Twitch closes $20 million Series C investment

Take-Two joins investors in Twitch’s growing media platform.


Twitch has announced a Series C round of investment totaling $20 million, led by Thrive Capital. West Summit Capital and Take-Two Interactive Software also participated, with additional funding coming from existing investors Alsop Louie Partners and Bessemer Venture Partners. The funding will be used to grow Twitch Media Group, the company’s internal ad sales force.

“Gamers today have a healthy appetite for both producing and consuming live video game content, so it’s vital that we’re not only keeping pace with them, but staying one step ahead,” said Twitch COO Kevin Lin. “With the investments from Thrive Capital, WestSummit Capital, and Take-Two Interactive, it ensures we can more effectively grow and tap into new markets.”

Twitch has reached more than 45 million unique visitors per month. The service will also be integrated into the upcoming Sony PlayStation 4 and Microsoft Xbox One, so part of the new funding will be used to get the service’s infrastructure ready for those launches.

“Given the excitement surrounding Microsoft and Sony’s upcoming video game consoles, Twitch will be in a lot of living rooms this holiday season,” added Lin. “Their intuitive and accessible integration of Twitch removes the barriers to entry which casual broadcasters currently face, so we expect traffic numbers to soar when these consoles launch. The trend of video game based content as entertainment is not only here to stay, it’s becoming a critical part of the holistic gaming experience.”

“Twitch is a company that we see riding multiple waves both in gaming and online video,” said Thrive Capital partner Chris Paik. “By providing gamers a new way to express themselves, Twitch has built a strong, passionate and fast growing community around itself.”



New Playstation, New Xbox One Are Coming, and Gamestop Wins

GameStop (GME), having survived a brutal nine quarters without much in the way of new video-game products on aging platforms, is about to power up on two new video-game consoles and two major releases from popular franchises.

The Texas-based retailer expects a major boost from the fourth iteration of Sony’s (SNE) Playstation, due in mid-November, and Microsoft’s (MSFT) new Xbox One, expected to hit shelves around the same time. Before the next-generation devices arrive, there’s likely to be a final retail hurrah for new games on the old machines as the hit franchises Grand Theft Auto 5 and Battlefield 4 hit the shelves over the next two months.

“There are no other retailers on the planet that are prepared for this kind of opportunity,” GameStop Chief Executive Officer Paul Raines bragged to investors about the coming of the new consoles. The company expects profit in the coming quarter to be up to 45 percent than its haul in the year-earlier period. If history is any guide, GameStop is in for a wild ride.

The last Xbox iteration, released in November 2005, came as rocket-fuel for GameStop. The company’s market value had already grown by almost 50 percent by the time Playstation 3 was released a year later; in the following 12 months its share price doubled. The company appears to be in an even better position to take advantage of the gaming cycle this time around. Its share of the video-game retail market has grown from about 15 percent to roughly a quarter, according to Piper Jaffray analyst Michael Olson. The number of stores worldwide has grown by nearly half since the debut of the last Xbox, with more than 2,100 new locations opening, primarily in North America, from 2005 to 2012 for a total that tops now 6,500.

GameStop made those gains by carefully cultivating a community of hardcore gamers. In 2010, GameStop launched its “PowerUp” loyalty rewards program, which now has about 25 million members. That vocal GameStop constituency proved a powerful force in blocking manufacturers from switching to download-only sales or any other changes that might limit the massive second-hand market for games, which remains GameStop’s great strength. Customers are more willing to buy a new game at full price if they know they can sell it back and recoup at least some of their investment.

What’s more, GameStop has deepened its ties with game publishers, allowing it to lock up inventory in advance, collect cooperative advertising dollars, and orchestrate release parties at its brick-and-mortar stores. The company has also said it will get bigger console allocations from both Microsoft and Sony this time around, which can prove a major driver of foot traffic in the early days, when inventories are scarce.

The big console launches also promise a flurry of trade-in activity as consumers swap old games and hardware and exchange new purchases they aren’t keen on. GameStop collects almost 40 percent of its revenue by selling used games and gear, a business with a powerful 47 percent gross profit margin. That’s roughly double what the company  squeezes out of selling new gaming hardware and software. In 2007, just after the Playstation 3 hit shelves, GameStop’s pre-owned business surged by 20 percent.

“We compete on the value dimension,” Raines recently told investors. “We compete based off trades. We don’t compete based off discounting.”

In other words, GameStop is going to get video-game fanatics without having to mark down merchandise. Amazon (AMZN), Target (TGT) and other big electronics retailers may not have that kind of power.


