Viacom finally decides to dump Harmonix, here is the short list of who might be in the buying mood

Viacom’s announcement to sell Harmonix today is no surprise to anyone who follows the video game industry. The company mentioned last August that soft sales of disc-based media threatened to hurt Harmonix’s goodwill, and to date the developer’s biggest contribution to Viacom’s bottom line has been to cut Rock Band’s losses last quarter.

So the real question is, who are the potential buyers of Harmonix?

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State of the Video Game Console War

It’s been two years since the last time we stepped back and took a look at the console war from both a sales and financial perspective. Since then we have found out that the video game industry might not be “recession proof” but it is certainly “recession resistant” and has held up significantly better than other sectors of the economy.

With all that has happened in the industry over the last two years I thought it would be a good time to update the charts and see who’s in the lead, who has turned it around and who hasn’t.

*Microsoft did not announce exact sales numbers in their last earnings report but instead stated that the 360 has sold “over 40m”

In terms of sales all three companies did a good job moving hardware and have at least doubled their respective install bases since 2008.

  • Sony PlayStation 3 – 22.85 million unit increase from 2008
  • Nintendo Wii –  46.48 million unit increase from 2008
  • Microsoft Xbox 360 – 21 million unit increase from 2008

Looking at each company’s market share shows some weakness with the Xbox 360 which lost 7% of the market from 2008 (1% to the PS3 and 6% to the Wii).

With console sales numbers out of the way let’s take a look at how each company’s operating income has performed over the last two generations of consoles.

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FTC Floats the Idea of a National 5% Tax on 'Consumer Electronics'

The Federal Trade Commission has proposed a 5% tax on consumer electronics, including video game consoles. According to the FTC the tax, which has been dubbed the ‘iPad Tax’, would allow the bloated federal government to steal an additional $4 billion annually from American Taxpayers which it could then distribute in their un-Constitutional plan to “save journalism” (in this case “journalism” is pronounced “liberal newspapers that nobody wants to read or advertise in”).

Obviously, the FTC can’t make this law on its own but it has now floated the idea to all the idiots in DC who will most likely jump on it faster than Clinton on an intern.  I’m sure part of their justification will be that with the tax they can lower Obama-care costs because video games make people fat and unhealthy (remember all of Obama’s video game attacks).  So higher video game taxes result in lower sales and less fat unhealthy people.  Everyone wins, except of course for the video game industry, the people who work in it, consumers and pretty much everyone except for the government and the liberal newspapers.


Treyarch Calls Out “Next Gen” Only Developers With Modern Warfare Reflex


I’ve lost count of the number of developers that have stated that their PS3 / Xbox 360 game could not be ported to the Wii because it would be rendered unplayable in the conversion.  This explanation seemed reasonable enough at the time due to the obvious differences in power between the Wii and the PS3 / Xbox 360 and I, like most gamers, accepted it.

So, when Call of Duty: Modern Warfare Reflex was announced my eyeballs rolled about as far back in my head as possible.  A two year old HD title, even if the game in question happened to be one of the best of this generation, being ported to the Wii did not sound like a good idea.  And after seeing some initial screenshots my original assumption seemed to be confirmed and I pretty much took Reflex off my radar.

However, all that changed when the first gameplay videos began to surface.  Against all odds Treyarch seemed to have done the impossible and made Modern Warfare look pretty good on the Wii.  Those YouTube videos changed my mind about Reflex and I really wanted to see for myself how it stacked up against its HD brothers.

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Editorial: The Case Against Console Price Cuts

Let me start off by saying I don’t know if the PlayStation 3, Xbox 360 or Wii will get a price cut this year.  Sony, Microsoft and Nintendo may very well decided to drop their prices before Christmas as many analysts have predicted.  The point of this editorial is not to predict price cuts, but to point out one possible reason why console prices have remained at the current level and why it might be a good idea for the companies involved to keep them there.

Despite all the recent industry calls for console price cuts the Wii and PS3 have remained at their respective price points from 2008.  With Wii sales slowing, Nintendo has dismissed price cuts as a means to spur sales saying that they are a “short term incentive“.  Sony has repeatedly stated that they need to get the PS3 to a break-even level, even when Activision recently threatened to pull support for the system.  In Sony’s case the fact that they have and are continuing to lose a tremendous amount of money on the PS3 is certainly one reason for their refusal to drop prices.  But this doesn’t explain Nintendo’s position.  They have always sold the Wii for a profit and should have plenty of wiggle room to lower prices.  The answer, for both of these companies, may have less to do with their current state of the video game industry and more to do with the value of the U.S. dollar.

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PlayStation 2 May Have Won Last Generation’s Sales Battle, but it Lost the Console War

Every fanboy loves the smell of fresh sales numbers in the morning. They are the main weapon the video game hardware manufactures use to belittle their competition in press releases every month.  And I will be the first to admit that I sit with eager anticipation on the Thursday that NPD sales numbers are released for the previous month. When they finally come out I can hardly type up my post fast enough, before I dash off to update the Gamer Investments NPD graphs. It’s all very exciting, because as everyone knows whoever sells the most units will ultimately be declared the winner of that generation’s console war.

Last time around Nintendo’s Gamecube came in dead last, selling 21.74 million systems worldwide. Microsoft, the new recruit in the war, managed to sell over 22 million Xbox systems, putting it in second place. But nobody was able to come even close to touching the sales numbers that Sony put up. Over 120 million PlayStation 2 systems made their way into homes around the globe. As I understand it, part of what helped Sony achieve those amazing sales numbers was that in some smaller countries a PS2 slim was handed out along with the birth certificate to first time parents. Sony was easily the winner of last generation’s console war. Or were they?

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Is Nintendo Really “Reccession Proof”?

On November 19, 2007 in a CNBC article by Andrew Fisher entitled “Nintendo Exec Says Wii is Recession-Proof” Reggie Fils-Aime (Nintendo of America President) was asked about how a recession in the United States would affect Nintendo.  Reggie responded, “Historically when that happens our category tends to do fairly well.”

Thoughts of a recession should strike fear into the heart of any business that relies on people spending their money on unnecessary luxury items.  Recessions tend to bring with them higher unemployment, and drops in consumer spending.  It would stand to reason that someone who just lost their job might just come home and put the Wii up on ebay, instead of buying the latest video game.  Reggie’s bold claim of doing “fairly well” during a period of recession seems to fly in the face of all logic.  But, it is also a statement that is backed up with some historical precedence. Click to read the rest of the story