Communications Technology

Up and down. Down and up. That was the story in 2009 for the video game industry, a year in which sales of Nintendo’s Wii, Microsoft’s Xbox 360, and Sony’s PlayStation 3, and software for them, roared long after the recession battered consumers’ wallets, and then came crashing down.

In January, sales were up 13 percent over the year before, reported industry analyst the NPD Group, and that trend continued in February, with a 10 percent boost over 2008. The argument for why video games could be doing so well while jobs were disappearing by the six-figures? The long-bandied-about theory is that entertainment offers people a great value for their money, particularly when they can get dozens of hours of fun for the whole family for just the $60 it costs for a game like Madden 10.

But by March, all that momentum was gone and sales were through the floor, losing 17 percent over the year before. That soon became the trend as the numbers kept on going down, month after month after month. The theory that video games were recession-proof dissolved with the revenue figures.

But not all was bad. Even as the industry in aggregate was seeing the bottom line results of the recession, individual games and companies were smiling broadly at either immediate successes or future promise.

For example, in March at the Game Developers Conference in San Francisco, WebTV founder Steve Perlman and former Eidos CEO Mike McGarvey unveiled OnLive, a promising technology that could turn the industry on its ear by streaming first-run, console-quality games from top-tier publishers over the Internet. Then in June, Microsoft took E3, the video game industry’s giant Los Angeles trade show, by storm with the formal unveiling of its futuristic hands-free motion-sensitive controller system, Project Natal. Primed to change the way gamers–and others–interact with their consoles, or computers, the technology was the hit of the show. It’s not known for sure when it will be released or how, but rumors have it that it will cost around $50 and hit store shelves late in 2010.

Also a big hit at E3, where it was seen for the first time, was Beatles: Rock Band. That game, something that would have been impossible only a couple of years ago, even got Paul McCartney, Ringo Starr, and Yoko Ono to show up at Microsoft’s E3 press conference.

If that was an unlikely event, it may have been only one notch less probable that what happened in September, when the PS3 at long last won a monthly sales crown, beating out the Xbox and the Wii in NPD’s monthly sales report for the first time in the console’s three-year run. But that was surely because of the August release of the PS3 Slim, a smaller–and more importantly, a cheaper, version of the console. For the first time, a PS3 could be had for less than $300–well, OK, it was $299–and things began to look up for Sony’s beleaguered machine.

But Nintendo also got into the price-slashing game in 2009, cutting the Wii’s sticker to $199 after being $249 since launch in 2006. And after a 2008 holiday season in which no one could find a Wii, the supply finally matched demand in March. By fall, the Wii had retaken its top sales spot and was expected to maintain it through the holidays.

Another bright spot was the record-shattering sales of Activision’s Call of Duty: Modern Warfare 2, which became the fastest-selling piece of entertainment in history in November, racking up sales of more than $310 million on its first day alone.

Clearly, notwithstanding great news like that, there’s trouble in the industry: thousands of layoffs, tumbling sales, studios closing, and a sense that if the holiday doesn’t do gangbuster business there’s going to be a bloodbath. In that, video games may not be unlike other industries. But given how rosy each of the major hardware companies keep saying things are, one could be forgiven for getting confused by the reality.

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After 17 months of litigation, the hammer has finally fallen on Psystar.

The U.S. District Court for the Northern District of California on Tuesday granted Apple’s request for permanent injunction against the Mac clone maker. This bars Psystar from peddling PCs with the Mac OS X operating system preinstalled, from circumventing the technological measures Apple uses to prevent unauthorized copying of Mac OS X, and from assisting others in doing so.

“Defendant must bring its conduct into compliance with the injunction by midnight on December 31, 2009, at the latest,” U.S. District Judge William Alsup wrote in his ruling. “Defendant must immediately begin this process, and take the quickest path to compliance; thus, if compliance can be achieved within one hour after this order is filed, defendant shall reasonably see it done.”

It would seem, then, to be over for Psystar, though we likely haven’t yet heard the last of it. Alsup’s injunction doesn’t include the company’s Rebel EFI software, which allows Mac OS X to be installed on PCs. So for now the company can continue to sell it, though Alsup warns that to do so is a risky legal proposition at best.

“Rebel EFI will not be expressly excluded from the terms of the injunction,” Alsup wrote. “It should be clear, however, that this ruling is without prejudice to Psystar bringing a new motion before the undersigned that includes real details about Rebel EFI, and opening itself up to formal discovery thereon. This would serve the purpose–akin to a post-injunction motion vetting a ‘design-around’ in a patent action–of potentially vetting (or not vetting) a product like Rebel EFI under this order’s decree.

“Moreover, Psystar may raise in such a motion any defenses it believes should apply to the factual circumstances of its new product, such as the 17 U.S.C. 117 defense raised in its opposition and at oral argument. Whether such a defense would be successful on the merits, or face preclusion or other hurdles, this order cannot predict. What is certain, however, is that until such a motion is brought, Psystar will be selling Rebel EFI at its peril, and risks finding itself held in contempt if its new venture falls within the scope of the injunction.”

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WASHINGTON (AFP) - Worldwide sales of mobile devices are expected to decline by nearly 0.7 percent this year and pick up again next year with nine percent growth, Gartner research group said Tuesday.

Gartner’s forecast of an 0.67 percent decline in sales in 2009 compared with 2008 was better than its September forecast of a 3.7 percent drop in sales this year.
The Stamford, Connecticut-based Gartner said it expected smartphones to account for 14 percent of the total 1.214 billion mobile devices sold this year.

It said it expects smartphones to account for 38 percent of total units sold by 2013.
“Despite a projected return to growth in 2010, the times of 20 per cent growth are certainly over as mature markets are saturated and most growth will come from emerging markets,” Gartner research director Carolina Milanesi said.

“Software, services and content will be much bigger drivers than hardware, pushing traditional mobile phone vendors to reinvent themselves to remain at the top of their game,” she added.

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