One year after shutting down its Ovi Music Unlimited streaming service that came bundled with its smartphones, Nokia is trying again. On Tuesday, just ahead of its official unveiling of its first Windows Phone 8-powered Lumia handsets, Nokia announced a new music streaming service that will come bundled with its devices. Unlike Ovi Music, however, the new service will be free — no ads, no subscription fee. While the idea of bundling content with devices is not new, increasingly, content services are integral to device makers’ hardware strategies.
Nowhere is that more true than with Amazon, whose Kindle e-book readers and Kindle Fire tablets are essentially portable front doors to Amazon’s digital content stores. And sure enough, Amazon on Tuesday, just ahead of an expected announcement regarding a new-generation Kindle Fire, Â announced a new deal with Epix to bring new-ish Paramount, Lionsgate and MGM films to its Prime Instant Video subscription service that comes bundled with the Amazon tablet.
The trend is becoming so pronounced that some analysts are speculating that content service providers will need to start building their own hardware to remain competitive. Simulmedia CEO Dave Morgan, for instance, makes the case of aÂ Yahoo-branded TVÂ in the current issue of Ad Age.Â Conversely, Brian Lowry of Variety wonders whether even Apple can remain competitive without its own subscription-based iContent services.
Here’s our prediction: The new Microsoft Surface tablets will come bundled with Xbox Live, giving the tablets their own, closely linked content service and taking the highly popular Xbox Live platform beyond the game console.
Microsoft seeks to further establish the Xbox 360 as an access point for all forms of home entertainment, announcing plans to integrate content and services from the likes of cable operator Comcast and networks such as HBO into the Xbox Live dashboard. The integration does not represent a consolidation of consumersâ cable bills, however (via the Seattle Times); access to cable programming, for example, will require subscriptions to both cable (and Internet) service and Microsoftâs $60-per-year Xbox Live Gold package.
Intellectual property company Pendrell Corp. plans to acquire 90.1 percent of digital rights management (DRM) developer ContentGuard Holdings, in a deal with Microsoft, Techicolor, and Time Warner valued at $90.1 million.
Time Warner, which in 2005Â jointly acquired ContentGuard with Microsoft and Technicolor, will retain a 9.9 percent stake in the firm. Technicolor announced the sale of its stake on Thursday; although Microsoft has not commented publicly on the transaction, a filing with the Securities and Exchange Commission confirms the company as a majority shareholder in ContentGuard (via TechFlash).
Originally spun out of Xerox PARC in 2000, ContentGuard has developed content protection technology for a range of connected devices, from DVD players to mobile phones. Approximately 50 percent of mobile handsets worldwide license ContentGuard, according to Pendrell.
Pendrell and Time Warner said they would work together to accelerate growth of ContentGuardâs technical solutions and licensing programs.
Technicolor in a statement said that the sale was in line with its corporate strategy âto focus on the monetization of its IP assetsâ; the company added that it will record a capital gain estimated at $11.5 million at the closing of the transaction.
Highlights from videogame console makersâ press events at the E3 Expo in Los Angeles:
Sony: In welcome news for 3D home entertainment developers, Sony Computer Entertainment said it planned to âbreak the mold on 3D pricing this yearâ with a $499 bundle that includes a 24-inch, PlayStation-branded 3D display, along with a pair of active-shutter glasses, an HDMI cable, and a copy of the upcoming âResistance 3â videogame (via PC Magazine).
In related news, analysts are anticipating that Sonyâs forthcoming âUncharted 3â could be the videogame industryâs watershed 3D title (via The Hollywood Reporter). The game, developed by Sony-owned studio Naughty Dog, is set for a Nov. 1 release.
Sony Computerâs Jack Tretton also took time during the companyâs press conference to reiterate his apology for the data compromises that the PlayStation Network suffered from hackers in May.
Nintendo: The companyâs âWii Uâ system, set for release in 2012, will employ a motion controller that itself houses a 6.2-inch touchscreen. Nintendo thus looks to add new second-screen functionality to game developers, while incorporating some tablet-to-TV tricks for sharing photos and online videos.
