So long, Cyber Monday?

Need a lift? Online retailers continue to rely on Cyber Monday to give holiday sales a boost. Credit: Dan Hontz via Flickr.

As long as there has been e-commerce, there has been Cyber Monday. But is that old gem of the new economy endangered?

Online retailers for the last decade have counted on the Monday after Thanksgiving to deliver for Web merchants what Black Friday does for bricks-and-mortar stores -- a turbo boost into the holiday shopping season. Back then, many people hopped onto their employers' fast Internet connections to do some quick holiday shopping when they returned to work after Thanksgiving.

But with more than 60% of U.S. homes now sporting high-speed Internet, more people are now flipping through those online catalogs at home, said Ken Cassar, vice president of Nielsen Co.'s online research division.

As a result, more online stores aren't waiting until Monday to get the party going. They're throwing their own Black Friday events. Some, including Amazon.com, are doing deals every day this week.

That doesn't mean Cyber Monday will evaporate, however. That's because some people still shop at work, away from the prying eyes of family members. "Mondays still tend to be busier shopping days," Cassar said.

It's also a good marketing hook that retailers want to keep alive.

"Retailers liked the marketing focus," Cassar said. "It remains a big shopping day, but it's now fueled more by retailer marketing and promotion."

That means online merchants will be out in force trumpeting Cyber Monday specials.

More merchants say they plan to offer some type of promotion such as free shipping or extra discounts on Monday, 87% compared with 83% last year, according to a survey by Shop.org, the online division of the National Retail Federation. Check out Shop.org's Web page listing Cyber Monday specials offered by 650 of its member merchants.

The shipping promotions are likely to come with fewer...

Google teams up with TiVo to give advertisers a clearer picture

Google and TiVo have been responsible for a good deal of anxiety within cable and network television circles. Put both together in the same sentence, and you have the potential need for some serious psychotherapy.

Yes, the two Silicon Valley companies are teaming up. Google, which sells television and online ads, today said it agreed to subscribe to TiVo's user data.

Here's where the fear and loathing come in. Google promises that advertisers pay only when their ads are seen. But TiVo lets viewers fast-forward through commercials. Now, with TiVo's data, collected from millions of digital video recorders across the country, Google can tell exactly which of those commercials are being bypassed. If all the commercials are being skipped, the channel gets no money. It's easy to see why TV executives get heartburn over this.

Google currently has an agreement with EchoStar to sell ads on its Dish Network and collect similar data from the satellite TV company's subscribers.

Information is the stock and trade of Google, which distinguishes itself by its ability to tell advertisers how often their ads are seen. On the Internet, that's a relatively trivial trick to tally up "clicks" or "impressions." But that's harder for television.

"In general, the feeling is that TV needs more accountability for the audience it is delivering to advertisers," said Todd Juenger, vice president of TiVo's 4-year-old audience research business, said in an interview. "Right now, TV is kind of fuzzy. It is such a powerful medium, but it suffers from a lack of tools to measure its impact. We help to provide those tools."

Today, the 800-pound gorilla is Nielsen Co., whose TV show ratings determine how much networks can charge for ads on certain shows. But Nielsen focuses on how many people watch a given show.

Google, however, wants second-by-second feedback on whether people are watching ads and who is watching them. Through its deal with EchoStar, Google already processes more than 1 billion channel clicks a day to determine whether a client's ads are seen, at least by satellite TV customers.

"Now we have TiVo data to add breadth and depth," said Mike Steib, director of emerging platforms at Google.

Steib and Juenger are cautious to add that the data are "anonymized," so Google and advertisers cannot trace viewing behavior back to any individual.

They also argue that networks have little to fear. About 3 in 10 companies that buy TV ads through Google have never advertised on TV before, Steib said. "Our system makes it easy for people to buy TV ads," he said. "We're lowering the barriers to entry, which has the effect of growing the market."

Juenger delivered a similarly soothing message: "More and more marketing dollars are being directed to Internet and search largely because of the accountability those mediums offer. If you are confident that you’re getting what you’re paying for, you’re more inclined to pay. To the extent that we can do that for TV, that ought to stimulate demand."

In this economy, TV executives are likely to embrace anything that stimulates demand. Even Google and TiVo.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Image courtesy of Dan Hontz.

