The bad news is that the video game console market is still in the pits:
Microsoft Corp. (MSFT) said U.S. retailers sold 270,000 Xbox video-game consoles last month, citing data from market researcher NPD Group Inc.
The sales represented 49 percent of the market for current generation consoles, Redmond, Washington-based Microsoft said today in an e-mailed statement. Stores sold 438,000 Xbox players in the same month a year ago, according to NPD data at the time.
Microsoft Corp. (MSFT)’s full-length, Hollywood-style movie based on the next “Halo” video game will skip the big screen, streaming instead on Google Inc. (GOOG)’s YouTube before heading to store shelves as a DVD.
The Redmond, Washington-based maker of the Xbox console, promoting the November release of “Halo 4,” has taken the unusual step of creating its own 90-minute movie, at a cost of almost $10 million.
Microsoft plans to release weekly installments of “Halo 4: Forward Unto Dawn” on the Web before offering the game and DVD, a move that highlights the influence of new media, including promotional options and the ability to cut out traditional channels like theaters. The film airs starting tomorrow in five 15-minute segments on the YouTube channel Machinima Prime, leading up to the game’s debut on Nov. 6.
“We’re either the best-funded Web series of all time, a sort of mid-road healthy TV pilot, or a super-low budget movie,” director Stewart Hendler said in an interview.
The clips of “Forward Unto Dawn” will stay online through Nov. 23, then disappear until Dec. 4, when a Blu-ray disc goes on sale that includes an added 15 minutes, for a suggested $28.99. The film will also be available for download from Apple Inc. (AAPL)’s iTunes, Microsoft’s Zune Marketplace and other online movie stores.
I’m voting for a really long ad. You may recall that at one time Microsoft had plans for a big budget Halo movie that never worked out.
Microsoft has hired Nancy Tellem, a former top CBS television executive, to oversee the production of original video content to be delivered to the company’s Xbox video game console, according to people with knowledge of the move who did not want to be named ahead of an official announcement.
Ms. Tellem will oversee a Microsoft production studio based in Los Angeles that will create both traditional “linear” programming and interactive programming that fuses video and gamelike content, they said. She will report to Phil Spencer, the corporate vice president of Microsoft Studios, part of the Microsoft entertainment division that oversees the company’s Xbox console.
Sure, that’ll work.
Microsoft Corp. (Nasdaq: “MSFT”) and Skype Global S.à r.l today announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and Skype.
The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities. The combination will extend Skype’s world-class brand and the reach of its networked platform, while enhancing Microsoft’s existing portfolio of real-time communications products and services.
Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.
Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.
The acquisition is subject to regulatory approvals and other customary closing conditions. The parties hope to obtain all required regulatory clearances during the course of this calendar year.
Om Malik has some perspective on why Skype’s owners were anxious for it to be sold and suggests that if Microsoft does not botch the acquisition, the big winner could be Facebook (who already has a relationship with Microsoft) and that a joint announcement could be expected shortly. Still, the big question is how the acquisition will work out, including how much of the Skype team will stay with Microsoft and the basic economics of the Skype service which has already suffered through a failed acquisition by eBay:
Despite its popularity, the service has struggled to maintain profitability. Since most of its services are free, Skype makes much of its income from a small group of users who pay for long distance calls to telephone numbers. In 2010, Skype recorded $859.8 million in revenue but reported a net loss of $7 million, according to a filing.
Microsoft’s deal-making history is mixed. The company has often been an smart acquirer of start-ups and smaller companies, analysts say, picking off technical teams that are then folded into products likes Windows, Office and Internet Explorer. But during Mr. Ballmer’s tenure as chief executive, beginning in 2000, the company has also made far larger, riskier bids, most of which have been viewed as unsuccessful.
In 2005, eBay bought Skype for $2.6 billion with hopes of tightly integrating the service as a sales tool. But the deal never lived up to its promise and eBay took a $1.4 billion write-down on its investment.
I’m frankly a bit dubious about the success or at least profitability of this acquisition since Skype doesn’t even seem to be a side dish, but more of a garnish on Microsoft’s plate and a very expensive garnish at that.