THQ and Nokia are collaborating on national promotion in U.S. for upcoming PS2/Xbox videogame Dark Summit, due to ship in first quarter 2002. Title will be Calabasas Hills, Cal., game maker THQ’s first game for Xbox, Mktg. Vp Peter Dille said. As part of promotion, Instant Win Game will give consumers chance to win $5,000 grand prize, Nokia 3300 series mobile phones, Dark Summit gear including hats and T-shirts. “Decoder” game piece is available at more than 2,000 retail locations, THQ said, and more than 2 million game pieces will be distributed nationwide. Consumers must visit www.darksummit.net to decode secret messages from game pieces to see whether they are instant winners. Game, running through Dec. 31, is being supported by THQ via print ads and with point-of-purchase materials including posters.
Top-renting videogame for week ended Oct. 28 was Take-Two Interactive Software’s Grand Theft Auto 3 for PlayStation 2 (PS2), Video Software Dealers Assn. (VSDA) said Thurs. Game, which earned $620,000 in its first week on VSDA’s top 5 chart, was one of 4 PS2 games on list. Only game in top 5 not for PS2 was Activision’s Tony Hawk’s Pro Skater 2 for Nintendo 64 at number 4, which earned $250,000 in week for total of $2.72 million since Aug. 23 street date. Rounding out top 5 were: Capcom’s Devil May Cry ($460,000 for week, $740,000 since Oct. 17); Midway’s Spy Hunter ($250,000, $1.17 million since Sept. 25); Electronic Arts’ Madden NFL 2002 ($220,000, $2.04 million since Aug. 14). Grand Theft was only new game in top 5.
DVD titles jumped to 20% of Hollywood Entertainment (HE) revenue in 3rd quarter as video dealer reported net income rose to $25.6 million from $18.6 million. Revenue increased to $344.9 million from $306.5 million on 11% gain in same-store sales. DVD accounted for 16% of sales in 2nd quarter and chain now carries 2,000 titles compared with 10,000 VHS releases. Rental revenue was up to $288.3 million from $262 million year, and product sales to $56.5 million from $44.4 million. In conference call with analysts, CEO Mark Wattles again said Hollywood wouldn’t rush to sign DVD revenue-sharing agreements with studios, citing $17 cost for DVD title vs. $65 for VHS. HE has DVD revenue- sharing pact with MGM and Wattles said earlier this fall that chain would have agreements with most studios by year-end 2002. Company raised target for 4th quarter same-store sales to 6-7% from previous 4-5% and pro forma net income to 26-28? from 24- 26?. It opened one store and closed 7 in quarter to end with 1,809. Hollywood has no plans to add new stores in 2002, largely because it’s required to reduce debt below $100 million from $445.8 million at quarter’s end. It also is working to reduce annual sales gap between stores one to 3 years old and its older outlets. While HE’s average annual per store sales are $750,000, those less than 3 years old (716) are at $633,000, Wattles said. Newer stores were “underserved” by previous HE management in “last couple of years,” said Wattles, who co-founded chain, but left it in late 1990s and returned as CEO last Aug. HE has no immediate plans to join rival Blockbuster in offering services outside rental/sales business such as pay-per-view movies but Wattles said it was capable of providing other services without “cannibalizing” its existing business, although such plans were “2003 issue.”
Lawsuit over copy-protected CD has been filed against BMG Entertainment in Germany, source there told us. Details were scant at our deadline, but suit concerns CD compilation Just the Best 04/2001 that’s said to be copy protected but not labeled as such. Suit is said to charge BMG with fraud, computer fraud and copyright misuse. Computer fraud claim is based on violation of CD Red Book standard under German law, which prohibits damage to “the property of someone by affecting the result of a data processing proceeding, by incorrect design of a program or use of false and incomplete data.”
