The UpStream (Page 213)

Sony's CEO Kaz Hirai Maintains That Consumer Electronics Division Needs Most Help

posted Sunday Jul 14, 2013 by Nicholas DiMeo

Sony's CEO Kaz Hirai Maintains That Consumer Electronics Division Needs Most Help

Sony CEO Kaz Hirai has a lot on his plate right now. The executive announced a revival plan last year that included a purchase of cloud-gaming company Gaikai for $380 million. Now, with rumors swirling on a possible spinoff of Sony's entertainment and media division, Hirai has remained firm in saying that despite the pressure, the sinking consumer electronics division is what needs help the most.

At a conference this week, Kaz Hirai said,

I don't worry about the entertainment business, it's doing just fine. Electronics is what needs the most work. Television manufacturing and the marriage of music and video to mobile devices are big areas of focus at Sony.

As discussed on our show, Third Point LLC, an investment firm, is pushing for Sony to spinoff its media division and have it start its own IPO to boost stock price. The Sony board is still undergoing review of the proposal, but Hirai remained firm that phone, TV and laptop sales must be improved to give Sony the best chance at coming out of this company-level recession. Last month in June during an investor call, he also promised his staff and stockholders that he will make noticeable differences in the company in order to revive the electronics sales, which are credited for Sony's nine straight annual losses, totaling $8 billion.

For Sony, this upcoming holiday season will be huge for the company as a whole, with the release of the PlayStation 4. Considering that the game console could play a huge role in total revenue and profit for Sony, a strong marketing plan will be essential for sales and success for the device. Can Sony continue to ride the tide of misplaced trust in the brand by the consumers following Microsoft's choice to not explain their reasoning at E3? It might give the company just enough of a profit to then spend money focusing on improving the rest of the consumer electronics division, preventing Sony from being bought out or closed altogether. For Sony's sake, I do wish to see them succeed in coming out of the red for the first time in ten years and I think Kaz Hirai could be the guy to turn it all around.

Apple Drops Lawsuit Against Amazon Over App Store Terminology

posted Sunday Jul 14, 2013 by Nicholas DiMeo

Apple Drops Lawsuit Against Amazon Over App Store Terminology

Does anyone remember that Apple sued Amazon for their use of the term "Appstore" in relation to the Apple App Store? Well, Apple has finally dropped that suit after a two year battle in the courts. You can thank Judge Phyllis Hamilton of the US District Court in California for agreeing to close up the case between Amazon and Apple, with Apple agreeing not to sue Amazon any longer, beginning June 28th. In January, Judge Hamilton dismissed the case from her court, but Apple kept fighting every little detail, changing its reasoning slightly for the lawsuit each time they presented their argument.

Amazon has been using the term "Appstore" for their marketplace, which is very similar to Apple's "App Store" term that they've coined and trademarked in 2008 for their marketplace. The suit against Amazon was filed in March of 2011, saying that Amazon's Appstore title infringed on Apple's trademark and would confuse Apple customers. Either Apple was just being crazy, or their customers might be stupid enough to not understand the difference between Amazon and Apple.

A linguist even thought the case was a little crazy. Expert Ronald Butters filed a document with the US Patent and Trademark Office, saying that claiming "App Store" as a proper noun is insane, because they are both generic words, regardless if they're used together or not.

The compound noun app store means simply 'store at which apps are offered for sale,' which is merely a definition of the thing itself - a generic characterization.

On the dismissal of the case, an Apple rep said snidely, "with more than 900,000 apps and 50 billion downloads, customers know where they can purchase their favorite apps. We no longer see a need to pursue (this) case," while Amazon said that they were "gratified that the court has conclusively dismissed this case."

Microsoft Details Conversion Plan from Points to Real-World Money

posted Sunday Jul 14, 2013 by Nicholas DiMeo

Microsoft Details Conversion Plan from Points to Real-World Money

At the Microsoft event at E3, the Xbox team announced something that we knew was going to happen for a while now: the change from Microsoft Points to real-world currency. This week, Microsoft added an entire FAQ dedicated to the change and how it will affect you. To start, here's what's going to go down in the near future:

We are excited to announce that, as part of the next Xbox 360 system update, Microsoft Points will be retired, and transactions on Xbox will take place using your local currency instead of Microsoft Points. The monetary value in your Microsoft account will be stored in local currency, offering you a new, convenient way to purchase exciting Xbox content. This change allows you to use a single Microsoft account to purchase games, movies, apps, and entertainment from your favorite Xbox stores - or the Windows Phone Store for users with a Windows Phone 8!

This change will affect you if you're in Argentina, France, Mexico, Spain, Australia, Germany, Netherlands, Sweden, Austria, Greece, New Zealand, Switzerland, Belgium, Hong Kong SAR, Norway, Taiwan, Brazil, Hungary, Poland, Turkey, Canada, India, Portugal, United Arab Emirates, Chile, Ireland, Russia, United Kingdom, Colombia, Israel, Saudi Arabia, Czech Republic, Italy, Singapore, Denmark, Japan, Slovakia, Finland, Korea, South Africa or the US. Moving forward, you will be able to add your real-world money directly to your Microsoft Account using PayPal or your debit or credit card.

