GIN _02.tesogfmr.qxd 12/17/03 11:12 AM Page 1 VOLUME 1, ISSUE 2; DECEMBER 21, 2003 Happy Holidays? The bipolar pendulum seems to be swing- licensed properties, is finding that it’s possi- prices early in the year (definitely before ing back and forth so quickly that you’d ble to abuse franchises: Without a new book E3). THQ also said that it has PSP emula- think everyone in the videogame industry or film with which to cross-promote, Harry tors on hand and has begun development were wearing neck braces. Several months Potter: Quidditch World Cup is not perform- for that promising platform. ago, industry wags maintained that ing as expected. It will be interesting to see Nintendo’s third-place standing in the what EA learns about a movie tie-in game— In 2004, videogames will become even console race was permanent enough for without a movie to tie in with it—as it pre- more mainstream purchases. In a recent pre- the company to get out of the hardware pares a big Lord of the Rings game for next sentation, Electronic Arts CFO Warren business. Now, a huge price cut later, year, a year with no Lord of the Rings film. Jensen reminded an audience of institutional Nintendo will come out of the holiday investors that during the previous cycle, shopping season with a strong second- “I’m not sure how thankful I am,” an more than 90 percent of PlayStation 1 sales place showing. East Coast electronics-chain buyer told us in came after the price dipped below $149. mid-December. “We could have done with- “That brings mass penetration,” he said. In early November, chains like Electronics out the blizzard. I don’t think it was disas- “That hasn’t started yet in this cycle.” These Boutique were lowering earning expecta- trous, but it did slow down the momentum are optimistic words from an executive who tions, but by late November, resellers were it looked like we were building right after also mentioned that EA enjoyed 22 million- more optimistic, pointing to a report by Thanksgiving. Things are going OK. We selling titles this fiscal year, up from 16 the Harris Nesbitt Gerard that PlayStation 2 didn’t think it was going to be that much year before. ■ game sales were up 7 percent for the year better, but we were seriously afraid that it so far. Shortly after the early December was going to be much, much worse.” TABLE OF CONTENTS Northeastern blizzard, buyers seemed to be returning to Chicken Little mode, a state As the buyer uttered these words, he COMPATIBILITY reinforced by some unhappy post- picked up a Terminator 3 box. “I know this CONUNDRUM Thanksgiving news from Best Buy, which sounds crazy because so much of our busi- Will the next Xbox play the current Xbox’s reported a double-digit drop in game sales ness comes in December, but some of the games? since the year-ago quarter. stores are telling me that, when it comes to PAGE 3 games, they want to get the holiday season As this issue goes to press, enough Tony out of the way and get the big games for Hawks and WWE Smackdowns are mov- next year—like the new Halo and Half-Life MOVIE MADNESS ing past cash registers to keep the lithium and Doom—out already. Those will bring How to make sure your game-based movie capsules at bay (plus, Saddam’s capture is in incremental traffic. For electronics stores, isn’t the next Street Fighter said to be helping retail sales). There’s no we have plenty of other things in December PAGE 4 apparent breakout game this season to bring in traffic. After Christmas is over, (another Grand Theft Auto soon, please!), we’re going to need some hot games with SHANGHAI SURPRISE but there are enough solid performers and titles that people have heard of to bring pleasant surprises (like Need for Speed people in.” PlayStation 2 comes to China. The pirates Underground; leave it to industry giant are waiting Electronic Arts to score the unexpected hit) Expect news to heat up on the develop- PAGE 8 to keep the nail biting to rational levels. If ment side, as well as the retail side, after the last year was a once-in-a-cycle year, the dip holiday season is safely behind us. Those PRODUCT OF THE YEAR this year is still surprising. who listened in on THQ’s most recent quar- terly conference call were privy to some What had the biggest impact? Not everyone is happy this holiday season. clear hints as to what the first part of next PAGE 9 Atari’s Terminator 3: War of the Machines is year will look like. an expensive nonevent, and we see the com- TOO SOON TO VERIFY pany is discounting Enter the Matrix because To counter the big GameCube