The UpStream (Page 216)

Will King IPO be Another Zynga

posted Friday Jun 21, 2013 by Scott Ertz

Will King IPO be Another Zynga

Since social gaming company King replaced Zynga in the top spot for social gaming usage, King has decided that this would be a great time for it to begin its initial public offering (IPO) process. The company has hired some banks to begin the process, meaning we could see their IPO as early as the end of this year.

While it may seem like a good idea to the company to take advantage of the publicity to try and succeed in the public market, I have a prediction that this will be another Zynga. There are, obviously, a number of similarities between the companies. The fact that they are both social/mobile developers is certainly a good starting point. There is only so much money available in the free-to-play with micro-transaction ecosystem, and that number is a lot smaller today because of EA's brilliant decisions.

Another reason for my belief is this quote from Wedbush analyst Michael Pachter ,

My guess is that the IPO will be small, probably only 10 to 20 percent of the outstanding stock. That means supply will be small, and demand might be pretty big, so I doubt that the IPO will be disappointing.

In my experience, if Pachter says it will succeed, it is destined to fail. This is the guy who claimed going into E3 that there was ABSOLUTELY NO WAY we could possibly see EA talk about any Star Wars titles, despite the fact that several were nearing completion when Disney transferred the development rights to EA. Clearly not a man with his ear to the ground.

Jesse Divinch, VP of EEDAR, seems to have a more realistic view of the world.

But just because Zynga couldn't sustain its ecosystem, that shouldn't be entirely applicable to King. But it certainly provides a history lesson for King and for us all. Certainly, though, King can capitalize on its existing user base for a good three years with little effort.

Long-term, it will come down to game quality and whether King can grow or even sustain their current success. Anytime your revenue is attached to a large casual user base - even if they are addicted to your games - you should be concerned about how to maintain loyalty overtime.

Incredibly cautious optimism is a good way to look at this. King does not seem to be plagued by the poor management and bad business decisions, such as Facebook exclusivity in a rising mobile market, that Zynga was going into their IPO. My prediction is that King will do better than Zynga did, but not by a huge amount. Luckily they aren't following in Groupon or Facebook's shadow, both being bigger failures than Zynga.

Google Gets Threatened Again, This Time by France

posted Friday Jun 21, 2013 by Scott Ertz

Google Gets Threatened Again, This Time by France

Is there a point where Google will stop doing things that get them into legal trouble? Between an FTC investigation and imminent antitrust suit, a disaster with their street view cars stealing data and, of course, bypassing Safari's security settings, it seems like they are always up to some stupid game. This week seems like it will not the a legal slowdown for the company, however, as the government of France has issued an ultimatum to the company.

France's National Commission for Computing and Civil Liberties has issued a 90 warning against the search giant to change its privacy policy or face fines of $595,000. Google changed their privacy policy to a universal, all property policy that covers everything from Gmail to YouTube and search. One of the initial concerns over the policy change was the amount of data that Google collects about its users and how long it keeps it for.

Apparently this has caused France to challenge the policy officially, because these are exactly the issues raised in the complaint. Combined with Google's possible willingness to participate in the PRISM spy program, there should definitely be concern from everybody about the types of data Google is collecting and for how long they have it.

While the fine might not sound like a lot for a company of Google's size, the rest of the story is what is truly important. If Google fails to comply with France, every European nation will file similar complaints, most of which will not ask for such a small dollar amount. If they all don't comply, we will see a threat of removing Google from European Internet providers. THAT will certainly hurt the company quickly.

Microsoft Partners Up to Launch Exclusive Windows Store Deal with Best Buy

posted Friday Jun 21, 2013 by Nicholas DiMeo

Microsoft Partners Up to Launch Exclusive Windows Store Deal with Best Buy

If you haven't been noticing, Microsoft has been opening up a bunch of Microsoft Stores around the country and even internationally. With over 50 locations in 3 countries, the software giant has solidified itself as the new, cool, hip company where you can walk in and play with their latest gadgets. Now, Microsoft is looking to expand even more directly into Apple territory by opening up what they are calling the Windows Store, which will be featured exclusively at Best Buy, at least here in the states.