Ubi Soft Entertainment expressed confidence Wed. about 2nd half of its fiscal year, saying that despite “uncertain economic climate… the videogame industry remains dynamic due to the fast growth of the new machine installed base.” Paris-based game maker said it planned to ship “over 100 new games between now and March 22, 61 of them in the 3rd quarter” (Oct.-Dec.) across all platforms and genres. Company said: “By the end of the current fiscal year, the group will have added another 160 titles to its catalog, 30 of them PlayStation 2 (PS2), 5 for GameCube (with 2 titles at the console’s launch in the U.S.A., Disney’s Tarzan Untamed and Batman: Vengeance), 3 for Xbox and 30 for Game Boy Advance” (GBA). In addition to 2 U.S. GameCube titles, Ubi Soft said other games showing “particular promise” included Rayman Arena and Tom Clancy’s Ghost Recon. Company made comments as it announced 2nd quarter consolidated sales increased 24% to 53.1 million euros ($47.8 million) from 42.9 million euros ($38.6 million) in same quarter year ago, while first-half sales improved 72% to 113.4 million euros ($102.2 million) from 65.9 million euros ($59.4 million). Game maker said it published 46 new titles in first half of its year -- 6 more than same period year ago. While PC games represented 50% of first-half sales, GBA generated 21% of revenue. Best-selling titles included Myst III: Exile, of which “more than 750,000 copies were sold worldwide,” Ubi Soft said. On geographical basis, N. America contribution to company’s sales doubled from first half year ago, accounting for 40% of sales as result of what company said was “success of [its] acquisitions and of the distribution strategy for this geographical area.” Ubi Soft added: “The good performance in the first half of the year, which normally does not exceed 30% of Ubi Soft’s business for the year, combined with the quality of the future portfolio of games, allows the group to confirm its targets for the 2001/2002 fiscal year: 35-40% increase in sales [and] net margin of between 4 and 5%.” Company plans to report first-half earnings Dec. 14.
N.Y. metro CE retail chain The Wiz said Wed. that panel of judges led by Little Steven of Bruce Springsteen’s E Street Band selected grand prize winning band from 655 garage rock bands that entered Cavestomp Garage Rock Band Search. Winning band was The Priests of Rochester, N.Y. Contest, sponsored by Cablevision’s retail chain subsidiary, was started in July and 43 store locations participated. In addition, 18 finalists will be announced later this month whose music will be included on compilation CD to be sold at Wiz stores in Dec., chain said, with proceeds from sale of CD to be donated to charity supporting World Trade Center Relief efforts.
Federal court ruled Mon. that AOL probably committed copyright infringement by using and distributing computer software owned by PlayMedia Systems without latter’s audio player “WINAMP.” In Oct. 29 order granting preliminary injunction against AOL, U.S. Dist. Judge Howard Matz, L.A., said PlayMedia was likely to succeed in proving that: (1) AOL exceeded terms of license given by PlayMedia to Nullsoft -- company later acquired by AOL -- for AMP software that decoded digital audio files compressed in MP3 format. (2) AOL, even if it were using AMP source code in conjunction with WINAMP, violated licensing agreement by sublicensing AMP in object code form other than for use in conjunction with WINAMP only. (3) PlayMedia had suffered irreparable injury and was entitled to injunctive relief. AOL reportedly has said it will seek stay of injunction and appeal it.
DVD+RW group is weighing response to statement by DVD Forum’s DVD Format/Logo Licensing Corp. (DVD FLLC) disavowing responsibility for recording format, senior executive at DVD+RW backer Philips told us. “Important Notice” from DVD FLLC was posted on its Web site that distanced itself and DVD Forum’s DVD- RAM and DVD-RW standards from proprietary DVD+RW recording system (CED Oct 19 p1). “We were a little bit amazed by such an extensive message. Is it possible the DVD FLLC gets inquiries from the public?” asked Chris Buma, Philips program mgr.-A/V disc recording, raising question about intended audience for DVD FLLC’s advisory.
R.C. Willey opened 130,000-sq.-ft. store in Henderson, Nev., marking entry into Las Vegas market. Salt Lake City-based chain, which plans up to 3 stores in Las Vegas area, is likely to open 2nd outlet in Summerlin, Nev., in 2003, Vp Steve Child said.
Prima Games secured exclusive rights to create, publish and distribute official strategy guides for 4 titles from id Software, Sega of America, 3DO. Company said titles were Heroes of Might & Magic IV, Might & Magic IX, Return to Castle Wolfenstein, Virtua Fighter 4.