high six-figure or low seven-figure deal" but no one appears to have bitten. I believe that Massive could have been big if they never sold out to Microsoft. I've seen time and again how companies with great potential that are acquired and folded into a huge corporation lose focus, lose momentum, and eventually lose everything. Add another notch to the gunbelt.

Sunday, October 10, 2010

Article Directory Business

   The company I work for owns an article directory that's fairly popular. I don't administer the site but I do visit it occasionally to see what article spinners and promotional writers are doing to get traffic to their sites. Earlier this morning, I saw an article promoting Playstation 3 backups. There was no mention of the PS Groove, the Jailbreak, or any device and the writer was just trying to sell software that allowed game console owners to backup their games.

   The article directory business isn't particularly lucrative but the company I work for wanted a directory as one part of the business that we're building. We've purchased some other directories but Divine Writers is probably the biggest one that we own right now which gets about 1000 new article submissions every day including weekends. When I was browsing through the new submissions, I noticed one writer had spun 8 different articles about hemorrhoids and submitted them one after the other. I'm not going to begrudge a writer trying to make a living but c'mon now. My advice would be to split the submission of the hemorrhoids articles into one submission a day over the course of a week to spread them out. After the articles were submitted, a few hundred articles came in afterwards and knocked all of them off the front page.

Saturday, October 9, 2010

Electronics Arts shares look attractive

   I sold my EA shares a few years ago but I've been buying them back again between $16 and $18. EA closed at $17.65 on Friday and I think they're a buy all the way up to $19. The strategy that I use to purchase shares in a position is as follows:

1) I determine an amount of shares that I want to own. In EA's case, my target quantity is 4000 shares.
2) When price reaches a level where I gauge the risk/reward proposition to be attractive, I enter a limit buy for 200-500 shares in each trade. For example, I started the position earlier this year by buying 200 shares at $17.
3) I bought shares all the way down to $16 but stopped when EA dropped to the $14-$15 area. Yes, I was feeling queasy when I saw prints that I didn't expect.
4) When EA recovered to $16+, I started buying again on strength. As it continued higher, I added shares above $16. I'm currently sitting on 2800 shares and I have another 1200 to buy before my position is full.

   Some may question why I didn't buy when EA was $15. Well, when shares drop below my comfort level, I won't sell my position but I won't add to it anymore because I don't know if the next price is going to be $13 or even $11. EA has been punished by the market and rightfully so for the moves and acquisitions they've made in the past couple of years.

   With the economy recovering in the next few years, I am willing to buy into EA now because they'll improve with the economy as more consumers return to their freespending ways. What's my target on EA? I think the highs of 2005 wouldn't be out of the question. That's when EA traded around $60 and I think there's at least one more split in EA when it reaches that level again within the next 5 years.

Friday, October 8, 2010

Yahoo Spending $2 Billion To Buy Groupon?

   I chuckled when I read Kara Swisher's article on Yahoo's potential takeover plans for Groupon. Hey Yahoo, why would you spend $2 billion on a fad with few barriers to entry? If Yahoo had any initiative, they could easily start a Groupon clone themselves but they're not innovative like that. Yahoo is like one of those lumbering giants that lost its zest for life in the last decade and now gets by with the scraps. Google ate Yahoo's breakfast, lunch, and dinner.

   Kara's article also brought up memories of the rumors that Yahoo was going to take over Facebook for about $1.5 billion a few years ago. Facebook's market valuation is now higher than Yahoo's based on trading on SecondMarket. Ironic ain't it? The sad thing is, if Yahoo had taken over Facebook, they would have ruined it. Yahoo has a lackadaisical and middling corporate culture. I know this because I am friendly with a project manager there who left the company for greener pastures. I thought Yahoo was out of their facking minds when they turned down Microsoft's takeover offer a few years ago. Since that tragic episode, Yahoo's shares have tumbled about 50% and have flatlined for the past year.

   What would be my advice to Yahoo? Sell. Sell yourself to someone who's hungry and has ambition. As it is right now, Yahoo is a comfortable calf who's content to sit idly by while younger, leaner, and hungrier companies gobble up market share and become the next titans of the internet.

Thursday, October 7, 2010

Wii Super Mario All-Stars 25th Anniversary bound for Europe

   Nintendo announced the Japanese version of the Super Mario Collection 25th Anniversary last month and today, they've confirmed that the Europeans are also getting the game. That probably means an announcement of a North American release is imminent. The collection includes Super Mario Bros, Super Mario Bros 2, Super Mario Bros 3, and Super Mario Bros: The Lost Levels. A bonus booklet and soundtrack are included to reward buyers.

   There was news last night from Japanese vendors who stated that a shortage of the Japanese version is highly likely so the European news is welcome. The announcement of a USA version of the game would be a bigger welcome.

Wednesday, October 6, 2010

Ubisoft believes in Kinect

   Using history as my guide, I can predict how the Kinect will fare in the marketplace when it's released next month. All of the game analysts can crunch their numbers, work the potential sales models, and make their projections but all that is for naught. The Kinect is going to be a failure just like Sony's Move is going to be a failure. It's not me saying it though - history is talking and what it says is that accessories don't make a console. Despite the "excitement" and activity centered around the Kinect and Move in the market right now, the adoption of the accessories will never reach a level that'll convince publishers to continue making games for them.

