Inside Perfect World Entertainment

North American gamers probably aren’t too familiar with Perfect World Entertainment, beyond their association with Runic Game’s Torchlight and the handful of Asian MMOs the company is trying to bring to North America. But this seemingly small MMO company is really quite big in China and analysts that pay attention to the sector (and like to invest money) have got their eyes all over Perfect World, despite its challenges - in China, of course.

Perfect World Co. Ltd. went public roughly 4 years ago and has beaten earnings estimates for most of its existence, carving out its own little niche in the lucrative online gaming space in China. Perfect World is no small player either, with a $2 billion market capitalization and a long-term plan to have a global presence - hence its North American and European operations. In the latest quarter the company raked in $86.4 million in revenue, compared to $55.9 million the same quarter last year. That’s pretty amazing for a company most North American gamers know nothing about.

But the company, like many others that have a business model that relies heavily on the lucrative Chinese MMO market, faces some serious challenges. Those challenges include government oversight and possible censorship of content, a rather crowded field of competitors (CDC Games, Shanda Games, The9, NetEase, etc.) and an unknown level of growth in China. Here and in places like Europe it faces the challenge of getting Western gamers interested in MMOs that are decidedly Asian in style. One secret weapon the company has is the upcoming Torchlight MMO, which will also serve the Chinese market if it can get by the Chinese Ministry of Culture.

In North America the company has 3 free-to-play MMOs in operation (Ether Saga Online, Perfect World International, and Jade Dynasty) as well as Runic Games single player action RPG, Torchlight. You can learn more about the company and all these games by visiting perfectworld.com.

JPR predicts PC gaming hardware will reach $27 Billion in 2010

According to Jon Peddie Research, PC gaming hardware will reach $27 Billion in 2010 and the results are (of course) better than previously expected. The worldwide PC gaming hardware market (which includes PC systems, accessories, and upgrades) is forecasted to gain $1.2 billion for 2009, which is a 5.9% increase versus 2008 (from $20.07 to $21.26 billion). The increase is due to higher than anticipated consumer demand for enthusiast, performance, and mainstream hardware - strongly influenced by the ability to play video games.

Due to what JPR says, significant growth across all major markets in the worldwide PC gaming hardware sector are expected to climb 30 percent in 2010. Senior Video Game Industry Analyst at JPR, Ted Pollak, credits this growth to a number of key factors:

“The largest influence on the high forecasted growth rate is due to purchasing delays for systems and upgrades in 2008/2009 as consumers circled the wagons and took a conservative position on discretionary spending. A recovering economy, processing advancements, and higher quality gaming offerings will all contribute to a healthy year for PC gaming hardware in 2010.”

“The PC gaming market continues to be the high growth, and technological leader for home entertainment. With Windows 7 and DirectX 11, advanced and exciting physics, and stereovision capabilities, the PC platform is far and away the most advanced,” noted Jon Peddie President of Jon Peddie Research. “And, the PC has the added advantage that when not used for gaming, it can be used for more practical purposes, and/or as a media center.”

The data comes from the Worldwide PC Gaming Hardware Market report series by Jon Peddie Research. It comes in three very expensive flavors: Enthusiast, Performance, and Mainstream versions, with each version selling for $5,000 and the set of three for $12,000. Find out more about it by visiting www.jonpeddie.com.

Top Selling Digital Downloads

The top selling game on Steam was Call of Duty: Modern Warfare for the week of Nov. 14, 2009, but over on Direct2Drive where it wasn’t available, various versions of Dragon Age: Origins were selling like hotcakes - whatever that means. I mean, who are the people buying and selling hotcakes and why are they so f**king popular?

Dragon Age is doing pretty well on Steam, Direct2Drive and even on Stardock’s Impulse. 2K Games’ Borderlands is in a respectable position as well, followed by the wonderful indie RPG Torchlight - which doesn’t seem to be available on Impulse for some reason. Come on Stardock, this game is awesome. Complete top ten charts, without any actual sales numbers, below. Sure it’s mostly anecdotal, but it’s fun to look at top ten lists, right?

Steam

1. Call of Duty: Modern Warfare 2
2. Dragon Age: Origins
3. Dragon Age: Origins Digital Deluxe Edition
4. Borderlands
5. Overload Complete Pack
6. Torchlight
7. Crysis / Crysis Warhead Bundle
8. Football Manager 2010
9. Mass Effect
10. Counter-Strike: Source

Direct2Drive

1. Dragon Age: Origins
2. Dragon Age: Origins Digital Deluxe Edition
3. Borderlands
4. Dragon Age: Origins Digital Deluxe Edition (with strategy guide)
5. Torchlight
6. Best of Indie Bundle Vol. 2
7. Tropico 3
8. Civilization 4: The Complete Edition
9. Call of Duty 4: Modern Warfare
10. Fallen Earth

Impulse:

1. Demigod
2. Sins of a Solar Empire: Entrenchment
3. Tropico Reloaded
4. Dragon Age: Origins Digital Deluxe Edition
5. Dragon Age: Origins
6. Sins of a Solar Empire
7. Gratuitous Space Battles
8. Fort Zombie
9. Hacker Evolution
10. For the Glory

Source: Impulse, Shacknews

Call of Duty: Modern Warefare 2’s $550 million milestone

Despite the controversy (or perhaps, because of it) surrounding Activision Blizzard and Infinity Ward’s Call of Duty: Modern Warfare 2 continues to break sales records. Modern Warfare 2 has set a new worldwide estimated five-day sell-through record of approximately $550 million, according to internal Activision estimates.

