29 April, 2012



Nintendo ends its apathy toward online-services

Posted: 29 Apr 2012 07:00 AM PDT

Mighty Switch Force

Japanese video game publisher Nintendo recently suffered its first annual loss.  The yen’s value hurt in the $460 million loss, but it didn’t help that Nintendo wasn’t adjusting to the times. No part of its business model better exemplified this inability to adapt than its woeful online presence. How are the people who brought us friend codes supposed to compete in a world with Apple’s iPhone?

How Nintendo adapts to the internet is critical to its future in the increasingly-web-connected game market. And so it is interesting that the Kyoto-based game maker may finally be ready to figure out this whole internet thing. According to the same financial report in which Nintendo announced its record loss, it revealed that 70 percent of all 3DS units sold have been connected to the Internet. That’s right in step with the Xbox 360 and the PlayStation 3, which had 73 percent and 78 percent internet-connection ratios in 2010, respectively.

This suggests that the audience for the 3DS is similar to the customer on Sony and Microsoft’s systems. The demand for content exists. It has probably always existed, but Nintendo can no longer afford to ignore it.

Nintendo eShopTo be clear, Nintendo’s fan-base isn’t expecting an experience comparable to Xbox Live. Cross-game chat and a party system would be wonderful, but this group of gamers has been kicked one too many times. They just want games, big and small, delivered on-demand at a more reasonable price. Based on Nintendo’s recent efforts and language, it seems to be doing just that.

The eShop, the 3DS’s digital-download service, is the first beneficiary of Nintendo’s recent revelation. The biggest fear in the wake of the internet-allergic Wii was that the new handheld’s online store would be just as uninspired as that old console’s Shop Channel. That isn’t the case. Since release, the device has seen a steady stream of downloadable titles that are original, fun, and worth the money. Specifically, 3D puzzle-platformer Pushmo and action-game Sakura Samurai: Art of the Sword are both excellent titles and each one is available immediately for less than $10. Another seven or eight games of that caliber populate the best-seller charts on the digital-distribution service.

This focus on quality has paid off for the publisher. Pushmo has over 11,000 user reviews, which is indicative of only a fraction of the total sales. Of course, the eShop has a long way to go before it can match something like Microsoft’s Xbox Live Arcade, but Nintendo readily admits that.

“We know that the Nintendo eShop still has room for improvement,” Nintendo wrote in its financial report. “However, we have a strong feeling that the foundation for us to deploy our digital businesses has been properly laid out.” Good games are one thing, but realizing that this is only the foundation is the first step in a process toward a fully realized digital platform.

New Super Mario Bros. 2 flying

The next step is bringing full-retail games to the eShop. And hey, Nintendo Chief Executive Officer Satoru Iwata just announced that New Super Mario Bros. 2 will do exactly that. This follow-up to the astronomically successful New Super Mario Bros. will be another brave move toward fully embracing the warm glow of the Internet.

Nintendo is wounded. Thankfully, in this slightly vulnerable period, the ancient corporation has begun to align its interests with its fan’s needs. While the company has had an online presence for years, it’s only now started to put care into the execution. Which isn’t to say it now knows what it’s doing. Chances are the Wii U will be filled with scores of mistakes in its online user experience, but that’s the price Iwata and his team has to pay for treating this integral aspect of modern gaming with such disinterest. Better late than never, I suppose.

GamesBeat 2012 is VentureBeat's fourth annual conference on disruption in the video game market. This year we’re calling on speakers from the hottest mobile, social, PC, and console companies to debate new ways to stay on pace with changing consumer tastes and platforms. Join 500+ execs, investors, analysts, entrepreneurs, and press as we explore the gaming industry's latest trends and newest monetization opportunities. The event takes place July 10-11 in San Francisco, and you can get your early-bird tickets here.

