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The Video Game Industry’s Summertime Blues

August 3, 2009

By Barbara Ortutay
AP
08/02/09 4:00 AM PT

Though it weathered the early months of the recession well, the video game industry has experienced major financial pain in recent quarters, and it may not be able to meet sales forecasts without cutting prices soon. It’s also in need of the kind of blockbuster titles that propelled sales in previous years, but those might not come around until the holiday season.

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Kathleen Byrnes and Justin Choi, a married couple attending medical school Apple Store Discount on Office 2008 for Mac - Home and Student Edition . Click here. at Tulane University, say US$40 is just too much to fork over for a Nintendo More about Nintendo Wii More about Wii game they might not enjoy. They haven’t bought one since last fall, when they picked up "Star Wars: The Force Unleashed."

Since then? "Nothing really interesting came out," said Byrnes, 23.

Their reluctance helps explain why this is a rough summer for the video game business. More people than ever are playing the games, but it’s been a while since a blockbuster title arrived. Consumers are watching their money more closely in the recession and managing to resist games that can cost as much as $60.

The trends came into focus Thursday as Sony (NYSE: SNE) More about Sony and Nintendo each reported console sales Download Free eBook - The Edge of Success: 9 Building Blocks to Double Your Sales are dropping. Sony posted a loss for the April-June quarter, while Nintendo revealed a large drop in its profit.

The Microsoft (Nasdaq: MSFT) More about Microsoft division that makes the Xbox 360 More about Xbox 360 said last week it lost money in the last quarter too.

"The health of the industry is terrible," said Wedbush Morgan analyst Michael Pachter.
Budging Prices?

For gamers, at least, there’s some good news: Console prices will probably come down.

Sony’s PlayStation 3 More about PlayStation 3, the costliest of the bunch, still sells for $400. Nintendo hasn’t lowered the $250 tag on the Wii since its 2006 launch — an extreme rarity for an industry that relies on regular price cuts to broaden its audience.

Despite the bad earnings results Thursday, Sony and Nintendo both reaffirmed their forecasts for the year. Pachter thinks each company "has no prayer" of meeting the target without cutting prices to lure buyers. In Nintendo’s case, that might mean keeping the Wii at $250 but throwing in more free games.

At first, it didn’t seem the recession would be big trouble for the video game business, which has managed to expand its audience in recent years and become a mainstream form of entertainment. By many estimates, the video game industry is now larger than the music business.

Sony, Nintendo and Microsoft, as well as software publishers like Electronic Arts (Nasdaq: ERTS) More about Electronic Arts and retailers like GameStop, have pitched video games as cheap entertainment. Players can get many more hours in front of a TV screen from a $60 video game than from a $25 DVD.

However, people squeezed by the economy may not have even that to spend. Many have turned to online games that are cheaper or free. Even loyal, "hardcore" gamers are being more selective instead of lining up to buy every new release, and many are trading used games among themselves.
Hit Me With Your Best Shot

They’re also waiting for bigger, better titles coming later in the year — in the holiday season, when video game companies often roll out their biggest blockbusters. With many players now expecting something close to movie quality in their games, these titles can take years and tens of millions of dollars to develop.

When the spring of 2008 brought massive hits like "Grand Theft Auto IV" and the exercise game "Wii Fit," that was an exception. "Grand Theft Auto IV" raked in more than $500 million in its first week in stores.

Last year’s big spring would have made for tough comparisons this year even in normal circumstances. However, by industry standards, the first half of 2009 has been unusually slow when it comes to top-flight game launches. Combine that with the recession, and you get one chilly summer.
Where’s the Action?

Ben Nielsen, a 29-year-old architectural designer in Portland, Ore., usually buys three or four games a year. This year he’s gotten only one: "Mirror’s Edge" for the Xbox 360. And that’s only because it was on sale, at $30.

He also has a Wii, but for that system, Nielsen said he hasn’t seen "anything compelling enough to buy, especially considering the pay cut we took at my firm earlier this year."

Byrnes and Choi might spring for the $50 "Wii Sports Resort," a recently launched follow to the "Wii Sports" game that comes with the Wii and buoyed its popularity. "Wii Sports Resort" also comes with an accessory that attaches to the Wii’s controller to make it more sensitive.