Wii U games will ship on high-density, 12cm optical discs, but the disc format will be proprietary and not based on Blu-ray, according to reports.
Microsoft: The Xbox 360 maker has offered few details of its promised live TV integration later this year. The company also plans to offer YouTube video playback via the system, along with voice-activated Bing searches for TV shows and other entertainment content (via Variety).
Microsoft hints that it has more than just video game announcements in store for next weekâs E3 Expo, as it touts its Xbox console as an increasingly popular hub for streaming video and other home entertainment content.
In fact, â40 percent of all Xbox activity now is non-game,â says Frank Shaw, Microsoftâs VP of corporate communications, in a corporate blog post. âPut another way, weâre seeing an average of 30 hours of video consumption per month per Xbox, a number that is growing fast.â
The company now claims sales of 53 million Xbox 360 consoles to date, along with 30 million members of its Xbox Live online services.
Packaged video game software sales in April increased 26% year-over-year to $503 million, according to the NPD Group. But Sonyâs April 20 shutdown of its PlayStation Network appears to have had some impact on the market.
While Sony sold 204,000 PS3 consoles during the month, representing a 13% increase over sales in April 2009, rival Microsoft sold 297,000 Xbox 360 consoles during the month, a 60% increase from last year.
As CNBC reports, the newest installment of Sonyâs popular âSocomâ franchise also failed to chart with the monthâs 10 best-selling games. That is likely due to the game being released one day before Sony shut down its network to assess the extent of hackersâ attack.
Making the announcement today that it would acquire Internet communications company Skype for $8.5 billion in cash, Microsoft said that Skype would support a range of products, including Kinect video game sensors and Xbox consoles connected to the Xbox Live service. Skype currently counts 170 million monthly users worldwide, although The Wall Street Journal points out that not all users make video phone calls with the companyâs voice-over-Internet-protocol technology.
More highlights from the National Association of Broadcasters convention in Las Vegas:
â˘ Microsoft Corp. announced today a âpartner ecosystemâ to develop cloud distribution solutions for the media and entertainment sector, using the Windows Azure platform. A slate of companies have joined the Microsoft initiative, including Digital Rapids and Origin Digital for cloud-based content processing; Arvato Digital Services, DAVID Systems, Harris Broadcast Communications, Polycom Video Content Management, Sitecore, and TechPath for cloud-based content management; Aspera, iStreamPlanet, MPS Broadband, and Signiant for cloud-based content delivery; and BuyDRM and Cognizant for cloud-based content protection.
â˘ Meanwhile, âAvatarâ director James Cameron announced a new venture with the blockbuster filmâs cameraman, Vince Pace, to design 3D camera systems, creative tools, and services for television producers. Unveiling the Cameron-Pace Group at NAB, the director told Reuters that he expects 3D productions to take hold on the small screen within five years. â3D is just how all broadcast entertainment will be done. Sports, episodic drama, scripted and unscripted â we havenât seen anything yet that doesnât have a great degree of value added by being in 3D,â he said.
Microsoft issued on Tuesday an open call for participants in a public preview of âan updated disc formatâ for its DVD-based Xbox 360 game console.
The company did not disclose specifics of the update. Gamasutra speculates it could entail a new approach to securing the content of the DVD-9 game discs. A source tells Digital Foundry that game developers could gain 1 GB of storage capacity on the discs â a significant increase, given the discsâ maximum capacity stands at about 8GB â if Microsoft implements the new change.
In a post on the companyâs Major Nelson blog, Microsoftâs Larry Hryb says that the Microsoft is seeking âmultiple thousandsâ of Xbox Live users for the beta program.
Sonyâs PlayStation Network chipped away at the Microsoftâs lead in digital videogame sales during the second half of last year, with the online network grossing an estimated $49.4 million between July and December of 2010, according to research firm Forecasting & Analyzing Digital Entertainment (FADE).
PlayStation Network posted 40% sales growth during the six month period (compared with 2009), outpacing the concurrent 18% increase at Microsoftâs Xbox Live Arcade. The Sony network, which pulled in an estimated $9.3 million in December alone, now counts more than 100,000 monthly users.
