Nintendo’s amazing triumph in Japan may doom the company internationally

According to Japanese gaming bible Famitsu, Nintendo (NTDOY) 3DS sold 333,000 units in the week ending December 16, while Sony’s (SNE) PS Vita limped along at 13,000 units, the new Wii U did an okay 130,000 units and the PlayStation 3 managed to sell 46,000 units.  The utter hardware domination of the 3DS is reshaping the Japanese software market. Franchises that were thought to be fading have been revitalized in their portable versions. The 3DS version of the ancient Animal Crossing series, famed for being the game where nothing happens, hit a staggering 1.7 million units last week in Japan. Inazuma Eleven sold 170,000 units in its launch week, up from 140,000 units its DS version managed in 2011.
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Nintendo’s portable console 3DS had a muted start in its home market in the spring of 2011. Many thought that Sony would have a fair shot at competing with Nintendo once Playstation Vita launched at the end of 2011. But once Nintendo executed an aggressive price cut for 3DS in the summer of 2011 and then launched a large-screen version of the console in mid-2012, the gadget has grown into a Godzilla in Japan, demolishing both Sony Vita and aging tabletop console competition.
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3DS is doing well also in America, where its lifetime sales are moving close to the 6 million unit mark this holiday season. According to NPD, the 3DS sales in the United States topped 500,000 units in November. That’s a decent number, though far from the torrid volume the portable is racking up in its home market. The U.S. November video game software chart was dominated by massive home console juggernauts: new installments of Call of Duty, Halo and Assassin’s Creed franchises shifted more than 13 million units in retail. At the same time, the Japanese software chart remains in a ’90s time warp, dominated by Nintendo’s musty masterpieces: Super Mario Brothers, Pokemon, Animal Crossing, etc.
Japanese and American tastes have always been different. But what we are witnessing now is a particularly fascinating divergence. American consumers are spending more of their time and money on smartphone and tablet games, while console game spending is increasingly focusing on massive, graphically stunning blockbuster titles on Xbox360 and PS3. The casual gamers are shifting to mobile games, while hardcore gamers remain attracted to sprawling epics on home consoles. The overall video game spending in America keeps declining month after month, as casual titles and mid-list games slide. But the Triple A whales like the Call of Duty series are doing better than ever.
In Japan, Nintendo has been able to battle back iPhone and Android game invasion with a nostalgic series of portable games that basically recycle the biggest hits of ’80s and early ’90s. Mario, Pokemons and other portable heroes are slowly losing their grip on U.S. and European consumers. But in Japan, some form of national nostalgia is keeping Nintendo on track.
The problem here is that the Japanese success of the 3DS may now be convincing Nintendo that it does not have to reconsider its business strategy. The smartphone and tablet game spending continues growing explosively across the world. Unlike console games, mobile game sales in China are legal. The global gaming spending is shifting towards new hardware platforms even as console mammoths like Halo still reign in America. At this critical juncture, Nintendo has managed to cocoon its home market in a web of nostalgia, turning the 3DS console and its Eighties left-over franchises into epic bestsellers yet again.
This means that there is no sense of urgency to push Nintendo into rethinking its long-term plans. The company may continue simply ignoring the smartphone and tablet challenge, designing new portable consoles and the 28th Mario game to support it. Twenty years ago, Japan’s insularity doomed its chances to succeed in the mobile phone business. And now the idiosyncratic nature of Japan may be leading its biggest entertainment industry success astray.

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European Commission wades into global tech patents war

BRUSSELS (Reuters) - EU regulators are poised to accuse Samsung of breaking competition rules in filing patent lawsuits against rival Apple, in the EU's first formal challenge to the consumer electronic industry's patent wars.
"We will issue a statement of objections very soon," the European Union's competition chief Joaquin Almunia said on Thursday, referring to the Commission's charge sheet.
Technology companies are increasingly turning to the European Commission as the EU's competition authority, to resolve their disputes, with the EC also investigating Google and Microsoft.
Apple and Samsung, the world's top two smartphone makers, are locked in patent disputes in at least 10 countries as they vie to dominate the lucrative mobile market and win over customers with their latest gadgets.
The filing of competition objections is the latest step in the Commission's investigation. After notifying Samsung in writing the company will have a chance to reply and request a hearing before regulators.
If the Commission then concludes that the firm did violate the rules, it could impose a fine of up to 10 percent of the electronic firm's total annual turnover.
Other current cases under investigation by the EC involve Google-owned phone maker Motorola Mobility, Microsoft and Apple. Microsoft has also complained about Google while Google has complained about MOSAID, a so-called patent enforcement company which makes money by licensing the use of acquired patents.
PATENT WAR
Patent lawsuits can result in a competitor being barred from selling its products in a jurisdiction while the case in investigated and can yield huge fines.
In August Apple won a major victory in the smartphone patent war when a jury in a California federal court ordered Samsung to pay $1.05 billion in damages.
The court found Samsung had copied critical features of the iPad and iPhone. The Samsung products run on the Android operating system, developed by Google.
On Tuesday, Samsung said it was dropping an attempt to stop the sale of some Apple products in Britain, France, Germany, Italy and the Netherlands, though it did not say it would halt its court battle for compensation.
But Samsung has also had successes. U.S. patent authorities rejected Apple's "pinch-to-zoom" touch screen patent case in an initial ruling on Thursday, and Samsung also won a preliminary invalidation of Apple's "rubber-banding" patent in October.
That patent allows a user with a touch screen to bounce back to the image on the screen if the user goes beyond the edge.