In general, though, they remain cautious. They own seven games for their Wii, and say they were disappointed with about half of them.

"With that kind of a track record," said Choi, who is 25, "we are not about to take more chances on future titles."

© 2009 Associated Press. All rights reserved.
© 2009 ECT News Network. All rights reserved.

The Next Wave of E-Tail: Considered Commerce

June 21, 2009

By Carl Prindle
E-Commerce Times
06/17/09 4:00 AM PT

E-commerce came of age by selling easily understood, easy-to-ship goods like books and CDs. However, today’s online shoppers have grown more comfortable buying — or at least shopping for — big-ticket items like furniture and large appliances through the Web. This takes e-commerce into the realm of "considered commerce," and getting it right means playing by a different set of rules. Read more

Use the Cloud, Luke: Easier Shipping Is in the Stars

June 18, 2009

By Damon Schechter
E-Commerce Times
06/18/09 4:00 AM PT

On-demand shipping and inventory management services are further leveling the field for small and medium-sized e-commerce players. Companies can shave costs and improve services to their customers by taking advantage of efficiencies made possible by the cloud. Think of it as power without the pitfalls. Read more

How Long Should Your Ecommerce Video Be?

June 2, 2009

By Anna Johnson on June 2nd, 2009

If you’re an online retailer, you’ll be interested to know about a recent study by Dusseldorf University/QVC Germany. The study suggests that the optimal length for a video explaining the features and benefits of a product is 90 seconds. Read more

eBay wins court battle against L’Oreal in UK

May 25, 2009

eBay has won a British court battle against French cosmetics group L’Oreal, which had claimed that eBay was liable for trademark infringements committed by its users. The British court has ruled that eBay cannot be held liable for the sale of bogus beauty products on its website.

There have been legal fights between the two firms on the sales of counterfeit goods on the website.

L’Oreal claims that the eBay has not taken enough steps to stop the sale of fake products that has the L’Oreal name. But eBay insisted that it does not involve in direct sales of the goods sold and just provides the trading space for the users.

Last year, eBay won a similar suit against jewelry powerhouse Tiffany, where the US District Court for the Southern District of New York, declared that eBay takes appropriate steps to remove suspected counterfeit listings as part of the company’s efforts to provide a safe and trusted marketplace.

The Colonel Sanders Story

May 6, 2009

For those of you who haven’t heard the story of Colonel Sanders…it can be very motivating. Here I offer it, as told by Tony Robbins in his book "Letters to a Friend". Enjoy!***** Read more

Preventing Duplicate Content on an E-Commerce Site from Session IDs

April 29, 2009

It’s very important for your e-commerce website to show up well in the search engines. Unfortunately, you may be fighting duplicate content issues you’ve never even heard of — issues that can cause your site to rank poorly in Google and never even be seen by searchers. If your site uses session IDs to track visitors, you need to read this article. We’ll show you the problem, and provide you with several good solutions. Read more

Got Traffic?

April 8, 2009

If you’ve an eCommerce website you understand perfectly the need to generate a reliable stream of traffic to your venue. Reliable and steady traffic means reliable and steady profits. Of course, there are many factors that come into play when you are dealing with developing and then maintaining a strong traffic flow to your website. Chief amongst these considerations is gaining the trust of prospective customers or clients when it comes to your eCommerce website. Through this article, you will be provided with an overview of tactics and strategies that you can employ when it comes to gaining the trust of prospective customers or clients for your eCommerce website. Read more

How Ecommerce stores can use articles to influence behavior

April 1, 2009

Article marketing is one of the simplest and least expensive ways to market your online store. Articles can drive traffic, build trust and establish credibility without having to sell at all. The opportunity for an article to engage, educate and influence consumers during the critical research and evaluation time is an ecommerce marketers dream. Yet, most online stores have little or no article content. Read more

Catching the Next Wave of SaaS

March 25, 2009

By Jim Frome
E-Commerce Times
03/25/09 4:00 AM PT

Software as a Service has effectively found its way into businesses of all sizes and could even be considered a mainstream technology by now. However, innovations such as SaaS take time to reach full adoption, and that adoption often comes in waves. Read more

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