The top-selling digital title on PlayStation during the period was Ubisoftâs âScott Pilgrim vs. The World,â for which Sony snagged an exclusive release window, with 190,000 copies sold.
For titles sold via multiple digital platforms, PlayStation is approaching sales parity with Xbox, FADE adds. âIn 2009, Microsoft enjoyed a 2:1 sales advantage for multi-platform titles launching simultaneously. Today, that advantage is nearly even with first-month typical sales being 55/45 among new titles like âCostume Quest,â âPac-Man CE DX,â and âX-Men Arcade,ââ says Benjamin Schlichter, FADE director of research & analysis.
Appleâs iTunes store accounted for nearly two thirds of U.S. electronic sell-through and Internet video-on-demand consumer spending combined in 2010 (64.5%), according to new research from IHS Screen Digest.
While Appleâs total market share declined from 74.4% in 2009, the research firm notes that the companyâs continued dominance coincides with a 60% revenue increase in the overall EST/iVOD movie business during the year.
IHS research director Arash Amel notes that while competing services proliferated in 2010, âiTunes managed to grow because of the introductions of the iPad and the second-generation Apple TV, which have spurred the companyâs movie rental offerings and have invigorated the iTunes multi-screen ecosystem.
âWe expect that in the United States, Appleâs strong performance in iVOD will allow it to continue to bypass the video on demand services offered by many major cable operators,â Amel adds.
Microsoftâs Zune video platform claimed the No. 2 spot for EST/iVOD consumer spending in 2010, with a 17.9% share, followed by Sonyâs PlayStation store (7.2% share).
More details at iSuppli.
Activision Publishing announced Dec. 21 that its âCall of Duty: Black Opsâ videogame has crossed the $1 billion mark in sales worldwide since its launch in November, according to internal company estimates.
To date, players have logged more than 600 million hours with the game, Activision says. The average âBlack Opsâ player on Xbox 360 logs on more than once a day and plays for more than one hour each seasion; over half of that time is spent playing online with and against friends, according to Microsoft.
Sales of Xbox 360 consoles increased 68% year-over-year in November, thanks to Microsoftâs introduction of the Kinect motion sensor accessory, according to new data from the NPD Group (via Information Week). Meanwhile, Activisionâs âCall of Duty: Black Opsâ rung up sales of 8.4 million units during the month, accounting for an estimated 25% of all Novemberâs videogame software sales.
Total game software sales (not including downloads) topped $1.46 billion in November, up 4% from 2009. Total hardware sales increased 2% year-over-year to $1.08 billion.
Separately, NPD reported that retailers sold some 400,000 Blu-ray players during the week encompassing Black Friday, an increase of more than 50% from the corresponding period in 2009 (via Home Media Magazine). The median price per unit during the week was $113, down 23% from the median player price of $145 last year.
Videogame software sales for the month of October rose 6% year-over-year to $605 million, while accessory sales for the industry increased 18% on the introduction of Sonyâs PlayStation Move motion controller, according to NPD (via Bloomberg).
The gains were not enough to offset a 30% annual decline in both console and portable hardware unit sales, which brought overall industry revenue down by 4% during the month.
The Xbox 360 system, however, did see a year-on-year sales gain in October â perhaps in anticipation of Microsoftâs Kinect, which went on sale Nov. 4. Microsoft separately reported that sales of the Kinect topped 1 million units in the deviceâs first 10 days (via Information Week); the company expects to sell 5 million Kinect systems by yearâs end.
Microsoft expects to sell 5 million Kinect motion controllers for its Xbox 360 game system this quarter, Bloomberg reports. The company had previously expected to sell 3 million units of the Kinect accessory, which goes on sale today. But it revised its forecast in the wake of strong consumer pre-sales and retailer orders. Review of the Kinect system at The New York Times.