Twitter adds business model

Feeding the Twitter bird. Credit: wharman via Flickr.

The twitterati today are aflutter about a few crumbs that Twitter Chief Operating Officer Dick Costolo dropped during an interview with TechCrunch's Michael Arrington on how the microblogging service plans to make money.

With millions of people, organizations and businesses now using the service, there is keen interest in keeping the little blue Twitter bird alive. The question has always been: How?

Costolo today supplied a partial answer: Ads. But these won't be your father's Chevrolet ads. Twitter ads will be "fascinating," "non-traditional" and "really cool," Costolo said. "People will love the ads when they see it."

Another potential source of revenue: Charging customers who want to see their Twitter data, such as how many people click on the links and who's following whom. In industry parlance, such data are called analytics, and they give users an idea of which of their tweets are more effective at reaching an audience and whether readers are acting on those tweets.

Costolo dropped another morsel when he singled out Foursquare's Dennis Crowley as a "genius." (Foursquare lets users broadcast their geographic location, along with what they are doing: "In Century City, looking for good Indian food.")

How does this fit in with making money? Costolo didn't say. But the ability for advertisers to know where people are and what they are in the mood for is incredibly valuable.

With $155 million in venture funding, Twitter isn't in a huge hurry, but Costolo promised that the ads will be rolled out in 2010.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Pogoplug: A new device for new lifestyles?

The new Pogoplug. Credit: Cloud Engines.

One way to score a big hit in technology is to come up with not just a new gadget, but a new category. Of course, that is also a recipe for failure, because there's a risk that consumers don't think they need what you're selling.

That's the risk for Cloud Engines, a San Francisco company that makes something called the Pogoplug. They're calling it a "multimedia sharing device," in the hopes that people are looking for an easier way to share all the videos, photos and music that are now defining their digital lives.

The Pogoplug sells for $129. You plug it into your router, and then you plug a storage device -- like an external hard drive or a flash drive -- into it. You have then created what company Chief Executive Daniel Putterman calls "your personal cloud." Given the way the "cloud computing" buzzword reached the stratosphere this year, he may be onto something.

The sharing part comes in letting you give anyone access to your stuff without your ever having to upload it or e-mail it.

Engadget liked an earlier version of the product but wished it had Wi-Fi and ports for extra devices. Today the company announces the extra ports, but still no Wi-Fi.

And I can report that photos and material shared with me from a Pogoplug device worked seamlessly, like looking at any website.

-- Dan Fost

Tony Hawk is back in the game with Ride

 

Tony Hawk, the renown skateboarder who landed the notoriously difficult "900" maneuver a decade ago at the X-Games, next Tuesday comes out with Ride, the latest title in the blockbuster video-game franchise that bears his name.

This time, the 41-year-old is adding a new trick to his virtual routine — a skateboard controller that looks like the real thing -- but without the wheels. Loaded with high-tech sensors, the controller gets players off the couch and doing flips on the floor. Hawk gives a demo that you can watch by clicking on the video above, composed by Times videographer, Don Kelsen.

Will it be enough to revitalize the 10-year-old series?

Hawk’s past titles have sold about 43.5-million units worldwide, generating more than $1.5 billion dollars in sales for its publisher, Activision Blizzard, according to market research firms NPD Group and GfK Chart-Track. But sales and critical scores slipped for the last two iterations, Tony Hawk's Proving Ground and Tony Hawk's Project 8.

So, two years ago, both Hawk and Activision decided to take a different path. They switched from the franchise’s longtime developer, Neversoft Entertainment in Woodland Hills, to Robomodo in Chicago. And they added a sophisticated controller.

Hawk, whose home in Encinitas, Calif., has a custom-built 4,000-square-foot skate park, spoke with us today about his latest title and whether he thinks players will spring for the $120 game when it comes out on Tuesday.

Here’s an edited version of the interview.

Tell me about what you went through to create the skateboard for the game.

We have a graveyard of prototypes. The first version was a blank skateboard with the equivalent of a Wii remote. We tried roller balls that you could slide your foot on and digital compasses that can tell which direction your board is pointed in. We also tried adding a camera. We also had a board with buttons that you could step on, like with Dance Dance Revolution.

With one of our first prototypes, I tried to do a kick flip on it. It’s a maneuver where you jump in the air and make the board do a full rotation. The board snapped in half.