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Shadowrun Returns raises $1.8M in Kickstarter campaign

Posted: 29 Apr 2012 12:02 AM PDT

Game developer Harebrained Schemes scored $1.8 million for Shadowrun Returns from more than 36,000 backers in one of the most successful crowdfunding campaigns on Kickstarter, which has become a huge platform for raising money for independent games.

The campaign headed by game veteran Jordan Weisman closed its 30-day run tonight. It beat its original goal of raising $400,000 in little more than a day. Now Harebrained Schemes will be able to bring back the role-playing game classic for tablets and PCs. The success comes on the heels of successful Kickstarter campaigns by Tim Schafer and Brian Fargo. The final tally from 36,276 donors is $1,836,447.

Lately, a growing trend among mid-sized developers is to fund projects with Kickstarter campaigns. Projects that may have previously been beyond the scope of what the developer could do financially are now within reach thanks to projects funded by fans. Double Fine's Tim Schafer was the first noteworthy name to do so with his upcoming title Adventure. He smashed Kickstarter records. Brian Fargo raised half a million on his first day for Wasteland 2, and most recently Replay Games launched a campaign to raise $500k for the development of a Leisure Suit Larry remake. Replay has three days to go in its campaign and it has already exceeded $500,000.

The original Shadowrun debuted 1989 as a pen-and-paper role-playing game. It was an RPG set in a near-future universe with sci-fi and fantasy creatures in the same environment. It combined cybernetics, magic, urban fantasy and other elements in a dystopian Blade-Runner-style world. It went on to become a board game, a Sega Genesis game, a Nintendo SNES game, and dozens of novels. After a dud shooter version bombed on the Xbox 360, Weisman licensed the game rights again. He’s been waiting to remake it. Harebrained Schemes will release its level editor so players can create their own levels “tell their own stories in the world of Shadowrun.” Unless Weisman blows this money on a bunch of lattes, it looks like fans are going to get what they want.


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Nvidia launches $999 graphics card with the world’s fastest gaming performance

Posted: 28 Apr 2012 11:33 PM PDT

Nvidia is seeking to extend its lead as the leader in game graphics today with the launch of its first dual chip Kepler graphics card.

Jen-Hsun Huang, chief executive of Nvidia, made the announcement of the GeForce GTX 690 graphics card at the Nvidia Games Festival in Shanghai, where more than 6,000 gamers are attending the event.

The GTX 690 has two of Nvidia’s most powerful graphics chips based on the code-named Kepler graphics architecture. The graphics card has an exotic look with an exterior frame made from trivalent chromium-plated aluminum. It has a fan housing made from thixomolded magnesium alloy, and it delivers high-performance with lower power using a heavy-duty but efficient power supply.

The GTX 690 has 3,072 Nvidia CUDA cores, which can handle both graphics and non-graphics processing tasks. The card delivers close to double the frame rates of the Nvidia GTX 680, which has a single Kepler-based graphics chip. The single-card 690 is more power efficient and quieter than a system with two GTX 680 cards running in SLI configuration. Nvidia introduced the 680 last month. The new GeForce GTX 690 card will be available in limited quantities on May 3 with wider availability on May 7. Add-in card partners include ASUS, EVGA, Gainward, Galaxy, Gigabyte, Inno3D, MSI, Palit and Zotac.

The price is expected to be $999.

Filed under: games, gbunfiltered, VentureBeat

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Apple saves billions in taxes through very creative accounting, says NYT

Posted: 28 Apr 2012 10:27 PM PDT

apple store grand central

As one of the most profitable companies in the world, it’s hard not to think that Apple would try to reduce its taxes wherever possible. But according to a detailed report today by the New York Times, the company is going to extreme lengths to avoid taxes — so much so that it’s pioneered accounting techniques that many others have followed.

For example, Apple has opened a subsidiary in Reno, Nevada — cheekily named Braeburn Capital — to collect the company’s profits, as well as invest them. Nevada offers a corporate tax rate of zero, while California’s is 8.84 percent, so the subsidiary allows Apple to legally able to avoid millions in taxes to California.