âUnit sales are up, not down â that means people are buying more music, not less,â says Jeff Page, chief executive of digital music distributor TuneCore, in an interview with the Los Angeles Times. TuneCoreâs business model is accordingly looking up: the companyÂ charges a flat fee to send song and album files to digital retail, as opposed to the conventional practice of taking a percentage of sales. Since the companyâs 2005 founding, TuneCore has grown to distribute as many as 30,000 songs each week, from both aspiring and established artists, to the likes of iTunes, Amazon.comâs MP3 store and Microsoftâs Zune service.
With the standard edition of Microsoftâs âHalo: Reachâ selling for $60 and a premium version selling for $150, the total number of copies sold likely ranges between 2 million and 3 million, estimates the LA Times.
Microsoft had expected that the new videogame, released Sept. 14 exclusively for the companyâs Xbox 360 console, would best the first-day performance of 2007âs âHalo 3.â But itâs unclear whether it did so.
The $200 million figure â announced by Microsoft Game Studios VP Phil Spencer at a Tokyo videogame conference (via Joystiq) â includes European sales. Following the launch of âHalo 3,â Microsoft said that game had done $170 million in sales on its first day in the U.S. alone.
âHalo: Reachâ developer Bungie tweeted yesterday afternoon that the new videogame had already surpassed the previous franchise installmentâs record for concurrent unique users on Xbox Live (via PC World). The company did not disclose a specific number. Publisher Microsoft expects âReachâ to surpass disc sales of the previous game in the series, âHalo 3,â which moved some 5 million units during its first week of availability in 2007.
Microsoft is raising prices of several Xbox Live subscription levels in the U.S., Canada, Mexico, and the UK by as much as 25% beginning November 1.
âGoldâ level subscribers in the U.S. will pay $2 more for a one-month subscription ($7.99), $5 more for a three-month subscription ($24.99) and $10 more for a 12-month subscription ($59.99). However, current subscribers have the opportunity to secure a 12-month renewal for $39.99 before the price changes take effect.
âSince launching Xbox Live in 2002 we have continually added more content and entertainment experiences for our members, while keeping the price the same,â said Larry Hryb, Microsoftâs Director of Programming for Xbox Live, in a blog post. âWeâre confident that when the new pricing takes effect, an Xbox Live Gold membership will continue to offer the best value in the industry.â
The Gold subscription level offers members network-based multiplayer videogaming, along with access to other entertainment such as streaming movies from Netflix (provided the member has a Netflix subscription) and sports coverage from ESPN 3 (provided the memberâs broadband service provider is affiliated with the sports network).
Jesse Divnich, Director of Analyst services for game market research firm EEDAR, said that inflation â along with Microsoftâs offering of additional entertainment services via Xbox Live â justifies the price increase.
âWhen originally launched in 2002, a Gold subscription cost the same as an AAA video game, $49.99,â Divnich said in a statement. âWhen taking into account for inflation ($50 in 2002 is roughly $60 in 2010) and the additional services available to Gold subscribers in 2010, such as ESPN, Facebook, Twitter, Netflix, Last.fm and Video Kinect, a $10 price increase still represents an incredible value to consumers.â
Perhaps unsurprisingly, subscribers reacted differently to the announcement. âYou donât even give us enough content to justify $50 let alone $60,â reads the first comment following Hyrbâs price-hike post. âGlad Iâm paid up for the next year and a half.â
Microsoftâs decision to distribute review copies of its hotly anticipated âHalo: Reachâ as secure downloads via the Xbox Live Marketplace appears to have had unintended consequences.
A hacking team claims that it was able to circumvent security on the Xbox Live servers to gain access to the videogameâs full download, according to game site Joystiq. The hackers have no plans to distribute the leaked copy to the public, according to the report. But other game sites have spotted BitTorrent versions of the game being shared on several P2P portals.
âHalo: Reachâ is slated for official release Sept. 14. Microsoft posted the game to its Games on Demand service on Aug. 16, according to Joystiq, making âReachâ available in its entirety to select media reviewers who received a 25-character âpre-paid tokenâ from the company.
A Microsoft spokesperson tells Joystiq that it is âaggressively investigatingâ the purported security breach.
As Joystiq and CNET point out, the incident would be the latest in a line of pre-release leaks surrounding the âHaloâ franchise. Previous incidents include the theft of âHalo 2â codes from a disc manufacturing plant in 2004, and the early release of âHalo: ODSTâ by a retailer in 2009.