How does the skateboard controller compare with the Wii Fit Balance Board?

The Balance Board only measures weight distribution. Our controller captures every motion. Every time you...

Video game sales suffer 19% drop in October

Game sales drop for the seventh month this year. Credit: Mykl Roventine via Flickr.

Ouch! Sales of video games and consoles in the U.S. fell 19% in October compared with the same month last year, putting the industry on the path for a decline in 2009 sales over last year, NPD Group said this afternoon.

"The industry is on track to generate full-year revenues in the range of $20 billion to $21 billion in the U.S., which would put it just below last year's sales of $21.3 billion," said NPD analyst Anita Frazier.

As for the holiday season, which in past years is when game companies rack up as much as 40% of their sales, it seems people are becoming nervous as they watch the unemployment rate hit double digits. According to NPD's Economic Tracker survey, consumers' "personal outlook continues to erode."

If October is any indication, the industry may be headed for a grisly holiday. Console sales crashed 23% to $380.7 million, compared with last year's $497 million. Game software sales fell 18% to $572.7 million, down from $698.4 million a year earlier.

"You're seeing the effects of the recession," said Michael Pachter, an analyst with Wedbush Morgan Securities, who two weeks ago predicted that U.S. game sales would be down 5% this year.

Sales of music-based games, such as Beatles: Rock Band and Guitar Hero 5, have lagged behind last year's numbers as the beat begins to fade for some, Pachter said.

With mainstream players, the heroes of last year's soaring sales, missing in action this year, guess who's riding to the industry's rescue? It's hard-core gamers. Yes, those insane enough to stand in line for hours to be the first to get their hands on games like Call of Duty: Modern Warfare 2.

The Activision title, a gritty combat game that's not for the faint of heart, took in $310 million during its first 24 hours of going on sale Tuesday in the U.S. and Britain. It's on track to bring in more than $1 billion in retail sales worldwide within a few months of release, according to a report by Lazard Capital Markets, putting it in the same entertainment blockbuster league as the movie "Titanic" and the album "Thriller."

October's results also confirm the reliability of avid gamers in tough times, with three of the top titles squarely in the hard-core category and another four spots going to sports titles generally purchased by loyal fans. To see the top 10 titles, click on the "continue reading" link below.

Electronic Arts slashes 1,500 jobs [Corrected, Updated]

Electronic Arts today said it will cut 1,500 jobs by the end of March, or more than 16% of its workforce, the vast majority of them through a restructuring plan aimed at saving the company $100 million a year.

The video game publisher announced the cost cuts even as it proposed to pay as much as $400 million to acquire Playfish, a London-based developer of free-to-play games for social networks such as Facebook and Bebo.

“We are making tough calls to cut costs in targeted areas and investing more in our biggest games and digital businesses,” EA Chief Executive John Riccitiello said in a statement.

Though EA did not release details of where the layoffs would occur, EA Chief Financial Officer Eric Brown said research and development would be hardest hit, since that represents the bulk of the company's employee base. Even studios with established game franchises will be hit. EA's Tiburon Studio in Florida, which makes the Madden NFL games, will see 51 jobs go, or 8.5% of the studio's roughly 600 workers, according to the Orlando Sentinel.

The dual moves, one aimed at trimming expenses and the other at boosting EA's future cash flow, were announced amid a report that its quarterly revenue was up 2% on a non-GAAP basis to $1.1 billion during the second quarter ended Sept. 30. Net income of $19 million was up from $20 million loss a year earlier.

On a GAAP basis, which defers a portion of revenue for games that can be played online, EA's sales fell 13.5% to $788 million. Net loss widened to $391 million, up from $310 million a year ago.

EA's shares, which closed up 53 cents to $19.53, see-sawed in after-hours trading following the earnings release.

Corrected, 1:53 pm: An earlier version of this post incorrectly reported a net income of $20 million in the second quarter of last year. In fact, EA lost $20 million that quarter.

Updated, 5:27 pm: This post has been updated to reflect current stock price and details on layoffs at EA's Tiburon Studio in Florida.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

EA buys Playfish for $400 million, jumps into social games

Electronic Arts, looking to jump into the exploding market for games on social networks, this morning said it has agreed to buy Playfish in a deal valued at $400 million.