Modern Warfare 2’s launch beat all previous first-and five-day entertainment industry box office, book and video game sell-through records set by Harry Potter and the Half-Blood Prince film ($394 million), The Dark Knight film ($203.8 million) and the previous record set by Grand Theft Auto IV (6 million units, $500 million) - just to name a few.

Modern Warfare 2’s success also extends to Xbox LIVE, where more than 5.2 million multiplayer hours were logged playing Call of Duty: Modern Warfare 2 on the first day alone. More than 2.2 million unique gamers played Call of Duty: Modern Warfare 2 in one day on November 10th - a new one-day record for Xbox LIVE.
Finally more than 11 million achievements were unlocked on Call of Duty: Modern Warfare 2 on the first day.

Love it or hate it, Modern Warfare 2 is kickings a$$ and cashing checks.

Confirmed: EA guts Pandemic

 Update: A Shacknews report confirms that EA has cut a large potion of the workforce at Pandemic, but says that it  is not getting rid of the studio, - it is  consolidating it into a “core team” and moving it to EALA. Here’s what EA said officially:

“Pandemic Studios and its franchises will be relocated to the EALA facility in nearby Playa Vista,” a rep for the company told Shacknews. “This move has resulted in a reduction in the work force at Pandemic…That said, the Pandemic brand and franchises will continue to live on. A core team of Pandemic developers will move to EALA and continue development on Pandemic games with a focus on quality, cost management and schedule integrity.”

Original Story: Is the other shoe about to drop for Panedemic’s L.A. studio? According to this Kotaku report, citing reliable sources close to the situation, EA will lay off most of Pandemic’s Los Angeles studio at 11 AM PST. The Saboteur, the current project being developed by Pandemic will  be shifted to Army of Two developer EA Montreal - also according to the Kotaku report.

Pandemic’s Brisbane studio, which was developing a game adaption of the latest Batman film, The Dark Knight, was cut loose from the EA family in January of this year. Pandemic is best known for developing such franchises as Full Spectrum Warrior, Mercenaries, Star Wars: Battlefront and Destroy All Humans.

If this rumor is true it means that most of the 200 people that work at Pandemic L.A. will be out of work right before the holidays, which is absolutly horrible, but a typical move by corporations in the fourth quarter. Earlier in the month EA laid off a large number of employees from its Maxis studio. No doubt EA will be making cuts across the board as it tries to hit the restructuring number of 1500 before the next fiscal quarter in March 2010.

We’ll have more on this story as it develops and hopefully an official confirmation or denial from EA soon.

EA posts Q2 loss, plans massive layoffs

Imagine how it must feel to hear that EA has acquired Playfish, a social game development company, for a possible total of $400 million USD and then in the same breath that you are losing job. That’s what some EA employees might be hearing (or have heard) today as EA reveals its abysmal second quarter results and a series of planned layoffs.

Electronic Arts said Monday that its loss widened in the second quarter and that it plans to lay off around 1500 employees, or about 17 percent of its global workforce. This would happen before April 2010, the velocity of those layoffs is an unknown at this time; for all we know they have already begun..

In the second quarter EA posted a net loss of $391 million, or $1.21 a share - a 26 percent increase over the same period a year ago. Net sales saw a 12 percent decline to $788 million in the second quarter as well. Sales, including deferred revenue from online games, did grow 2 percent to $1.15 billion during the quarter, but obviously it was not enough to pull Q2 into the black.

It must hurt those employees to hear that This morning EA announced that it had committed to purchase the outstanding assets of Playfish, one of the largest social game development studios on Facebook (and other platforms), for a total of $400 million USD (see this news story for a break-down). EA said that these layoffs, 1300 of which are part of a restructuring plan that was already in place, will be completed by March 31, 2010. According to the company, this plan will result in annual cost savings of at least $100 million and restructuring charges of $130 to $150 million.

Looking to the next quarter, EA predicts GAAP net revenue to be between $3.6 and $3.9 billion; Non-GAAP net revenue is expected to be $4.2 to $4.4 billion; GAAP diluted loss per share is expected to be between $1.20 and $2.05; Non-GAAP diluted earnings per share is expected to be between $0.70 and $1.00; and return to profitability in Q3 and Q4.

Activision Q3 Profits up on Guitar Hero, Call of Duty

Activision Blizzard announced a profit for the third quarter, thanks to two important events: a reduction in costs and strong sales of titles like Guitar Hero 5. Shares rose 2 percent in afternoon trading on the news. The company also predicted lower fourth quarter numbers than what Wall Street expected, despite the pending release of Call of Duty: Modern Warfare 2, which ships next Tuesday.

For the third quarter, Activision reported a net income of $15 million - 1 cent per share - compared with a net loss of $108 million - 8 cents a share, for the same period a year ago. Net revenue dipped 1 percent in Q3 to $703 million. Excluding revenue that was deferred from the sale of certain titles, the company said revenue for the period would have been right around $755 million.

In the quarter Activision Blizzard increased its U.S. and European share 1.2 points over the previous year across all platforms to 12.3 percent and had two of the top-10 best-selling titles in the U.S.: Guitar Hero 5 and Guitar Hero World Tour, according to retail sales data from NPD Group (U.S.) and Charttrack and Gfk (Europe).

The top selling games for the quarter were Guitar Hero 5, Marvel: Ultimate Alliance 2, and older versions of Guitar Hero, Call of Duty and - of course - World of Warcraft.

For the fourth quarter, Activision is predicting earnings of 43 cents a share on revenue of $2.22 billion, on a non-GAAP basis. Analysts were expecting earnings of 44 cents a share on revenue of $2.3 billion. The fourth quarter will include the release of Modern Warfare 2, Tony Hawk: Ride, DJ Hero and Band Hero.