Of course, Apple isn’t alone with its tax avoidance methods. But just as with the New York Time’s extensive reports on Apple-related labor abuses in China, the paper seems to be holding up Apple as an example to point out greater business concerns. Apple is a particularly interesting subject as well, given its record-high profits and cash reserves of $110 billion.

“Apple was a pioneer of an accounting technique known as the "Double Irish With a Dutch Sandwich," which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean,” writes the NYT’s Charles Duhigg and David Kocieniewski.  “Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple's methods, say accountants at those companies.”

Without its creative accounting, Apple could have owed $2.4 billion more to the U.S. government last year, according to former Treasury Department economist Martin A. Sullivan. Apple paid $3.3 billion in cash taxes last year on profits of $34.2 billion, whereas retailer Walmart paid $5.9 billion on $24.4 billion in profits, the NYT points out.

The NYT report, which mentions plenty of other interesting tax tactics by Apple, is particularly damning against Apple given how much California and its home city of Cupertino are struggling. I suspect we’ll see the usual amount of Apple bashing thanks to this report, but there’s likely little the company will do about the criticism. Apple doesn’t really have much room to improve if its competition continues to take advantage of legal tax loopholes.

In response to the New York Times report, Apple issued the following statement‘ to the paper:

Over the past several years, we have created an incredible number of jobs in the United States. The vast majority of our global work force remains in the U.S., with more than 47,000 full-time employees in all 50 states. By focusing on innovation, we've created entirely new products and industries, and more than 500,000 jobs for U.S. workers — from the people who create components for our products to the people who deliver them to our customers. Apple's international growth is creating jobs domestically since we oversee most of our operations from California. We manufacture parts in the U.S. and export them around the world, and U.S. developers create apps that we sell in over 100 countries. As a result, Apple has been among the top creators of American jobs in the past few years.

Apple also pays an enormous amount of taxes which help our local, state and federal governments. In the first half of fiscal year 2012 our U.S. operations have generated almost $5 billion in federal and state income taxes, including income taxes withheld on employee stock gains, making us among the top payers of U.S. income tax.

We have contributed to many charitable causes but have never sought publicity for doing so. Our focus has been on doing the right thing, not getting credit for it. In 2011, we dramatically expanded the number of deserving organizations we support by initiating a matching gift program for our employees.

Apple has conducted all of its business with the highest of ethical standards, complying with applicable laws and accounting rules. We are incredibly proud of all of Apple's contributions.

Photo: Sean Ludwig/VentureBeat

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Google Cube: Because you’re dying to play a game about Google Maps

Posted: 28 Apr 2012 11:44 AM PDT

Google Cube

Ever wanted to lead a ball through a maze and learn about Google Maps at the same time? Me too. Google has released its Google Cube game, to be played once and forgotten.

Google Cube Maps FactsIt’s fun to play for novice gamers (see: me) or someone looking to kill some time, but at its core, it’s a promotional vehicle. You go through eight different levels: Manhattan, San Francisco, Paris, London, Tokyo, Las Vegas, the Mall of America, and a mix-match of all the different cities combined. You must use your cursor to guide a little blue ball through a maze of city streets and mall hallways to reach predetermined locations. After you complete one of these levels, a box will pop up and tell you how long it took you to finish the level and a little fact about how Google Maps can make your life better. It drops a couple mentions of Google Maps for Android in there as well.

You can access the game through playmapscube.com. There is currently no mention of it on the Google Maps or Google+ Games websites. The “playmapscube.com” site is probably a tester until Google decides to dump it, or integrate it with its products. I can’t imagine there will many return-players to this, one, though.