The transaction calls for $275 million in cash, plus $25 in retention bonuses for executives of the tiny London-based developer of games such as Pet Society and Restaurant City. It also includes up to $100 million in bonus payments should Playfish meet certain, undisclosed financial targets.

Playfish, a privately held company, does not release its financial data, but has said the venture is "substantially profitable," so much so that it has not touched the $21 million in venture money it raised in its last round of funding.

With just 125 employees, Playfish has focused on a lean operation with fewer than a dozen games played on popular social networks such as Facebook, MySpace and Bebo. Though rudimentary, the games have attracted hundreds of millions of players. The fact that they are free to play is part of their appeal, but so is their social nature and the fact that players can pull their friends into the games.

EA, based in Redwood City, Calif., has been expanding its reach into free-to-play online games that make money by charging small amounts for extra features.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Windows 7 sales topped Vista in first weeks, but economy still a drag on PC sales

It wasn't a high bar, but Windows 7 made it.

Consumer retail sales of Microsoft's newest computer operating system topped those of Vista by 234% on a unit basis within the first few days of launching on Oct. 22, according to a report released this morning by the NPD Group. (The report did not include sales to businesses and large organizations.)

That Windows 7 would do better than Vista is not too surprising. Critical buzz for Windows 7 was relatively positive and largely void of the savage language that reviewers heaped on Vista when it launched in January 2007.

This time around, Microsoft also attempted to woo reluctant buyers with discounts and specials, such as a 50% discount on a copy of the software when buyers spring for a new PC, or a free upgrade from Vista for those who bought a PC after June 26.

"We definitely saw the results of aggressive pricing," said Stephen Baker, NPD's computer software analyst. 

Though helpful for pushing volume, the discounts may have crimped Microsoft's overall revenue from the product. (The NPD report is mum on the sales impact on Microsoft's topline.)

The fly in everyone's ointment, of course, has been the economy. With consumers making do with their old computers or opting for ultra-cheap netbooks, average PC prices have dropped around 20% since last year, Baker said.

While unit sales of Windows 7 software were up in the first days of launch over Vista, sales of computers with Windows 7 were actually down 4% compared with sales of Vista-based computers when Vista launched. The comparison is not a fair one, Baker cautioned, because Vista launched in a January, when PC sales tend to do better, and Windows 7 launched in October, one of the slowest months for PC sales.

Still, the gruesome economy may have helped Windows 7 sales in one respect, according to Richard Shim, a PC analyst with IDC.

"Usually upgrades are not very popular. People have tended to buy new PCs when new operating systems come out," Shim said. "Windows 7 seems to be an exception. One reason is that it can work well with older computers because it's designed to be streamlined."

In other words, instead of spending $500 for a new computer, some consumers are springing for the $120 to $220 Windows 7 upgrade and souping up their old machines.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Activision CEO forecasts flat industrywide game sales for holiday quarter

Activision CEO Robert Kotick. Credit: Lori Shepler / Los Angeles Times.

Video game sales this holiday aren't likely to top last year's, said Robert Kotick, chief executive of Activision Blizzard Inc., the world's largest video game software company.

"If the consumer materializes and spends money, we'll do well," Kotick said in an interview today. "If not, things will be a challenge. And today, you really have no way of knowing what will happen. Shopping season hasn't kicked off. Consumers saw significant discounts last year after Black Friday, and they're waiting for it to happen again this year."

Kotick's sober remarks came just before the company released its third-quarter earnings report. Although sales were down 1% to $703 million, Activision swung into a $15-million profit, up from a $108-million loss in the same quarter last year. It earned a penny a share in the quarter ended Sept. 30, compared with an 8-cent loss a year earlier. The numbers beat Wall Street expectations on a non-GAAP basis.

Activision -- anchored by a trio of blockbuster franchises including Guitar Hero, Call of Duty and World of Warcraft -- has been better prepared to weather the economic storm that has eroded software sales and dampened consumer's appetite for game consoles and other consumer electronics.

This quarter, the Santa Monica-based game publisher released DJ Hero last week, followed by Band Hero on Tuesday. Upcoming titles include Call of Duty Modern Warfare 2, due out next week, and Tony Hawk Ride on Nov. 17.

More after the company's earnings conference call with senior executives.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.