You will also be able to buy Xbox Gift Cards instead of Microsoft Point cards to add funds. You will still be able to use and redeem Microsoft Point cards in the meantime, and Xbox will "add to your account an amount of currency equal to or greater than the Marketplace value of your Microsoft Points, and your Microsoft Points will be retired." You should note, however, that you will have one year to use any Microsoft Points added to your account, as they will expire at that point. Any existing points will be converted to real-world money, too, and that currency will expire on June 1st, 2015, so be sure to spend your bankroll before then. However any actual money added to your account, at any time, will not expire during or after the transition. And just like Steam, Origin and other online currency systems, once you put money in, you won't be able to extract it back out to your real-life wallet. You also will not be able to transfer currency from one Microsoft account to another nor will you be able to purchase Xbox Live Gold Membership with your in-account currency "at this time."

Unfortunately, Xbox Live Rewards will be affected by this change as well.

Microsoft Points that you've earned through Xbox Live Rewards will remain in your Xbox Live account and will transition to your local currency with the rest of your Microsoft Points. Prior to the transition, all your earned Pending Points will be added to your account. Any Microsoft Points you received as part of Xbox Live Rewards, promotions, or contests will retain their same expiration dates after your account transitions. Be sure to stay up to date with all the latest Xbox Live Rewards news at Xbox LIVE Rewards or by following @XboxLIVErewards on Twitter.

Of course, this is just the starting point for the complete transition and more details will be coming in the future, but at least Microsoft is preparing you well ahead of their full changeover in June of 2015. This move will allow for other countries to finally have a more equal playing field, as Microsoft Points sometimes would be over or undervalued depending on where someone lived, and it wasn't fair to the gamer.

Pirate Bay Founder Creating NSA-Proof Mobile Messenger

posted Saturday Jul 13, 2013 by Scott Ertz

Since the NSA PRISM program was first exposed, there has been a lot of discussion about how secure our data really is. Once Microsoft's recent revelation that Skype communications, text, audio and video, had their encryption circumvented, an obvious market opened itself up: an NSA-proof messenger.

While Apple has repeatedly said that iMessage is encrypted, so is Skype, and an American company, under NSA order, could still circumvent their own encryption again. So, what is the solution? A non-American messenger who highly encrypts their data. That is the dream of Peter Sunde, one of the co-founders of The Pirate Bay.

The program, called, is currently being crowd funded. If the project gets funded, the app will be free with a paid version for features, such as picture messaging. It will also be the first of what I suspect will be many new products that will sprint up around the idea of personal privacy. It might even indicate a shift in public opinion about online security that could affect companies like Google and Facebook negatively.

Zynga Hires Don Mattrick as CEO, Hopes for Big Changes

posted Saturday Jul 13, 2013 by Scott Ertz

Zynga Hires Don Mattrick as CEO, Hopes for Big Changes

Last week, as Microsoft's Xbox leader left the company, he joined the flailing social gaming company, Zynga. The company has been in trouble lately, with studio closures and having enormous trouble keeping employees and customers alike.

The hiring of COO David Ko represented a big turnaround for the company, even posting a profit. Unfortunately, Ko's leadership has not been enough, hence the switch in CEOs. Pairing Ko and Mattrick is quite possibly the best thing that could happen to the company. Ko has been known for cutting dead weight, whether a popular decision or not, and Mattrick was able to help make Microsoft the dominant force in the gaming industry with innovative features and must-have titles.

At the same time as this shake-up, Zynga is also in the process of getting into a new market: online gambling. While neither leader has any real experience in that industry, Mattrick does have a lot of experience with differing markets and, of course, creating a gaming economy.

Another major benefit Mattrick brings to the company is game depth. Zynga is not known for having particularly deep games, but Xbox certainly is. Microsoft's studios, under Don Mattrick's leadership, have produced games so engaging that their very existence has literally limited the capabilities of future gaming hardware. In a company dominated by casual, passing interest titles that only turn profit through long-term engagement, getting rid of the passing interest aspect would be helpful.

Hopefully, for Zynga and their stockholders' sakes, this change will work out. Something has to work for them eventually, right?

Hulu Abandons Sale Again

posted Saturday Jul 13, 2013 by Scott Ertz

Hulu Abandons Sale Again

In a move that literally no one should be shocked about, Hulu's ownership group, Comcast, Disney and News Corp., have once again decided to take the company off the market and, instead, spend money to make it successful.

While the news is definitely a let down for potential buyers, it is something totally expected by everyone else. This is, after all, not the first time Hulu has been for sale and suddenly revoked. The last time was because Disney was not happy with any of the offers, this time it appears Disney and News Corp. together weren't happy with the offers.

Chase Carey, president of News Corp. division 21st Century Fox, said,

We had meaningful conversations with a number of potential partners and buyers, each with impressive plans and offers to match, but with 21st Century Fox and Disney fully aligned in our collective vision and goals for the business, we decided to continue to empower the Hulu team, in this fashion, to continue the incredible momentum they've built over the last few years.

Let's all hope that this claimed commitment to improvement is legitimate. The three current owners have committed to adding a total of $750 million, planned for expansion, marketing and programming. One good use of some of the cash would be original programming. Amazon has committed to 5 new shows, and Netflix seems to be launching new series regularly, some even featuring big named actors.

Both have gotten new membership due to the original programming, but both have properly marketed the programming options. Hulu has had original programming, but has failed to market to non-members. With an injection of cash, Hulu could improve its offerings and market their benefits to non-members.

The decision to cancel the sale, however, does not mean that ownership changes are not possible. Time Warner was interested in purchasing a stake, as opposed to the company, and those talks may not have ended. A fourth owner, as a content producer, not investor, is something that could help the overall company, as well. Added content and home-spun marketing, plus the potential of bundled-pricing for subscribers, could certainly improve the outlook.

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