The game was originally suspected to be for Google’s social network, Google+. After launching Google+ in June, the company quickly added games to its social features in August. It’s direct competitor, Facebook, has allowed games for a while now and makes a significant amount of money from those games (particularly from Zynga). Obviously, this puts a lot of pressure on Google to compete, but it doesn’t look like Cube is intended to be for the Google+ audience. Indeed, you can Facebook Like and Tweet your scores.

Though the game itself is fairly lackluster, the promo video for it is actually pretty cool and involves a real, large cube turned by people in white gloves. Check it out:

hat tip Fusible

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After you read this, you’ll want to spend way less time on your computer

Posted: 28 Apr 2012 10:34 AM PDT

Spring has sprung, the sun is shining, the air is fresh, the verdant buds are beginning to flower, yet we’re still sitting inside, typing away feverishly in a Reddit argument.

What the heck is wrong with us?

In an effort to promote the common good, we’re telling the world about Spinlister, a groovy startup that launched just a couple weeks ago. Put simply, it’s an Airbnb for bikes.

Yes, you, the laptop-bound gadget addict, can check out and rent a really cool pair of wheels in your own (or a destination) neighborhood. The bicycles are hella cool, the prices are reasonable, and the concept is perfectly timed.

VentureBeat caught up with Spinlister founder Will Dennis for a heart-to-heart about Spinlister, bike culture, and the fun side of running a startup about bicycles. Also, Dennis gives key details on how biking can make you sexier and get you dates.

Read it, then get yourself on a bicycle and go enjoy the weekend outside.

VentureBeat: Spinlister looks a lot like Spinster — has that occurred to y’all? Maybe it’s all in my subconscious, but I just get the mental image of old maids on bicycles…

Will Dennis: We have heard that, but to be honest we’re relatively insulated from the spinster community (knock on wood), so we thought Spinlister sounded great. And honestly, if these old maids have bicycles, we’d love to talk rentals with them.

VB: In San Francisco, we just got over a nasty rainy spell and have been enjoying some amazing weather. Has Spinlister seen any additional traffic (no pun intended) due to that?

WD: Yeah, we see some spikes during the sunnier periods. We also have a good number of people renting bikes in advance to even it out.

VB: What’s been going on with y’all since your launch? What have you been doing with your $450,000 in funding?

WD: We’ve been building out our product, talking to users, improving the site and experience as much as we can, and taking lunchtime bike rides.

We’re not spending too much money right now, really saving up for that special someone. That special someone being two special someones: an iOS and a Ruby on Rails dev.

VB: What’s coming up over the next few months for you? New cities, new features, etc?

WD: We’re working on developing a few new markets. L.A. and Portland look like the front runners right now, but we’re really taking it on a city-by-city basis. Some of the smaller cities may open up soon as well.

It’s really all about judging when there’s a solid number of quality bikes and an enthusiastic community.

We’re also adding some new features to make the process of renting a bike even more seamless and easy. We’re excited about where we are but even more excited about what’s to come.

VB: Why is biking important, socially, ecologically, economically, or otherwise?

WD: Biking is important because it is the best way to move from point A to point B, all factors considered. Whether you’re looking to improve your health, your savings, your daily commute, your travel, the environment, or your recreation, a bike can help.

I’d actually throw improved sex appeal into that list as well.

VB: Why is biking so popular right now? Is it more than just the hipster thing to do?

WD: Bikes are a great, individual mode of urban transport. As people become more and more urban, I think it’s a natural fit; and as young people become more car-apathetic, transportation options have opened back up.

Biking is one that makes a lot of sense and is a whole lot of fun.

And as with expensive coffee and microbrews, the biking hipsters may be setting a trend that the main stream is soon to adopt.

VB: Do you have a favorite story about a Spinlister user or bike-rental experience?

WD: My favorite story so far is actually about a girl who rented my bike. It’s called the Blue Lady Killer, and apparently it’s just as effective with men.

Some guys at Central Park struck up a conversation with her and now she’s going on a date with one of them. Proof in review number five.