Microsoft says it will offer some 60 Xbox videogames on mobile phones running its Windows Phone 7 operating system, as part of a holiday-season push for mobile content. Wedbush Securities analyst Michael Pachter tells the International Business Times that games are the âkiller appâ for smartphones in general, and are driving user upgrades; in terms of the number of game titles offered and downloaded (including free titles), the overall mobile games market is on par with the packaged videogame market, Pachter says.
Windows Phone 7 users will be able to connect to their Xbox Live profiles and play games against friends on the cell network. Engadget has a hands-on preview of the service.
Lazard Capital market analyst Colin Sebastian is looking for Microsoftâs Kinect motion sensor to sell four million units worldwide in the fourth quarter of 2010. The analyst said in a note to investors (via MCV) that the videogame accessory, which Microsoft plans to release Nov. 4, is building more buzz in the marketplace than Sonyâs competing Move motion controller (which is due in North America Sept. 19).
Sebastian also noted that with Microsoft ramping up its Kinect manufacturing to some two million units a month, price promotions on the $149 sensor could be in the offing.
Microsoft says it will market the Kinect motion/voice sensor in November as a $149.99 accessory for the Xbox 360 console. The company also will sell a new version of the Xbox 360 system bundles with Kinect for $299.99.
The pricing matches pre-announcement reporting by game blog Gamasutra â which earlier this month quoted analysts as stating that a price point over $100 has potential to âseverely limit sales.â But the price might be OK, Wedbush analysts Michael Pachter and Edward Woo said, if Microsoft expects constrained supply during launch.
Sonyâs rival motion control platform for PlayStation, the Move, arrives in September with a price point of $99. That price includes a camera, controller, and Move-enabled videogame.
The leading entertainment subscription services in the U.S. have long had their sights on expansion into international territories. Netflix takes a step in that direction today,Â announcing its plans to launch a streaming-only video subscription service in Canada this fall. Other companies may deem the timing to be right for venturing abroad: Microsoft, for example, seems to be developing a UK extension of its Zune Pass streaming music service, according to paidContent.
The Digital Living Network Alliance (DLNA), a 7-year-old trade group dedicated to developing standards for sharing content across devices, has elected Nokiaâs Nidhish Parikh as its new president and chairman.
Parikh, who is Nokiaâs director of personal media industry collaboration, has pushed for industry adoption of the DLNA standards since the groupâs inception in 2003.
Research firm In-Stat says that with Microsoft supporting DLNA technology in Windows 7, shipments of DLNA-enabled devices will surpass one billion units by 2014. That number also includes more than 85 million DLNA-enabled Blu-ray players/recorders.
The group also elected Microsoftâs Bob Brummer as VP and Technicolorâs Peter Kaars as standing director. Brummer is also involved with fellow interoperability initiative, the Digital Entertainment Content Ecosystem (DECE). Kaars, who been a DLNA member since 2005, chairs the groupâs content protection subcommittee.
Microsoft has confirmed that sales of entertainment content and virtual goods over Xbox Live have surpassed the game networkâs subscription business. That likely means the company earned more than $600 million in movie and TV show downloads, as well as purchases of avatar accessories for games, in its fiscal year ended June 30, Bloomberg reports (via BusinessWeek).
As Forbes did last month, Bloomberg bases its estimate on Microsoftâs statement that half of the companyâs 25 million Xbox users pay $50 a year for a premium subscription to the Xbox Live service.
When combined with subscription revenues, entertainment downloads would put Microsoftâs Xbox Live revenues past $1.2 billion for the most recent fiscal year, exceeding analyst expectations.
The company will report its annual earnings July 22.
Those who use Microsoftâs Bing search engine to look for digital music can now stream song results for free and purchase track downloads with a credit card, in an expansion of the companyâs Zune brand. Previously, consumers had to use Microsoftâs âpointâ currency to purchase music via Zune. paidContent has the details.