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Acer will beat Google to market with its own $99 tablet

The Nexus 7 is still an amazing value at $249. But word around the block is that Google (GOOG) and ASUS (2357) are working on a $99 Nexus tablet. But now, per PhoneArena, it’s apparent that Acer (2353) is preparing to beat Google to the punch with a 7-inch Android 4.1 2Jelly Bean-powered tablet that will reportedly sell for $99. Naturally, a lower-priced tablet will come at the expense of less powerful specs. Acer’s Iconia B1 looks to have a Mediatek dual-core 1.2GHz processor, PowerVR SGX 531 GPU, 512MB of RAM, 8GB of storage, Bluetooth 4.0, GPS, microSD card and SIM card slot. For $99, its display also has a much lower resolution than the Nexus 7: 1024 x 600 pixels. The Iconia B1 has already cleared the Federal Communications Comission and will likely make an appearance at the Consumer Electronics Show in January.

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Arris rises on plans to buy Google's set-top unit

 Arris Group's stock rose to its highest level in more than five years on Thursday following news that it is buying Google's TV set-top business for $2.35 billion, which could be a transformative deal for the relatively small company.
But not everyone was upbeat about Arris' ability to benefit. One analyst cut his rating on the company, saying it may have paid too much.
THE SPARK: On Wednesday Google Inc. said it was selling the division, which it had swallowed up in its acquisition of Motorola Mobility earlier this year, to Arris in a cash-and-stock deal.
THE BIG PICTURE: The transaction gives Arris Group Inc., a provider of high-speed Internet equipment, an opportunity to become a bigger player in the delivery of video.
In the past year ending in September, Motorola's set-top operations generated $3.4 billion in revenue. That makes it twice as big as Arris, whose revenue totaled $1.3 billion during the same period.
If the deal wins regulatory approval, Arris expects to take over the division before the end of June.
THE ANALYSIS: Arris may have overpaid for the Motorola business, said Jefferies' James Kisner in a client note Thursday. He had anticipated a sale price between $1 billion and $1.5 billion, given his worries that the division's revenue will decline.
While he acknowledged that the deal could hold some benefits for Arris, such as providing a new, strong influx of cash from the business, Kisner said that buying the set-top business "dramatically tempers" Arris' growth rate.
Kisner cut Arris to "Hold" from "Buy" and reduced its price target to $14 from $17.
SHARE ACTION: Shares of Arris Group Inc. rose 47 cents, or 3.2 percent, to $15.01 in afternoon trading. The stock hit $15.90 earlier in the session, its highest point since July 2007.

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Competition hots up for 4G mobile phone airwaves

 Seven companies were named on Thursday as bidders for the superfast 4G mobile broadband radio frequencies to be auctioned off in Britain next month by industry regulatorOfcom.

Existing mobile network operators EE, Vodafone, O2 owner Telefonica and Hutchison, which is behind Three, will be vying with O2's former owner BT, managed networks firm MLL Telecom and Hong Kong's PCCW Limited, the regulator said.

EE, the UK's biggest mobile network operator, is a joint venture between France Telecom andDeutsche Telekom and has already launched 4G services in some major British cities by reallocating its existing airwaves.

Ofcom calculated that giving EE a head start this year would put an end to the networks seeking to delay the auction further in a squabble over who should be offered what spectrum and therefore give Britain a chance of catching up with the United States and other European countries in the deployment of superfast mobile networks.

"I think you'll find the UK's position in relative terms transformed very fast," said Ofcom's chief executive Ed Richards.

The auction has been designed, he said, to deliver maximum benefit to consumers by getting mobile broadband networks built, which are capable of operating at five to seven times the speeds of 3G, while ensuring that operators pay the right amount of cash rather than the most possible to the government.

The sell-off of 3G airwaves in 2000 raised 22.5 billion pounds for state coffers, but left the operators saddled with debt, prompting complaints that they could not afford to invest in all the infrastructure needed to roll out new services.