Also, the international willingness to use Spinlister has been a pleasant surprise as well. We’ve had people rent from six or seven continents (still waiting on Antarctica). My cofounder Jeff, my girlfriend, and I all went out to dinner with a renter from South Africa two weeks ago.

We’re starting to see the people who use Spinlister as adventurous, easy going, and fun. It’s been great meeting as many people involved in the Spinlister community as possible.

VB: What’s the coolest bike listed on the site right now, in your opinion?

Sort of a tough question, because I will be permanently biased towards my own Blue Lady Killer. We do, however, have a glow-in-the-dark, fixed-gear track bike that’ll be a head turner on night rides.

Really though, I’ve been so excited by the quality of bikes on the site. They’d all be a blast to ride.

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VBWeekly, the paranoia edition! Featuring the insecurity of at least 3 CEOs

Posted: 28 Apr 2012 10:11 AM PDT

Holy moly, what a week it’s been! As one of our astute editors pointed out, paranoia (that some other company is stealing your ideas, getting ahead at your expense, etc.) seemed to be a theme this week.

Here’s the recap:

That’s all for this week. And remember, like the fella said, just because you’re paranoid don’t mean they’re not after you.

Have a great weekend!

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FCC points to rogue Google engineer over Street View Wi-Fi snooping

Posted: 28 Apr 2012 09:59 AM PDT

google street view car

While Google got off easy over its Street View data mining case with the FCC — it was only charged a $25,000 fine for obstructing the agency — the full report of the investigation, released today by Google, raises new questions.

The report (embedded below) is heavily redacted and blacks out individual names, according to the LA Times, who was able to get an early look at it. It blames one “rogue engineer” in particular for intentionally creating software for Street View cars that grabbed personal data, including e-mails, search histories, and passwords, from unprotected Wi-Fi networks.

Notably, Google has repeatedly said the data collection was “inadvertent.” But the FCC report offers up some evidence that makes us think Google had to be aware of it somehow. The unnamed engineer — who invoked his 5th Amendment right and didn’t speak with the FCC — told two other engineers (one a senior manager) that he was grabbing the data. The report also claims the engineer gave the Street View team a document in October 2006 that outlined what he was doing.

“While we disagree with some of the statements made in the document, we agree with the FCC’s conclusion that we did not break the law,” a Google spokesperson told VentureBeat over e-mail. “We hope that we can now put this matter behind us."

Writes the LA Times Jessica Guynn:

Those working on Street View told the FCC they had no knowledge that the payload data was being collected. Managers of the Street View program said they did not read the October 2006 document. An different engineer remembered receiving the document but did not recall any reference to the collection of payload data. An engineer who worked closely with the engineer in question on the project in 2007, reviewing all of the codes line by line for bugs, says he did not notice that the software was designed to capture payload data. A senior manager said he preapproved the document before it was written.

While Google continues to maintain it never authorized sucking up personal data, it’s hard to believe the company was completely unaware of what was happening. It’s also hard to trust Google at this point, which first denied that it gathered any data, only to later admit that gobs of personal data was collected by its Street View cars.

Google still hasn’t divulged the identity of the engineer responsible for the data snooping software. According to the FCC report, he was a part-time engineer who was interested in collecting data from unprotected networks to potentially benefit Google’s other services.

Photo via Justin Taylor/Flickr

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Must-read for founders: A VC explains how to build a killer value proposition

Posted: 28 Apr 2012 09:45 AM PDT

On the surface, value propositions seem incredibly straightforward. I'd argue that this is why, in practice, they're often given such short shrift.

In reality, getting a value proposition right requires some focused thinking and structured analysis, some of which I'll preview here. Given my particular background, much of what I recommend will have a bias to B2B startups — though, in many instances, I think that you'll find applicability to virtually any endeavor.

I recently lectured to a group of students and aspiring entrepreneurs as part of my series of talks at the Harvard Innovation Lab (feel free to presentation slides). For this particular session, we examined the DNA of a value proposition by stripping it down to its foundational elements and reassembling it, workshop-style, around a variety of new business ideas.

