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Zynga Shuts the Doors on Texas, New York Offices

posted Sunday Mar 3, 2013 by Nicholas DiMeo

Zynga Shuts the Doors on Texas, New York Offices

While posting a small profit and having EA drop their copyright suit might be good news for Zynga, it appears to just be a bandage over a bigger problem. This week, Zynga announced it is shutting the doors on its Baltimore office. The company will also be shrinking its footprint in Texas and New York.

For their Baltimore branch, the closure will affect around 30 employees, or 1 percent of the developer studio. Further, this particular office was directly involved in the production of CityVille 2, which we know Zynga's COO David Ko canned after realizing the game was popular but not making them any money. Ko also mentioned in the announcement that Zynga did offer transfer opportunities to the affected employees, but only half of them decided to stay along for the ride.

Zynga will be closing the office in McKinney, Texas, as well as the office in downtown Austin, which will both be shifted to their sites in Dallas and North Austin. In New York, all of Zynga's offices will be shut down and the employees will be sent to the New York City mobile studio.

This is all a part of David Ko's no nonsense attitude when it comes to his attempt at making sure Zynga will stick around for longer than investors might be have predicted. From cutting the fat on non-profitable game titles to layoffs dating back to October, Ko is really putting the clamps down on the company. He did say in the blog post that the company intends to shut down the UK and Japan studios as well, however no date was given. On his plan to keep the company afloat, Ko said, "We still have a lot of work to do, but I'm confident that we're on the right path to deliver on the potential of Zynga."

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Ubisoft Expands the Mania's Reach

posted Saturday Mar 2, 2013 by Scott Ertz

Ubisoft Expands the Mania's Reach

Ever since we saw ShootMania Storm at last year's Electronic Entertainment Expo, the entire team has been excited about the game. We were fortunate to be part of the closed beta last year and have been active in the open beta as well; any chance to play this ridiculously fun game.

We are not the only ones who have been excited about the game. Our friends in the Frag Dolls are excited enough by the game to have come out of retirement for the title. Well, it turns out Ubisoft and Value are also excited about the title, adding it in beta to the steam platform.

That's right - Ubisoft has published the BETA version of the game on Steam. Add to that a 10% discount on the final version if you preorder now and it is a pretty compelling idea. It is pretty unusual for a major publisher like Ubisoft to release a highly anticipated new IP in beta state in such a massive, open, publicized way. I assume their intent is to get the game into as many hands as possible for free before they start charging for it. It seems like a great idea, and seems to be working.

During our interview with the Frag Dolls at the International CES this year, they said that the game has been so popular that people are running their own paid tournaments, even with the title still being pre-production. For people to risk money on a game that could potentially glitch out is dedication.

If you are a fan of FPS titles, definitely check this game out while it is free, either through Steam or not. You certainly won't regret it. Hit the break for the original teaser trailer and our interview with the Frag Dolls.

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Hulu Looking for Ownership Transition - Again

posted Saturday Mar 2, 2013 by Scott Ertz

Hulu Looking for Ownership Transition - Again

For some reason, Hulu has had a lot of trouble with their ownership. Every few months it seems like one or more owners get antsy and want out. Most recently, an early investor got out, leaving our three big guys behind: News Corp. (FOX), Disney (ABC) and Comcast (NBC).

In the past, everyone wanted out. Several bids were made for the company, but the major investors were unable to come to an agreement on terms. Eventually the sale was ended, with no change taking place. The main companies at the heart of the disagreement were News Corp. and Disney; both have very different ideas of how the brand should be run, and how licensing should work. Fox has even gone so far as to wait two weeks before licensing new content to Hulu.

With that information at hand, it is not surprising at all to hear that News Corp. and Disney are in talks to buy each other out. Both companies either want out entirely or want the other one out, willing to purchase the opponent's share. Again, the issue at hand has to do entirely with how to run the business, primarily around the monetization aspect.

Of course, this is all speculation. Adding to the rumor's credibility is the fact that an early investor, and current CEO, Jason Kilar, is set to step down at the end of the month. During an executive power vacuum would be the ideal time to make a big change like this. Kilar sold his shares of the company back in October for $40 million at the same time Providence Equity Partners sold back $200 million worth of stock.

The idea that multiple stockholders would bail together, including the CEO, certainly suggests management struggles. Hopefully, if this happens, it will go for the better. So far, it would appear that the FOX stake in the company would lead to a change in the way the company works. Either way, my guess is NBC won't be hugely excited about going from a 33% equal partnership to minority stake.

