Nintendo sued over patent infringements

Not a lot of detail available yet, but tech company Hillcrest Labs is suing Nintendo for patent infringement related to the Wii motion controllers, and is seeking to block the Wii's import into the U.S.

CE Pro: Nintendo Sued Over Wii Patents, Hillcrest Labs Seeks to Block Imports

Hillcrest's patents at issue are U.S. Patent Nos. 7,158,118, 7,262,760, and 7,414,611, which relate to a handheld three-dimensional pointing device, and U.S. Patent No. 7,139,983, which relates to a navigation interface display system that graphically organizes content for display on a television. Since 2001, Hillcrest Labs has pioneered technology that allows consumers to interact with digital media on television using motion-control and pointing techniques. The company holds 29 patents in this area worldwide, and has filled for more than 100 related patents.
Leading consumer electronics companies, not all of whom have been disclosed publicly, have already licensed Hillcrest's technology for use in their products. While Hillcrest Labs has a great deal of respect for Nintendo and the Wii, Hillcrest Labs believes that Nintendo is in clear violation of its patents and has taken this action to protect its intellectual property rights. Given the current status of the filings, the company will not disclose any additional details about the matter at this time.

Regardless of any other considerations, the plaintiff took their time before filing this suit. I wonder if the delay was due to the need to reverse engineer the Wii controller in order to identify whether or not their patents were infringed upon, or if they wanted to wait and see how much money would be on the table before bringing suit.

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Nintendo facing some Wii hurdles this holiday season

Globeandmail.com: Wii are the champions

Retailers report they are selling out Wii units almost as quickly as they can get them, and Nintendo acknowledges it just can't keep up with demand.
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Nintendo is trying to make the units faster, but can't keep up. It has already sold more than nine million Wiis around the globe, and is now churning out 1.8 million a month.
Twice in the past six months Nintendo has boosted its sales forecast, and it now says it will ship 17.5 million Wii units in the current fiscal year that ends in March.
Ron Bertram, general manager of Nintendo of Canada Ltd., said the company is making more hardware than ever before. “We're shipping boatloads of product [but] the demand has just been extraordinary.”

BBC.com: Nintendo warns of Wii shortages

"The demand for Wii hardware globally has been unprecedented and higher than Nintendo could ever have anticipated," said a spokeswoman. "Nintendo is now in a position in which seasonality demand trends are being broken, therefore the demand for Wii hardware is constant throughout the whole year globally. Due to this phenomenon it is possible that the demand for Wii hardware may outstrip supply," she said.

Sometimes, a bigger hazard than not enough business is too much business.

However, I think that no matter how you slice it, this holiday selling season will see Nintendo as the big winner. Either Sony or Microsoft would really have to have something BIG up their sleeves to take the wiind* out of Nintendo's sails (sales?), and so far, there's been no sign that they have anything like that kind of firepower.

*sorry.

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Analysts see soft Christmas for Nintendo, even worse one for Playstation 3

There are those industry watchers who predict that the sun is setting on Nintendo's upstart dominance with the Wii.

The Retail Bridge: Is Nintendo's Run At The Top Coming To An End?

Nintendo's Wii video game console was the surprise hit of the 2006 holiday season and spent most of this year at the top of sales charts and industry reports.
But, according to a pair of analyst notes released this week, the company's stint ahead of the video game pack may soon be ending as Microsoft's Xbox 360 is expected to roll through the rest of the year.
Why? The recent release of Halo 3 has more than a little to do with it."We believe Halo 3 will spur sales of Xbox 360 consoles and Microsoft should be able to sustain this momentum with a strong release slate via-a-vis the Xbox 360," Kaufman Bros. analyst Todd Mitchell wrote earlier this week.

On the other hand, industry watchers were wrong about the Wii going into last Christmas, so go figure.

To put a silver lining on that dark clound, they also think that Playstation 3 sales will continue to suck.

And so far analysts expect Sony's Playstation 3 to be little more than an also-ran this year, still suffering from the expensive console's overall lack of compelling content.
"Sony is facing a worst-case scenario this holiday season," Mitchell said. "Not only are there fewer titles to drive PS3 sales, but problems with major releases, such as Madden NFL 08 and Lair, show developers are still having a difficult time with the platform. The loss of high-profile exclusives, such as GTA IV and Assassin's Creed, means that there is a very little to drive incremental PS3 sales."

Personally, I think that this Christmas season in CE is shaping up to be a real nail-biter!