But before we dig in, let's define a value proposition.

In its simplest terms, a value proposition is a positioning statement that describes for whom you do what uniquely well. It describes your target buyer, the problem you solve, and why you're distinctly better than the alternatives.

One of the classic mistakes of building a value proposition is diving headlong into the solution definition phase before really understanding the problem you're looking to solve. To understand whether it's a problem worth solving, I recommend exercising four U's:

  • Is the problem unworkable? Does your solution fix a broken business process where there are real, measureable consequences to inaction?
  • Is fixing the problem unavoidable? Is it driven by a mandate with implications associated with governance or regulatory control? For example, is it driven by a fundamental requirement for accounting or compliance?
  • Is the problem urgent? Is it one of the top three priorities? In selling to enterprises, you'll find it hard to command the attention and resources to get a deal done if you fall below this line.
  • Is the problem underserved? Is there a conspicuous absence of valid solutions to the problem you're looking to solve? Focus where there's whitespace, not scorched earth.

Problems worth solving yield a decisive "yes" to the majority of these questions.

Next, ask yourself whether the problem is blatant and critical. Problems that are blatant and critical are far more acute that those that are latent and aspirational. Blatant and critical problems stand in the way of business. They put careers and reputations at risk and whiten knuckles. Latent problems are unacknowledged, which means they often require costly missionary selling. Aspirational problems are optional, which is the hardest of places for a B2B startup to sell. Though in B2C, they can be drivers as people look for things like status or fashion.

Now that you've determined what problem you're solving and validated its criticality, it's time to define your solution. The most urgent question to ask is: What is your compelling breakthrough?

Think of 3D. What unique combination of discontinuous innovation, defensible technology, and disruptive business model are you bringing to bear and what makes it truly compelling — not just to you and your colleagues, but to your most skeptical customer?

Discontinuous innovations are the opposite of marginal improvements; they offer transformative benefits over the status quo by looking at a problem differently. Defensible technology offers intellectual property that can be protected to create a barrier to entry and an unfair competitive advantage. Disruptive business models, which are discussed in depth here, yield value and cost rewards that help catalyze the growth of a business.

Groupon is a good example of a disruptive business model that has changed the face of price-based promotions by using crowdsourcing principles to aggregate demand around deals.

As an investor, I look for non-disruptive disruptions — that is, technologies that offer game-changing benefits without requiring any modification to existing processes or environments.

When VMware popularized the hypervisor, it did so with a non-disruptive disruption—all benefit without much in the way of adoption hurdles. The same is true for Akiban, one of my more recent investments that's innovating in database technology to yield 10-100x improvements in the speed of relational data access without any changes to applications or risk to data. That's a non-disruptive disruption.

Non-disruption is critical because the gain you deliver will be discounted by the pain of adopting your solution, plus the inertia of vendor risk that every startup levies by virtue of being small. This means that you must deliver an order of magnitude improvement over the status quo to make the cut.

If you can't deliver a 10x promise, customers will typically default to "do nothing" rather than bearing the risk of working with a startup. That's the harsh truth.

Now that you've defined the problem you're solving, evaluated the gain/pain ratio and discovered a problem truly worth solving, you're in a good position to build your value proposition.

At the center of that value proposition is you. What problems do you understand uniquely well? What can you deliver uniquely well? What sort of disruptive business model can you bring to bear? Be true to yourself and play from a position of strength. A little self-awareness can go a long way in crafting a value proposition with power.

Credit is due to my colleague Adam Berrey for his thinking on the importance of segregating needs.

Michael Skok is a general partner at North Bridge Venture Partners. His investments include Apperian, Akiban Technologies, Acquia, Unidesk, and Demandware (NYSE: DWRE).

Top image courtesy of Yuri Arcurs, Shutterstock

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