Star Wars: The Old Republic – Activision CEO Questions Economics for EA

Star Wars: The Old Republic is one of the most anticipated MMORPGs in recent history and is one of the biggest products for Electronic Arts this year. Still, as a joint venture with LucasArts, Activision CEO Bobby Kotick questions the economics of the title.

“Lucas is going to be the principal beneficiary of the success of Star Wars. We’ve been in business with Lucas for a long time and the economics will always accrue to the benefit of Lucas, so I don’t really understand how the economics work for Electronic Arts,” said Kotick, who noted, “If you look at the history of the people investing in an MMO and achieving success, it’s a small number.”

As for Activision’s business, they’ve had to deal with the ‘first-world problem’ of having their Skylanders game/toy hybrid sell out across the U.S. during the Black Friday sales rush. “Retailers across the board are concerned that they will be out of inventory well before Christmas,” he explained. “There’s nothing we can do because they are made offshore and we can’t get product made that quickly.”

Source: Reuters

Zynga CEO Approval Rating Below 50 Percent

Glass Door, a career services firm, released the results of a survey conducted before Zynga’s quiet period, and CEO Marcus Pincus only had a 46 percent approval rating far below the average rating of 62 for most CEOs. The best of executives, like the late Steve Jobs, were around 97 percent; by contrast, the rating for Pincus is akin to recently fired Yahoo CEO Carol Bartz and former HP boss Leo Apotheker.

“If you are under 25, have no kids, love the smell of dog and want to get fat eating all kinds of free food, by all means, apply,” said one written response provided by Glass Door.  “It will be the extension of the dorm-living that you will need right after college. Professionals who want to complete an entire design/develop/iterate/deploy/and document cycle will find the going is tough.”

Source: VentureBeat

MapleStory Hacked In Korea

Roughly 13 million MapleStory accounts were recently hacked, compromising player names, user IDs, passwords, and South Korean federal registration numbers. It is being investigated by the Korea Communications Commission; no word on whether this will affect publisher Nexon’s IPO.

While roughly 75 percent of the MapleStory was affected, no player outside of Korea need worry. “We operate separate servers in each country. Only Korean users’ information was affected,” said the company.

Source: Korean Herald

Valve Talks Piracy As ‘Non-Issue’

Valve managing director Gabe Newell asserts that piracy is a “non-issue” for his company’s Steam service. He indicates that piracy is not dictated so much by high prices but lack of proper service.

“For example, if a pirate offers a product anywhere in the world, 24/7, purchasable from the convenience of your personal computer, and the legal provider says the product is region-locked, will come to your country 3 months after the U.S. release, and can only be purchased at a brick and mortar store, then the pirate’s service is more valuable,” said Newell.

“Our goal is to create greater service value than pirates, and this has been successful enough for us that piracy is basically a non-issue for our company,” added Newell. “For example, prior to entering the Russian market, we were told that Russia was a waste of time because everyone would pirate our products. Russia is now about to become our largest market in Europe.”


Zynga Staff May Exodus After IPO

A quarterly staff survey at Zynga recently solicited 1,600 responses, many angry at the long hours to meet deadlines. The company has maintained very strict standards for its employees, and despite indications that they are open to fixing those HR problems, it could come back to bite the social games company.

“Zynga should be an example of entrepreneurship at its best,” said Roger McNamee, a co-founder of the venture capital firm Elevation Partners. “Instead it’s going to be a Harvard Business School case study on founder overreach — this will be a cautionary tale.”

Despite all the acquisitions by Zynga over the past couple years worth $119 million, they’ve been rebuffed by major parties. PopCap rebuffed a $950 million in cash offer from Zynga because of rumors of their internal politics while Rovio, walked away from a deal worth roughly $2.25 billion in cash and stock.

Already recruitment firms are turning up the heat prior to the IPO. “I expect a lot of game and tech companies will begin recruiting Zynga’s talent after their equity becomes liquid,” said Gabrielle Toledano, head of human resources for Electronic Arts. “Competitors will make the case that they offer much more compelling opportunities for creative people.”

CEO Marcus Pincus carefully goes over all the reports for the game using multiple spreadsheets to carefully track the progress of Zynga’s games and its roughly 3,000 employees. “It’s very similar to a New York investment bank,” said Lou Kerner, an analyst at the brokerage firm Liquidnet, who has followed Zynga for years. “It’s data-driven, and it’s intense.”