   The news about Ubisoft angling to become a major player in Kinect game software has my brain ticking and making plans. With my conviction that the Kinect is going to be a failure and Ubisoft's conviction in the Kinect, that leaves me with one conclusion: Short Ubisoft shares on the Euronext Paris bourse. There's nothing else to do when I'm shown an opportunity. I won't start shorting until after Christmas however. Sales for anything related to video games go on a rampage during the entire month of December so Ubisoft shares are probably going to get some appreciation. The new year should bring reality crashing down on Kinect however and I'll be waiting.

Tuesday, October 5, 2010

Panasonic Gets Back into Gaming with the "Jungle"

   Panasonic's first crack at the gaming industry was the 3DO which never gained mass market momentum. The 3DO debuted way too early for its time and if it had been released a few years later, I think it would've fared much better than it did. The 3DO was launched at too high of a price point and it never convinced enough publishers to support the console with software.

   Panasonic's going to be giving gaming another go with a portable gaming device called the "Jungle" which sounds dumb but it might interest a few takers. The Jungle allows gamers to play MMORPGs and other online games... which you can already do with a laptop. I'll make a prediction right here and right now - the Jungle will be a major failure. My advice to Panasonic would be to cancel the Jungle right now. There's no specialization, no added value, and no market demand for the Jungle. Remember the N-Gage? That's the fate of the Jungle. Panasonic can send me $5,000 for my consulting fee which is cheap considering the fact that they're about to pour a few million into this POS.

Monday, October 4, 2010

I'll Tell You What's Wrong With Wall Street

   In a Marketwatch article published today titled Videogame sales compete with online time | Popular titles such as ‘Call of Duty,’ ‘Halo’ may keep gamers at home, a Wedbush Morgan game analyst named Michael Pachter says the following:

"Pachter of Wedbush says game publishers will need to figure out how to start making money from the online playing of their game titles to preserve their value. “Nothing is free forever,” Pachter commented. “You can buy a game now and play it for 500 hours when you used to play it for 50 hours and be done with it. More people are playing console games for more hours and not paying for it.”

   First of all Michael, the best games don't have a shelf life. Your way of thinking is typical of a greedy Wall Street analyst who only thinks in terms of revenue, profit margins, and constant profiteering. There is absolutely NOTHING wrong with a gamer who buys a copy of a game for $60 + tax and plays it for 500-1000 hours without incurring any additional fees. If Activision or EA wants additional income from a game, they've already figured out how to do it by way of downloadable content, expansion packs, and in-game purchases.

   Game developers should continue to produce top notch software that can be played beyond the typical Wall Street view of 50-100 hours and "be done with it." If Michael Pachter and his ilk had their way, they'd encourage developers to produce games that can only be played for 50 hours before a fee system kicks in that charges the gamer for every additional hour beyond 50. That folks, is how a game analyst on Wall Street thinks.

Sunday, October 3, 2010

Supreme Court docket: Violent video games

    Ain't this a bitch? The list of the Supreme Court's upcoming court cases was released earlier this morning  and one of the cases that'll be heard in November is:
Schwarzenegger v. Entertainment Merchants Association

l Nov. 2: California is the latest state attempting to prevent the sale of "violent" video games to minors. An appeals court said, similar to decisions of courts elsewhere, that the law violates First Amendment free-speech rights.

   That's right, the governor of California, Arnold
Schwarzenegger (how the FACK did that happen?) and once-Terminator has petitioned the court to halt the sale of violent video games to minors. I watched the T-800 kill a bunch of cops in the first movie when I was a little kid but I'm a normal, jaded, extremely intelligent, and slightly- amused-at-nothing-in-particular grown-ass man. I have never had the urge to commit mass murder, chop someone into three pieces so I could fit him/her into a suitcase, or demand to someone, "Your clothes, give them to me." Never have these things crossed my mind.

   My parents brought me up properly, instilled a fear of the whip in me, and sent me to bed starving when I was out of line. If more parents did that, maybe all the kids would grow up to be as good and upstanding as J-Sonoma. I did shoplift once - it was a paper clip I needed when I was in the 3rd grade. I think I did that the day after I watched Terminator.

Details of the case are listed below:
Granted April 26, 2010, for argument in the 2010 Term.
Docket: 08-1448
Issues: (1) Whether the First Amendment permit any limits on offensive content in violent video games sold to minors; and (2) whether a state regulation for displaying offensive, harmful images to children is invalid if it fails to satisfy the exacting “strict scrutiny” standard of review.
The full suit may be viewed at:

Friday, October 1, 2010

Best Games Here

   I laugh whenever I see someone in the office at the BestGamesHere website. We own that and it contains some of the worst flash games I've ever had the displeasure of trying. Out of the 1000+ games on the site, two were deleted from the mass installation directory that I recall. They are as follows:

1) Meat or Pussy - This game showed a small portion of an image and the player had to determine if it was a woman's vagina or a piece of meat. Yeah, it was offensive and tasteless so we deleted it on those grounds.

2) Kindergarten Killer - Just like the name says. You know how some people have zero social filter and they'll just do or say whatever's on their mind? I think the designer of KK is one of those people. One redeeming quality of the game is that the kindergartners shoot back.

   Most of the other games on BGH are drek but there's some good ones too. The site's about a month old and the traffic's fairly consistent. If you're after higher caliber free online flash games, we also own another gaming site at - my favorites there are CityCraft, BTG Tower Defence, and Crusade. There's talk of starting another arcade site but these are just small projects for us to test the waters since there's no real specialization in arcade sites.