price drop The hottest industry tips, unfiltered poor word of mouth has begun to over- (it’s listed at $99, but we’re seeing it pro- whelm its heavy marketing. Even Electronic moted at $79), company executives expect PAGE 11 Arts, the unchallenged leader in sustaining both Sony and Microsoft to cut console GIN _02.tesogfmr.qxd 12/17/03 11:12 AM Page 2 Who’s Got the Patents? EDITOR-IN-CHIEF Jimmy Guterman Total Utility Game Patents Registered [email protected] 1200 ZIFF DAVIS MEDIA 1,017 500 UNICORN PARK DRIVE 1000 WOBURN, MA 01801 781-938-2639 800 ART DIRECTOR: Jason Babler 600 516 COPY DESK: Tom Edwards, Greg Ford, Susie Ochs, Maritza Refuerzo 400 PRODUCTION: Carlos Lugo, Michele 217 200 175 Manousos, Anne Marie Miguel 107 114 8 0 CIRCULATION DIRECTOR: Chris Wilkes 0 [email protected] EA ega claim S Sony apcom Ac C ZIFF DAVIS GAME GROUP ctivision Nintendo Take-Two A Microsoft Infogrames SENIOR VICE PRESIDENT: Dale Strang PUBLISHER: Lee Uniacke Patents Issued by Company, 2000-2002 EDITORIAL DIRECTOR: John Davison 450 BUSINESS DIRECTOR: Cathy Bendoff TOTAL 400 350 Copyright © 2003, Ziff Davis Media, Inc. MICROSOFT All rights reserved. No material in this 300 publication may be reproduced without 250 written permission. Bulk orders, reprints, 200 and site licenses are available. Subscriptions cost $995 per year. Visit 150 http://www.gamingindustrynews.com for SONY 100 our best subscription offer. Gaming NINTENDO 50 Industry News is published monthly by Ziff Davis Media Inc., 28 East 28 St., 0 2000 2001 2002 New York, NY 10016. Source: United States Patent and Trademark Office — compiled for Gaming Industry News by Mark Terry 2 gaming industry news December 21, 2003 GIN _02.tesogfmr.qxd 12/17/03 11:12 AM Page 3 The Price of Compatibility The next Xbox will play current Xbox games. But Microsoft might have to jump through some fiery hoops just to make sure By Dean Takahashi Microsoft is keeping many (most?) details possibility to make a compatible Xbox.” Microsoft, but each carries some risk: about its next-generation Xbox console He didn’t discuss specific products his under wraps, but at least one of the choices company is making for Microsoft, but he • It could achieve partial compatibility that Redmond has made public is stirring a says that if you just consider the timing through software that doesn’t exploit some spirited debate. Will Xbox Next, as it’s now (about five years) between the consoles, of Nvidia’s technology, but that may mean being called, play games designed for the then Moore’s Law dictates that the new older games won’t look as good on the next original Xbox? Your answer depends on machine will be eight times as fast as the Xbox. Microsoft can license either intellec- who you ask. old one. With such an increase in raw pro- tual property or reuse Nvidia chips and Microsoft has kept mum about the next Xbox, except in two major areas. The com- MOVING FORWARD, MICROSOFT WILL DO pany has announced that ATI Technologies WHAT IT MUST TO PLEASE ITS CURRENT- will provide graphics technology for Xbox GENERATION XBOX CUSTOMERS. Next, while IBM will provide PowerPC microprocessors and Silicon Integrated cessing speed, Xbox Next should have incur additional costs above and beyond Systems will supply a chipset. In choosing plenty of horsepower to emulate the old what it will pay for the IBM and ATI chips. these companies, Microsoft appears to have games via software. That is, the new hard- Considering Microsoft lost more than $100 broken its ties to previous vendors Nvidia ware will be fast enough to execute the old per unit on much of its original Xbox hard- (graphics) and Intel (microprocessor), which games even if they have to run through ware, that doesn’t seem likely if the compa- weren’t as eager as their rivals to retain software translation. ny wants to make money the next time Xbox business by being the lowest bidder. around. A software solution eschews most On the processor side, Microsoft might outside licensing expenditures. Jen-Hsun Huang, CEO of Nvidia, says have to employ its Connectix software to his guess is that the next Xbox won’t be get the Intel code to run on the IBM • It could risk broadly interpreting its compatible with the old one. “It’s virtually PowerPC. That problem raises the prospect prior deal with Nvidia by using Nvidia’s impossible on many levels,” he adds. “On of additional costs and engineering efforts. technology and not paying for it. That an intellectual-property level. On practical “It’s not a trivial amount of work,” says would risk a lawsuit.