While Zynga has offered buy backs for certain senior employees, counter to most Silicon Valley start-ups, Pincus sees the company as more of a pure meritocracy. “Mark Pincus has the reputation that he is driven to the point of a madman,” said Michael Pachter, a Wedbush Securities analyst. “Zynga is driven because it has a gigantic competitive advantage right now.”

While the company looks to soften its image, there’s still a headwind of negativity on the employee front, and that the IPO might make ambitious young talent look elsewhere. “We’ve learned that when companies treat talent as a commodity, the consequences are severe,” said Toledano. “It takes years to repair a reputation.”

Source: New York Times

Angry Birds Challenging Star Wars, Sesame Street In Toy Market

Angry Birds is not only an incredible mobile phenomenon, it’s also a prime example of some very smart merchandising of a powerful gaming IP.

Developer Rovio has seen its game downloaded more than 500 million times worldwide, but it’s now facing a different challenge in the toy market, as it aims to sell a boatload of plush animals, balls, pillows, key chains and more. Can Angry Birds really sell toys against venerable brands like Star Wars, Sesame Street, Disney’s Princess line and The Smurfs

Alec Kessler of Commonwealth Toys & Novelties, the New York company that in 2010 licensed toy rights, certainly believes in the power of Angry Birds.  “It’s phenomenal,” says Kessler.  “It’s the app that has turned into a toy. The more downloads the app gets, the more recognizable the toys are.”

The advantage for Angry Birds is that it has such a wide audience. Kessler says the demographic is “3 to 83” and the toys have become a major hit. “Retailers are having a hard time keeping them in stock,” Kessler noted.

Source: The Hollywood Reporter

Miyamoto Was Reluctant To Make Changes For Mario Kart 7

Mario Kart 7 could be a huge seller this holiday and a big boost for Nintendo’s 3DS handheld (along with Super Mario 3D Land), but Nintendo legend Shigeru Miyamoto almost didn’t let Mario Kart 7 turn out the way it did.

“The way the gliders fly isn’t particularly faithful to real life, but I think it feels pretty good in action,” Miyamoto related to Famitsu. “I was actually pretty well against some of the customization features of the game, though. It can be fun to win money for racing and use it to buy parts and such, but I didn’t think that had much to do with the core fun of the series. The idea for that came from the studio staff, though, and my final response was ‘If you can build this customization on top of a solid control and gameplay foundation, then go ahead’.

“Sometimes people yelled at me to look at things more closely but like I said, the core of Mario Kart is pretty solid by this point and I think it’s safe to have it evolve in a pretty staid and traditional manner.”

Source: 1UP

Scribblenauts Developer Bashes Retail Model

5th Cell creative director Jeremiah Slaczka is saying that the current retail model for games is broken. Skyrocketing budgets have exposed the weakness of the $60 price tag, he asserts.

“Before the model was tolerable, because the cost was reasonable enough to allow mediocre selling games to make money,” he said. “Now it’s just insane. If you aren’t going to be a mega hit at $60, you might as well give up before you even try, because it’s tens of millions down the hole.”

“As a consumer, why would I want to play an okay FPS when I can play a bunch of great FPS titles for the same price And that’s what the consumers did,” said Slackza. “But what if you could rent Homefront for $4.99 for 24 hours from your console What if Homefront was only $30 dollars upfront for the single player and if you liked it you could buy the multiplayer for an additional $30 All of the sudden it’s not a binary purchase option anymore.”

Source: GameInformer

Microsoft To Launch Kinect Hardware For PC

Microsoft has revealed via its Windows blog that it’s preparing to launch a PC-specific Kinect camera peripheral early next year. The new Kinect will launch as part of the Kinect for Windows commercial program, and the camera’s firmware will feature a new “near mode,” enabling the device to keep track of objects as close as 50 centimeters away, “with graceful degradation down to 40 centimeters.”

That’s a whole lot better than the Xbox 360 version of Kinect, which has difficulty tracking players if they’re too close in a tightly packed living room.  It’s not clear if the “near mode” will be brought over to the 360 version with a later update, but we sure hope so.

The PC Kinect will also come with a shorter USB cable, and a small dongle to “improve coexistence with other USB peripherals.”