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Nintendo spanks Sony at market capitalization, too

Bloomberg: Nintendo Tops Sony's Market Value as Wii Outsells PS3
Nintendo Co.'s market value surpassed that of Sony Corp., a company with eight times more revenue, underscoring the success of the Wii game console in outselling rival PlayStation 3.
Shares of Nintendo, based in Kyoto, western Japan, rose to a record 46,350 yen, valuing the company at 6.57 trillion yen ($53 billion), and overtaking Sony's 6.48 trillion yen capitalization in trading today. Nintendo's stock closed 0.8 percent lower at 45,100 yen.
Sony, which overtook Nintendo as the world's biggest console maker after PlayStation 2's introduction in 2000, suffered production delays and slow sales at its latest player. Wii's lower price and a wand-like controller that players swing like a sword or tennis racquet helped Nintendo widen its sales lead over the PlayStation 3 in Japan last month.
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Nintendo's sales in the U.S. have not reached their potential, spokesman Toyoda said last week. The company has in the past sold about twice as many consoles in North America than in Japan or Europe, he said.
Nintendo has so far sold about 2.37 million Wii consoles in the U.S., 2 million in Japan and 1.47 million in other regions, including Europe, since the November debut, he said.

What a topsy-turvy world we live in. First Hyundai gets the nod as top car brand for quality, and now Nintendo has eclipsed Sony for market cap. At the moment, the phrase "totally eating Sony's lunch" is metaphorical, but how long before it becomes literal?

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Nintendo a gaming company first and foremost

Not ones to get carried away with their own success, Nintendo insists that they're not getting swept up with delusions of grandeur following the Wii's runaway popularity.

Marketing Daily: Nintendo's End Game Still All About Games, Analysts Say

Interesting speculation, but Nintendo's initiatives continue to be primarily about enhancing its position in the games business--not indicators that it has media platform aspirations akin to those of Microsoft and Sony, say digital media analysts interviewed by Marketing Daily.
"Nintendo has been adamant about viewing itself as a game company, not an entertainment company," points out Michael Goodman, director of digital entertainment for the technology research and consulting firm Yankee Group. "Yes, they're building a social network, but it's more a gaming social network than a whole networking system like Microsoft's Marketplace," and most of the channels being offered through Wii are not unique in function, he says.

...

"At the end of the day, it's all about games--the rest is secondary," concurs Michael Gartenberg, vice president, research director for JupiterResearch.
Of course, Nintendo's dramatic shift in strategy and much-hailed comeback have amply demonstrated its nimbleness within its core business. And marketing savvy has been as much a part of that success as hardware.

Way to keep your eye on the ball, Nintendo!

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In Japanese market, Nintendo Wii totally outsells the Playstation 3

Reuters: Nintendo Wii outsells Sony PS3 5-fold in Japan
TOKYO (Reuters) - Sony Corp. took another blow with Nintendo Co.'s Wii game console outselling its PlayStation 3 by more than five to one in Japan last month, raising doubts over Sony's nascent earnings recovery.

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Sony sold 45,321 units of the PS3 in May, compared with 251,794 units of the Wii. In April, the ratio was four to one in favor of the Wii, according to Japanese game magazine publisher Enterbrain.

I can't help but wonder how human target Sony PR head Dave Karraker is going to spin this to look like a win for Sony.

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So What's Going On With The Playstation3?

In keeping with my propensity for only reporting on biased, anti PS3 sources, here's a lengthy tirade by a gamer, for gamers about why he thinks the PS3 hasn't achieved any significant traction.

Something Awful: Reflections On A Failing Game Console *(be aware that Something Awful is a humor site with a fair amount of content that your employer might not appreciate you surfing at work)*

In March, 2007 the PS3 sold 130,000 units. To put that into perspective the Gameboy Advance sold 148,000 units. The PS3 is basically getting beat by a fucking Super Nintendo. It doesn't take a rocket scientist to figure this one out.
When posed with the decision of what game system to buy, most gamers went with the GBA because hey, the money they save not getting the PS3 can buy a lot of weed. That's what being a smart consumer is all about. You don't need Blu-Ray and Talladega Nights to have fun. Buy the cheaper system and let the drugs do the rest. Of course this doesn't mean the Xbox 360 is making any waves. Sony and Microsoft and both getting beat by what is basically a portable Nintendo 64 with a cheap touchscreen gimmick.

I think that the author is on to something here.

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Nintendo's big gamble paid off with the Wii

Games That Sell While Others Languish
SAN FRANCISCO, Jan. 30 — Some of the video game industry’s smartest minds thought that couch potatoes wanted richer graphics and more challenging virtual worlds. It turns out that a lot of potatoes simply wanted to get off the couch.
That may be the best explanation for the growing popularity of the Nintendo Wii, the new video game system that has players jumping, punching and swinging, giving them an aerobic workout right in front of their television sets.

To be completely honest, I don't think I would have bet on consumers wanting to get off their ass and work up a sweat in front of their televisions. It's a completely counter-intuitive left-field leap. Yet, Nintendo made that leap, and are profiting from it.

In addition to the physical component of playing the Wii, Nintendo nailed down two other key drivers:

• keeping their eye on the ball, they made sure that it was fun.
• they opted out of the technological rat race. With no imperative to be the biggest, beefiest, fastest processor, or download movies, or any other secondary feature they could stay focused on the first point; just being fun.