Going with the store-within-a-store approach, 500 Best Buy locations throughout the US will host the Windows Store, and 100 Best Buy and Future Shop stores will play host to the Windows Store in Canada. Microsoft says the footprint will range anywhere from 1,500 to 2,200 square feet and will serve as a prime location for customers to put their hands on products and accessories, from Windows tablets, PCs and versions of Microsoft Office to Windows Phones and new Xbox products. If you're thinking, "why Best Buy?" you probably haven't been keeping up with the fact that the yellow tag store has decided to shrink its aisle-space for DVDs, leaving much room for Microsoft to step in.

Chris Capossela, Chief Marketing Officer of Microsoft, spoke in confidence of the company's plans with this mini-store mentality outside of their routine big shopping malls up to now.

Well, unlike a lot of store-within-a-store concepts, this will actually be a department-level takeover within Best Buy stores. And they will be massive in size, up to 2,200 square feet in some locations. The other unique thing about the Windows Store is the people. There will be an additional 1,200 staff on hand to provide a great customer experience, whether it's choosing the right PC or showing consumers how to stream Xbox music through their Surface. Finally, the online experience should be fantastic. We'll have a full online Windows Store experience that will mirror the in-store look-and-feel and offer a full range of Microsoft products, even those from other places in the Best Buy store.

And on the differences of the Windows Store at Best Buy versus the Microsoft Stores in the malls, Capossela said that this is just another outreach with the same expectations as a Microsoft Store.

Well, first of all, we're committed to our Microsoft Stores. With 68 stores open in North America, we're seeing great success in our growing network. The Windows Store at Best Buy is really just another great opportunity to reach customers in more places and give them choice in their technology-buying experience. We've taken learnings from the Microsoft Store into the Windows Store at Best Buy, and we ultimately feel this is another great channel to offer a superior experience for the millions of customers who rely on Best Buy to purchase their PCs.

Regardless of my feelings of Best Buy at times, it is nice to see Microsoft finally having more places to show off all of the highlights from each and every product line the company has to offer. Sometimes, as Microsoft has seen, the third-party manufacturers don't do the best of jobs at getting their message across about Windows products. Now, Microsoft can continue to control the exact message they're trying to relay. Stores will be launching this summer and locations have not been disclosed yet.

July 11th Event Suggests Lumia PureView Smartphone

posted Thursday Jun 20, 2013 by Scott Ertz

July 11th Event Suggests Lumia PureView Smartphone

It has been quite some time since we saw Nokia unveil the 808 PureView, seemingly the final Nokia smartphone handset to not feature Windows Phone. The highlight of the handset was the 41 megapixel camera attached; something never seen before. The previous record holder was the Nokia N8 with an 8 megapixel camera, something available on most modern phones.

The question at the time was when we would see this feature come to the Lumia family. The question seems like it will be answered on July 11th, as Nokia is marketing a press event and live stream boasting "41 million reasons." If that isn't a Nokia Lumia PureView, I don't know what it could be.

Three has been talk of a Nokia Lumia EOS, including interchangeable lenses, like any other EOS camera, though I do not exactly expect to see that. Seeing Nokia bring their 41MP camera sensor to the flagship Lumia line, however, is something both expected and anticipated.

Are you excited for the possibility of a 41MP Lumia handset? Let us know in the comments. Also, make sure to be here on July 11th for our live blog of the event starting at 11AM.

Verizon Blamed for Slow Netflix Speeds by Bandwidth Provider

posted Thursday Jun 20, 2013 by Scott Ertz

Verizon Blamed for Slow Netflix Speeds by Bandwidth Provider

Many Verizon customers are starting to recognize a lack of performance on their Netflix streams. The blame seems to lie in a battle between Verizon and Cogent Communications, who is a major bandwidth provider. The battle exists over a concept known as peering, which you might not know anything about. Let me explain.

The concept is this: two companies that provide Internet access can transfer traffic between each other for free, allowing both companies to provide decent service to their customers. Verizon is a huge provider of consumer Internet access and Cogent is a major provider of bandwidth, making them a pretty good pairing. When ports get jammed, the sharing begins.