How much is digital distribution worth to videogame console makers? Forbes âconservativelyâ estimates Microsoft, for one, to be earning at least $625 million in annual revenues from sales of virtual goods and entertainment content on its Xbox Live network.
The magazineâs math is as follows: Microsoft told a Forbes reporter at E3 that sales of virtual goods such as avatar accessories on the Zune Marketplace â along with sales of music and movie downloads â had recently surpassed the companyâs Xbox Live subscriptions business. From previous company statements â as well as a February, 2009 report from Seattleâs Post-Intelligencer newspaper, citing an internal Microsoft document on the percentage of paid Xbox Live members â Forbes reckons that 12.5 million Xbox Live members each pay $50 a year for subscriptions. Therefore, Forbes says, $625 million would be the number to beat.
Microsoft and other videogame publishers are expected to unveil more than a dozen titles this week for Kinect, the hands-free motion-control platform for the Xbox (formerly known as Project Natal). On Sunday, Microsoft revealed the Kinect brand name, promising more details at its e# press briefing today. In the meantime, PC World has a roundup of Kinect news tidbits â including a report that the platform will launch in November.
Game industry pundits expect the arrival of motion controllers from Microsoft and Sony to be among the biggest announcements at next week’s E3 Expo in Los Angeles. Research firm OTX recently conducted a purchase-intent survey among console gamers for the new hardware: 8 percent of the Xbox 360 market intends to purchase Microsoftâs Natal controller, while 6 percent of the PlayStation 3 market intends to purchase Sonyâs Move. But as Gamasutra points out, those percentages may rise as game publishers release more details of Natal- and Move-compatible titles.
Global logistics management services for online video sites has grown into a substantial business sector, already generating hundreds of millions of dollars a year, according to a new report from Strategy Analytics. The research firm predicts that online video platform providers will collectively generate more than $1 billion in revenue over the next five years.
âAs tech giants such as Cisco, Microsoft and others increase their efforts in the fast growing online video platform market, incumbent market leaders, such as Brightcove and thePlatform, will come under considerable pressure,â says Martin Olausson, the firmâs Director of Digital Media Research. âThe key to long-term prosperity for online video pltforms will be the ability to offer flexible and increasingly sophisticated solutions to a progressively divergent set of customer needs.â Strategy Analytics
Rival tech giants including AT&T, Comcast, Google, Microsoft, and Verizon announced earlier this week that they are joining together under the newly formed Broadband Internet Technical Advisory Group (BITAG) to âdevelop consensus on broadband network management practices or other related technical issues that can affect usersâ Internet experience.â Chairing the group is a former chief technologist of the Federal Communications Commission. CNET reports that the formation of the group signals a political dĂŠtente between the companies over net neutrality, as well as a bypassing of Washington regulators. By CNET
Online PlayStation 3 gamers will now have a dayâs jump on the Xbox 360 audience for new downloadable content, as the Sony-owned digital distribution network moves its release date from Thursday to Tuesday. First content to be released under the new schedule next week includes an expansion package for Activisionâs âCall of Duty: Modern Warfare 2â and a downloadable game for Sonyâs PSP device. By Kotaku
Sales at the Xbox Live Arcade, Microsoftâs digital distribution network for classic videogames and other casual titles, were up 41% year-over-year in March, with the company passing $10 million in game sales within a month for the first time. So estimates FADE LLC, a research firm focusing on digital and mobile entertainment distribution platforms.
The firm attributes the growth to Microsoftâs âBlock Partyâ promotion for Xbox Live, which touted the release of four major titles. The top seller for the month, Signal Gamesâ âToy Soldiers,â moved an estimated 209,000 digital units at $15 a piece. FADE LLC
Following Microsoftâs announcement that it has surpassed sales of 40 million Xbox 360 consoles worldwide, PC World breaks down the platformâs U.S. installed-base relative to the Nintendo Wii and Sony PlayStation 3. In the U.S., Xbox 360 still trails the Wii by some 10 million units â but it continued to maintain a nine-million-unit lead over the PS3 audience. By PC World
Bloomberg reports that former News Corp. President Peter Chernin has discussed with Microsoft the possible creation of a television channel delivered over the Xbox Live videogame network. The channel, according to the report, would offer a mix of acquired and original programming.