General Patton said that winning a war required being simple, direct, and brutal. Nintendo has leapfrogged Sony and Microsoft by being simple, direct, and fun. Not just fun for hardcore game nerds, but "fun for the whole family" as the old Milton Bradley ads used to say.

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A fast and furious roundup

TWICE: CE Retailers Plumbed Pricing Depths On Black Friday
New York – Rational pricing took a holiday this past weekend.
While Thanksgiving promotions have become a national tradition, with no category more competitive than consumer electronics, the breadth and depth of CE discounting was jaw dropping on Black Friday, even by industry standards.
No brand, whether tertiary or tier one, was immune, although Panasonic, through its 42W-inch HD plasma display, was perhaps the most prominent example. The TV, a highly-rated benchmark product, hit a low of $1,000 on Friday morning at Best Buy, down $1,500 from a minimum advertised price (MAP) of $2,500 just a few months ago.
The intensity of the discounting could be traced back to Wal-Mart, which publicly targeted electronics as a promotional battleground this holiday season and was the first to break MAP on the Panasonic plasma. Looking to avoid the fate of the top toy chains, which succumbed to similar tactics by Wal-Mart two years ago, Best Buy took the gloves off by pressuring vendors to drop MAP over Thanksgiving weekend, dealers told TWICE.

Oh look, retailers who don't understand how to add value drop their pants to buy business from consumers who are so barraged by marketing messages that they don't even know what to purchase anymore. Chiseling away the value of a product that can sell on its own benefits by flogging it on price is a death spiral, and the CE industry will come to regret it, even more than they already do. If you look at the mass market shoes and apparel industry, especially ladies' wear, shoppers have been so desensitized to sale prices that department and specialty stores can't get a bite, even on a collection for the new season without at least an apparent 30% markdown.

The Times: 'Dragon' sausages burnt by trade laws
A SPICY sausage known as the Welsh Dragon will have to be renamed after trading standards’ officers warned manufacturers that they could face prosecution because it does not contain dragon.
The sausages will now have to be labelled Welsh Dragon Pork Sausages to avoid any confusion among customers.

I can't tell you how much this disappoints me. Next on the Trading Standards Ministry's hit list: Spotted Dick.

Bloomberg: Nintendo Sells More Than 600,000 Wii Units in 8 Days (reported in Dealbreaker)
Somehow Nintendo forgot that the videogame market was supposed to be a two-horse race. While Sony and Microsoft focused exclusively on battering one and another, the grand dame of the industry dropped its latest offering a few weeks ago at a price well below the new PS3. And they're selling like crazy: 600,000 units in 8 days. And the company says it can churn out 250,000 per week, to meet demand. And the crazy part; it's making money on each one. Sony's much more expensive consoles are a loss leader for the company, which hopes to profit selling $80 games. Maybe it will once again become a two horse race before long.

Ah, another gold star for competent forecasting, manufacturing, logistics, and marketing. I don't know how Dealbreaker's Joe Wiesenthal concluded that the console biz was a "two-horse race," but there is a strong sentiment right now that Nintendo will be the big winner this Christmas because they understand these key principles of the gaming biz: make it fun, make it affordable, make enough of them. The fact that the Wii doesn't download movies and television, and doesn't cure cancer doesn't seem to keep gamers from parting with their cash.

CE Pro: Sony PlayStation 3 to Research Medical Maladies
PS3 owners will be able to aid Stanford University researchers in analyzing human protein structures, finding cures for disease and more.
Cure@PLAYSTATION 3 is scheduled to launch after the PS3 becomes available globally, which means at least not until March because of delays in the European launch.
The program apparently will work similarly to projects such as Cal-Berkeley's SETI@home, which used Internet-connected computers (including my old desktop before it died) to crunch massive amounts of data in the search for extra-terrestrial intelligence.

I suppose since everyting else Sony has tried this year hasn't worked out, they might as well give philanthropy a shot.

I'm done writing about Playstation3. I just can't keep up with the increasing surreality of the actual news, let alone put a snarky spin on it. If we aren't already in the Endgame for PS3, and maybe even Sony itself, then I can't imagine how this could get any weirder. I'm tired of beating this horse. Unless Playstations start transmogrifying into hungry alligators and eating their owners, I'm going to let this whole thing go.

Canadian Business: A Supercentre excursion
CB's senior correspondent Zena Olijnyk visits the new Wal-mart mega store in Stouffville, Ontario. Her article is a refreshing and interesting read because she sees the store with a shoppers eyes, as opposed to the jaded, cynical eyes of a career retail analyst. Her insight is valuable because she can see not only what Wal-mart does wrong (and nitpicking Wal-mart is a dangerous hobby, because you then risk under-estimating them), but more importantly what they are doing right. I won't spell it out, but see if you can spot the key business drivers that other merchants could learn from.

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