Neowin.net

Goldman Sachs Global Investment Research in a research note reports the video game industry may grow more slowly than expected in 2003. In October 2002 the firm forecasted the growth for 2003 could be ten to twelve percent, but at present the five to ten percent range seems more likely.

Even the updated estimate could prove to be optimistic, taking into account the sober outlooks from Activision and THQ. Industry-related stocks are mostly likely to fluctuate prior to traditional catalyst E3 Expo, takes place.

According to Goldman Sachs Electronic Arts will likely benefit from its size and marketing muscle, but the pivotal factor for the company's fiscal-year results will the performance of The Sims Online. The publisher can count on an additional 20 to 25 cents on earnings per share for this fiscal year, which ends in March, if The Sims Online gets 500,000 subscribers; results will be hurt if no more than 350,000 subscriber are realized.

THQ and Activision shall have to rely heavily on the success of their new titles in 2003. The latter might be able to improve its outlook through acquisitions of either software or other game companies.

News source: Reuters

The timing of the outage was particularly bad, coming as it did at the opening of business on the East Coast of one of the biggest business days of the year, as people returned from holiday vacations. "It's a time when people are coming back to work. When systems fail, it's a double insult. This was the worst time for something like this to happen," Gardner said. "There might have been a small technical reason for this that will be easily fixed, but the perception among users will be, `I needed tis, and they weren't there for me.'" Moreover, switching to an alternative instant message provider is easy, Gardner said. "The market will be harsh to those that don't perform well, because the cost of switching is so very low," he said.

Surprisingly, Microsoft agreed.

"We agree that a large degree of reliability is necessary," Grothaus said. "We are taking steps to see to it that we don't see outages like this again."

But Michael Sampson, analyst with Ferris Research, said the impact of the outage on Microsoft will not be significant. He said Microsoft's instant message service had a July 2001 outage that lasted eight days.

"It's certainly not good for Microsoft, but those people that are wedded to MSN will keep using it. If they were paying for it, they would be a bit more annoyed," Sampson said.

It's uncertain just how many users were affected. Sampson said he estimates that Microsoft and America Online are the instant message market leaders, with about 30 million to 35 million active users each. AOL claims it has 180 million registered users, and Microsoft says it has 75 million, but many of those accounts are duplicates -- more than one account per person -- and inactive.

Microsoft will likely become market leader because of its instant message technology being included in Windows XP; when users register XP they are strongly urged to sign up for an MSN Messenger and Passport account, Sampson said.