From the perspective of a potential audience, the proposal is certainly plausible: at last count, Microsoft had 20 million Xbox Live users, 10 million of which had logged onto non-gaming applications. But the company has not yet responded to Cherninâs pitch.
For Cherninâs part, the executiveâs publicist says, âPeter is talking to lots of people about lots of ideas in the digital space.â By Bloomberg
Research firm The Diffusion Group (TDG) finds that one-third of U.S. broadband households now use a game console that is connected to the Internet. Sonyâs PS3 tops the list with 78% of consoles being connected to the Internet, followed by Microsoftâs Xbox 360 at 73%, and Nintendoâs Wii at 54%.
The data, TDG says, supports the firmâs position that game consoles are best positioned to become the first mainstream over-the-top (OTT) video delivery platform. The Diffusion Group
At Microsoftâs recent Mix10 conference for developers, Scott Stanfield, CEO of Vertigo Software came on stage to show a prototype of Netflix for Windows Phone 7. Stanfield, who is working with Netflix on the app, showed off footage from the show âRescue Meâ streaming to his Windows Phone 7 handset. Itâs unclear whether the Netflix app will launch alongside Windows Phone 7 devices this holiday season. By the San Francisco Chronicle
Microsoft unveiled its new mobile phone operating software at the Mobile World Congress in Barcelona, introducing a range of music, gaming and networking features aimed at expanding its appeal beyond its core business customers. The worldâs biggest software company, which is trying to wrest back market share from Apple’s iPhone and Research in Motion’s BlackBerry, said new phones featuring Windows Phone 7 would be in stores by Christmas. By Billboard
Having amassed deals for Netflix streaming and video-on-demand downloads via its Xbox Live network, Microsoft is looking to play a bigger role in consumersâ TV and movie watching at home. Among the programming deals the company is currently mulling is one with Disneyâs ESPN for live streams of sporting events to Internet-connected videogame consoles, The New York Times reports.
Microsoft tells the Times that Xbox Live, which has 20 million members, regularly records more than one million concurrent users. On its face, the audience numbers put Xbox Live in league with top cable channels such as Cartoon Network and TBS. But Microsoft does not break out â and audience research firms such as Nielsen do not measure â how many users at any given time are watching movies and TV shows on demand versus playing videogames. By The New York Times
The current generation of videogame console hardware has outsold the last by more than nine million units to date, according to the NPD Group.
Overall console hardware revenues declined 13% during 2009, a year that saw significant price drops on Sonyâs PlayStation 3, the Nintendo Wii, and Microsoftâs Xbox 360. The price cuts have spurred unit sales growth, however: overall hardware sales for the month of December increased 16% year-over-year.
The month was the first in which Sony â which reduced the price of the PS3 by $100 in September, to $299 â sold more than one million PS3 consoles. The Wii, whose price fell to $199 ahead of the holidays, Â also experienced its biggest-ever sales month in December, with 3.8 million consoles sold.Â NPD
The synchronization of videogame hardware and software supply chains has become a unique operational challenge, considering the high costs and long lead times of game development, along with increasingly shorter product life cycles and shifting retail marketing strategies.
Owen Roberts oversees North American Operations of Microsoftâs Entertainment and Devices Division as General Manager. During his 11-year tenure with Mircosoft, Roberts has spearheaded the European launch of the Xbox console, and bridged gaps between the companyâs various business units and worldwide retail teams as head of the Redmond-based âWW Retail Go to Marketâ initiative.
MESA: How did the economic crisis impact supply chains in 2009, and how did you meet these challenges?
Roberts: The number one challenge was inventory management, as retailers shrank their open to buy and managed inventory down. Clearly we did not want to lose sales, so we had to engage with the retailers to ensure we had sufficient inventory on shelves. Intense collaboration between the supply chain team, sales and category marketing, and the retail buyers themselves resulted in high in stock percentages while turns increased.