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Groupon Fires CEO, Receives Public Farewell

posted Saturday Mar 2, 2013 by Scott Ertz

Groupon Fires CEO, Receives Public Farewell

We have written about the spectacular failure that Groupon has been since before their IPO. Between June and August of 2011, their traffic dropped 50%; not exactly the press you need before you announce your IPO in October. Their attempt to get a good valuation and some investment money didn't quite pan out. Add to that unsuccessful product launches and you end up with a company in trouble.

Their disaster has been so legendary that all recent IPOs have been scored in relation to theirs: Facebook was compared to determine which was worse, and LinkedIn proved an IPO could be successful. But what of the leaders of companies who lose their shirts in the stock market? Often times they are taken out and fired. Groupon has decided to follow in BlackBerry's footsteps, letting Andrew Mason, their CEO, go.

Andrew didn't respond the way most CEOs do when terminated - he released a public statement, and it is a unique one. He knew what was coming and does not blame the company. We have the statement after the break.

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Can Apple Recover From Stock Crash?

posted Saturday Mar 2, 2013 by Scott Ertz

Can Apple Recover From Stock Crash?

We all remember the news from last year: Apple had become the most over-valued stock on the market. With a stock price of $705.07, it was clear that Apple had the market covering its back, but for how long? Ever since the resignation of Steve Jobs as CEO before his death and the decision to appoint Tim Cook to the role, the belief was it would happen sooner than later.

With its market share shifting to Samsung, issues with handset quality, camera color and map accuracy issues, it has been clearer that the valley was coming. Over the past few weeks, we have seen it come to fruition. From its peak to this week's new low of $430.21, the company's stock has dropped a whopping 40% in just 2 quarters.

For those who are not intimately familiar with the way stock process work, they show investor confidence in a company and its products or services. A 40% drop in price indicates a massive shift away from confidence in Apple's management to maintain the relevance of their product line. I tend to agree with the market's analysis. Steve Jobs was the reason the company had the success it had; without him, people seem to not care.

There is a saying within the industry: every time Tim Cook speaks, Apple's stock drops. That is a lot different from the days where any time Jobs spoke, the stock would go through the roof. Product announcements are no longer spectacles that are talked about for week afterwards, product launches are no longer covered live by the press; those spots seem to have been taken over by Samsung and Microsoft. The Galaxy Note 8 has had a bigger reception in the press than the iPad Mini did; The Surface RT and Surface Pro have had more coverage than the recent version of the iPad.

Unless Apple can do something amazing and announce it in a way that isn't boring, Samsung, Google and Microsoft will have the opportunity to end the run of Apple. If I were a stockholder, which I am not, I would be demanding Tim Cook's resignation - like Groupon - tomorrow with the hopes that someone with the passion of Steve Jobs could take the reigns and bring back the excitement of the company.

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Spotify Sets Up Talks with Major Record Labels to Lower Rates, Bring Free to Mobile

posted Sunday Feb 24, 2013 by Nicholas DiMeo

Spotify Sets Up Talks with Major Record Labels to Lower Rates, Bring Free to Mobile

Spotify, the service I've been following since the beginning, has a couple of key meetings lined up for the next couple of weeks. This could partially be due to their next round of funding coming up, but they also have a bigger picture in mind. Spotify will be talking with the major record labels to renew the licensing agreements in place. Even bigger, they will be looking to ask those record labels for some pretty big price cuts, and will also see if they will be on board to bring free streaming to mobile devices.

Spotify is already speaking with Warner Music on these topics, but will be dealing with Sony and Universal within the next month, according to sources close to the situation. These talks are crucial for the music-streaming service, as the music's big three will either make or break Spotify moving forward. If everything goes well, Spotify could be propelled past several competitors and could really go up against Apple in terms of market share. Currently, Spotify has 5 million paid and 20 million total users across the globe.

As far as the financials, Spotify pays 70% of its revenue towards music-licensing fees and another 20% goes into acquiring new customers. The remaining 10% is left for other costs, like upgrading the platform. This leaves almost nothing for Spotify to really profit from after everything is said and done, which is why the price breaks from the record labels would be very useful. If Spotify can prove increased market share and exposure, the labels might play ball on terms on quantity instead of price.

Another key for the negotiations is going to be the previously mentioned shift to bring the free tier to mobile for more than just a 30-day trial. We've already shown that Spotify users buy more music than those who don't use Spotify, so perhaps there is really something to be said about the power behind the platform. I think that Spotify also has some negotiating power to push both of their objectives with their ability to convert almost 20% of its customers into paid subscribers. We'll have to see if the labels agree, and I will be sure to report back to you either way. Now if only the company would allow you to purchase music as well through their platform.

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