Sony: PS4 price is a challenge to rise of smartphones

Jack Tretton dismisses the idea of console decline, discusses price advantage over Xbox One

Jack Tretton

Sony’s Jack Tretton believes that the PlayStation 4’s $399 price-point will help to eradicate the notion that consoles have been made irrelevant by smartphones and tablets.

Speaking to AllThingsD, Tretton described the idea that the console market would be severely harmed by the rise of new platforms as, “what people who aren’t really into gaming think is happening.”

“Turn to anyone, any of the gamers here in this crowd [at E3] and ask them if they’re turning to smartphones and tablets over consoles,” he said. “And then run.”

For Tretton, this is partly down to staying competitive in terms of price, and Sony’s $399 price-point is $100 cheaper than a current-generation iPad and, more significantly, the Xbox One. This is a reversal of the last generation, when the PlayStation 3 was significantly more expensive than the Xbox 360.

“You always like to be below your competition, as opposed to above it,” Tretton said. “Frankly, we executed our strategy… and regardless of what Microsoft would have announced, our price was our price.

“Look, being at a price premium is a challenge, one that we certainly haven’t enjoyed.”

However, Tretton closed the interview with a reminder that launch prices have never been permanent. The conditions at the time of launch of the PlayStation 4 and Xbox One, in terms of both services and pricing, will inevitably change.

“As the install base grows and the manufacturing price comes down, the price comes down,” he said. “And so, while I can’t guarantee that’s going to happen down the road, if it didn’t that would be the first time that’s happened. And at the same time, the machines progress. They actually get better than they are at day one.”



Survey: Apple products beat out Wii U, PS3, Vita and Xbox 360 on Christmas wishlists


Apple brand products are ranking over video game consoles like the Wii U and PlayStation Vita on Christmas wishlists this year, according to a recent survey conducted by Nielsen Wire.

Nearly half of children under 12 surveyed said they want an iPad for Christmas, as shown in the infographic below. The next most-demanded item is the Wii U with 38 percent of children requesting it. Directly below the Wii U are the iPod touch, iPad mini and iPhone.

The second-highest ranking dedicated gaming console is the 3DS handheld at 29 percent. Representing consoles at the bottom of the chart is the PlayStation Vita, with only 14 percent of children saying they want one for Christmas.

In the second infographic below, survey takers 13 years and older also express the most interest in an iPad, with one in five people requesting the tablet. Computer and non-Apple brand tablets come second and third, leading over the Wii U at 17 percent. Smartphones, e-readers and tablets dominate the list, with consoles including the PlayStation 3 and Xbox 360 garnering less than 10 percent interest.

Holiday wish list 2013

Holiday wish list 2013


How many times have you heard the comment that PC and console games are dying? Personally I think some people in the gaming industry are just trying to attract attention. While it is quite true that “social” gaming is edging it’s way into the console market I believe there is still room for all of them to compete and consumers will and should benefit from the added competition. Now when I say social gaming, I mean games that are relatively cheap, say $.99 cents to $4.99. These are the prices you expect from games on a phone or tablet, yes there are some deep gaming experiences that will run you around $10, but that is a topic for a later article. Basically if you want an inexpensive, fast game while on the bus, rain or toilet, this is what you play, although many people take their 3DS and PS vita into their bathrooms also, their games are not that cheap. A good gaming experience that will submerse you and visually astound you on a big screen, well you go play on your consoles, whichever they might be.

I believe that depending on your location, the experience you want and game play you hunger for will ultimately make the choice on which platform you choose to play it on at that moment. It’s also important to remember that alot of game titles will only work on consoles or a PC, so when I read about so-called experts and analysts decrying the death of consoles I just have to throw my hands up and say..well, hear e go again!

Trip Hawkins the co-founder of Electronic Arts believes that consoles not PC’s are the real dying breed.



“The console market is always going to be with us, because there’s always going to be a hardcore segment, a segment that likes innovation,” he acknowledged. “But it’s going to become a smaller market, and it’s going to be more like a hobby market. You look at airplanes. Most of us just want to be a passenger, but there’s a hobby market for people who are really into aviation and want to take flying lessons and maybe someday have their own airplane. I think that’s what’s happening to the console market.”

Hawkins believes that the advantages inherent to internet-based gaming ensure that its popularity will increase dramatically in the near future. “In the old days I’d go down to the basement to play Grand Theft Auto,” he said. “But the Facebook gamer is able to play at work, at home, in a hotel on a PC. They can get access to a browser just about anywhere. People are thinking about convenience first.”

Sorry Mr. Hawkins but consoles will not become a hobby unless you and other game companies make it happen by forcing more games on tablets and phones and less on consoles. Somehow, I really do not understand the reasoning or logic in comparing consoles and hardcore gamers to a hobby like flying, but hey, he’s entitled to his own opinion right?