Obviously this could have had a negative impact on our fulfillment costs, as we were essentially doing smaller deliveries more frequently. However by planning with our warehouses and logistics each week we were able to adjust picking patterns that ensured no cost increases.
How do you synchronize the supply chains of the consoles with games from product development to delivery to retail?
We have a function within our Supply Chain team called Launch Management. This team has a critical role for all our significant launches as they act as the one central point where all of our various functional teams â Manufacturing, Planning, Sales, Retail Ops, Distribution, Trade, etc. â come together as frequently as necessary to ensure the flawless launch of both software and hardware across the channel.
The key is frequent good communication and the ability of our launch team to have a 360-degree view of having the right product on shelf at the appointed date. Some of the volumes we are moving are staggering at times, thus tight coordination is critical across all elements of our supply chain.
We of course also avail of Microsoft Project a great deal, as there is no better tool to ensure we have identified the correct critical path of every launch.
How do you integrate retail distribution with online and digital delivery of videogames?
Right now I would say we are at the beginning of this journey. Clearly the conundrum we all face is how to optimize for our customers in such a way that enables all channels to be effective and efficient. Microsoftâs stated objective is to be the leader in connected entertainment â another way of thinking about this is three screens connected in the cloud. With that as our guiding star we need to collectively figure out how we deliver content, services and subscriptions wherever and however the consumer would like to consume it.
We need to be able to offer choice to our customers â where they buy and how they buy. My biggest focus right now is ensuring we have the correct infrastructure to identify and recognize a customer no matter what channel they elect to buy through. At the end of the day they are a Microsoft customer and we need to ensure their buying and consumption experience is best in class, thus ensuring a loyal and valuable long-term relationship.
Tell us a real-life story from your own enterprise about how the supply chain performed well (or poorly) and what lessons you learned.
This year we made some significant adjustments to our supply chain supporting the Americas. At the same time, we had some very large launches including Windows 7 and the opening of our own Microsoft Stores. The â09 calendar year saw us migrate our entire Distribution and Logistics network to a new partner, CEVA Logistics. As part of this we brought up a green-field site in California that coincided with the Windows 7 launch, the peak sell in month for our Xbox business, and the MSFT stores opening on October 22nd. With perfect hindsight, it was not the smartest decision I ever made as the potential for something going wrong was probably pretty high!
That said I was blown away with how well the team performed. The key to our success was great planning and great collaboration across our supply chain teams and our IT team. We have of course planned before and collaborated before, but this time it went a level deeper.
For the first time, I saw a complete blurring of the lines between our outsource partners and MSFT. I have long strived for getting the entire supply chain team to act as one. This is hard when you outsource every aspect of the business, but I was happy to see with the right partners, the right leaders on both sides, and a common customer view just what we were able to achieve. Was it easy? No. Was it perfect? No. Was it transparent to our customers? YES, and that was really all that mattered.
We certainly over-communicated throughout the process and our senior management team worked hard to lead the huge amount of change that was necessary to ensure the successful launches.
Microsoftâs top search technology executive has all but dismissed the likelihood that the company would pay newspaper owners and other publishers for removing their content from Google and listing with Microsoftâs search engine, Bing. By the Financial Times (registration required)
The deal between CBS and Microsoft to sync CBSâs Last.fm music streaming service on Xbox Live is already bearing fruit. The companies say the partnership has already netted Last.fm more than one million new subscribers. Whatâs more, Xbox Live users have already streamed more than 120 million minutes worth of music since the service launched on the network last Tuesday. By paidContent
Seeking to bolster its Bing search engine, Microsoft has held talks with News Corp. for the media company to âde-indexâ its news websites from Google. By the Financial Times
In further integration of digital media platforms, a firmware update will bring Facebook, Twitter, and Last.fm to Microsoftâs Xbox 360 console tomorrow. Users must have an Xbox Live Gold membership ($50/year) to access the services from their console; both Twitter and Facebook require users to be at least 18 years of age. By CNET
Microsoft has banned thousands of gamers from its Xbox Live network after determining that their consoles had been modified to play pirated content. The bans are “permanent,” Microsoft tells the BBC, and render the consoles functional only for offline play. By BBC News