The problem lies in Verizon's tendency to allow the ports to jam up and not transfer bandwidth. Cogent CEO Dave Schaeffer said,

They are allowing the peer connections to degrade. Today some of the ports are at 100 percent capacity. Think of it as the on-ramp to the freeway being log-jammed.

Verizon let Cogent know that the reason for this policy change was because Cogent was providing bandwidth for a major media company. The company, according to Schaeffer, is Netflix. So, with the popularity of Netflix, why would Verizon get up-in-arms about who Cogent decides to do business with? Verizon is part owner of RedBox Instant. So, this is a Google-style anti-trust business decision.

As we know, FTC investigations over self-service promotion have cost Google plenty; it seems like a crazy decision for Verizon to be going down the same road, just a few years behind.

Hopefully Verizon, along with Comcast and Time Warner Cable who have also had Netflix degradation issues, will realize that limiting Netflix quality doesn't send people looking for other video services, but instead other Internet services.

Microsoft Changes Policy on Used Games and Online Check

posted Wednesday Jun 19, 2013 by Nicholas DiMeo

Microsoft Changes Policy on Used Games and Online Check

A visit to the Xbox Wire today revealed quite an interesting turn of events. If you've been following the news since the Microsoft E3 press briefing, you'll know that the new Xbox One caught a lot of slack for needing to be "always online" to check that you have a legitimate copy of the game you bought. Our editor-in-chief Scott Ertz went into detail after the press day of E3 as to why this was and why Sony was kind of doing the same thing. Well, it appears that enough people have complained to Microsoft, on the Internet, that they don't have Internet, and Microsoft has changed its mind on some of its policies that the Internet disagreed with.

Here are the highlights of the policy changes, from the update Xbox Wire today,

Update on June 19, 2013: As a result of feedback from the Xbox community, we have changed certain policies for Xbox One reflected in this blog.

You told us how much you loved the flexibility you have today with games delivered on disc. The ability to lend, share, and resell these games at your discretion is of incredible importance to you. Also important to you is the freedom to play offline, for any length of time, anywhere in the world.

So, today I am announcing the following changes to Xbox One and how you can play, share, lend, and resell your games exactly as you do today on Xbox 360. Here is what that means:

•An internet connection will not be required to play offline Xbox One games - After a one-time system set-up with a new Xbox One, you can play any disc based game without ever connecting online again. There is no 24 hour connection requirement and you can take your Xbox One anywhere you want and play your games, just like on Xbox 360.

•Trade-in, lend, resell, gift, and rent disc based games just like you do today - There will be no limitations to using and sharing games, it will work just as it does today on Xbox 360.

In addition to buying a disc from a retailer, you can also download games from Xbox Live on day of release. If you choose to download your games, you will be able to play them offline just like you do today. Xbox One games will be playable on any Xbox One console - there will be no regional restrictions.

These changes will impact some of the scenarios we previously announced for Xbox One. The sharing of games will work as it does today, you will simply share the disc. Downloaded titles cannot be shared or resold. Also, similar to today, playing disc based games will require that the disc be in the tray.

So, a lot of people are extremely happy with all of this, saying that "gamers won" and that the Internet was able to reject a limitation. But isn't this simply stifling the future and innovation? Microsoft said this announcement will change some previous scenarios for the Xbox One. Could this include some of the very innovative cloud-connected features we saw announced at E3 and at the media presentation? Are we yet again going down the path of preventing the inevitable future, albeit a bit longer, for the never-ending desire for immediate satisfaction and to save a few bucks (or not) at GameStop? It all boils down to making sure the developer who spends 18 hours a day working on your game, gets paid for the work he puts out. And until that happens, should we, as a gaming community, accept the fact that gaming studios lose revenue due to third party game retailers?

Obviously, a lot of questions are still unanswered, even after the policy announcement, and it would appear that I am one of the few that does not see that this news is all roses and daisies? There's a bunch of time left until the consoles get launched, and things can surely change in that time. That, and there's still a bunch to be announced from both Microsoft and Sony. Do you agree with my sentiment? Let me know in the comments below.

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