"The backdrop to this is utterly different," Richards said. "When the 3G auction was done you were still at the height of the dotcom boom. We are in the so-called age of austerity now."

Earlier this month the government budgeted for a 3.5 billion-pound windfall from the auction next year, but Richards said that prediction had not come from Ofcom.

"The real economic benefit here is in the benefit to consumers and the economy from the deployment of these highly valuable services," he said. "If we were to calculate the estimated economic benefit of that it would massively dwarf the revenues from the auction."

Analysts at Espirito Santo said they were not surprised by the bidders, and they did not expect an overheated auction as was seen in the Netherlands, where 3.8 billion euros were raised in a 4G spectrum sale last week.

They noted that fixed line operator BT had previously said it only wanted to pick up niche amounts of spectrum to support its existing strategy and the other two potential new entrants were also likely to bid on a speculative or opportunistic basis.

"The way the auction is designed ... ought to allow the incumbent mobile network operators and niche players to pick up what they need without going head to head," they said.

"We remain comfortable with the 1 billion pounds ... we have pencilled in for each licence into our Vodafone, France Telecom/Deutsche Telekom and Telefonica models."

MLL Telecom said it was bidding to complement its existing spectrum allocation, and to increase the infrastructure it has available for its mobile operator customers. "We are not looking to supply a consumer or enterprise service," chief commercial officer Karl Edwards said.

SPECTRUM COMBINATIONS

Ofcom said a mix of 28 blocks of bandwidth were up for grabs this time, whereas only five licences were available for 3G.

Operators need to use a combination of different blocks to provide superfast coverage across the country, typically using 800 megahertz radio frequencies to serve rural areas and high-capacity 2.6 gigahertz frequencies for urban areas. The lower-frequency 800 MHz band was freed up when analogue terrestrial TV was switched off.

One portfolio of spectrum has been reserved for a fourth national operator, whether Three, which is the smallest operator today, or another, Richards said.

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Omanis hope first local vote is stepping stone towards change

MUSCAT (Reuters) - Hoping for jobs and democratic change, voters in Oman cast ballots in their first municipal election on Saturday, a sign of modest reform in response to protests inspired by the Arab Spring.
The small Gulf oil producer, ruled since 1970 by Sultan Qaboos, sits opposite Iran on the Strait of Hormuz, the conduit for nearly a fifth of globally traded petroleum.
Its only other elections are for the Shura Council, a body that has some limited legislative powers. Increased democracy was a main demand of protesters in Omani cities during the Arab uprisings last year, along with jobs and an end to corruption.
"We feel the change is coming with this new election that will give us the opportunity to ask officials to openly explain their actions and admit their mistakes," said voter Harib Khalfan in the Seeb district of Muscat.
At the polling station in Seeb, set up in a schoolhouse, about 50 people queued to cast their ballots while others stood in the shade and discussed which way to vote.
Voting in the capital and nearby coastal town of Barka appeared quieter than during last year's election for the Shura Council. Activists from last year's protest movement welcomed the election but cautioned that it was too early to tell whether it would lead to meaningful change.
"It's good. This is what we've been protesting for, but it's too early to celebrate. Let's wait and see," said activist Ismail al-Rasbi.
Some 1,475 candidates are seeking places on 192 local councils in the country of 2.8 million people. There were no reports of protests or other incidents across the country on Saturday afternoon. Each polling station Reuters visited had a police car parked outside to prevent trouble.
ARAB SPRING
Protests erupted in several Omani towns early last year inspired by the Arab Spring uprisings, as demonstrators blocked major roads and went on strike demanding better pay, more jobs, action against graft and some democratic changes.
But Sultan Qaboos remains a popular figure in a country that was mostly undeveloped and faced war in its Dhofar region when he seized power from his father.
After the demonstrations, he swiftly reshuffled his cabinet and the government promised to create thousands of jobs, announced plans for municipal polls and granted the Shura Council some legislative power, with the right to approve or reject draft laws. The sultan, however, retains the final say.
Two of the Shura Council members elected last year were activists from the industrial town of Sohar, the site of the biggest protests. Nine council members now sit in the 28-strong cabinet
"I am here to vote because I feel the elections will eventually create a government that will entirely consist of an elected cabinet of ministers," said Maryam Shariff, a 32-year old university lecturer, as she waited to vote.
Although municipal councils have only limited powers, some voters expressed hope they might spur job growth via their influence over local businesses.
"I am here on the guarantee that the person I am voting for will work hard to find us jobs," said Badr Saif, a 24-year old school dropout from Barka.
Oman says it created 52,000 public sector jobs in the first 10 months of this year, and at least 22,000 in the private sector, cutting the number of registered unemployed by three-quarters to just over 17,000.

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Netanyahu lauds Kerry nomination for U.S. secretary of state job

JERUSALEM (Reuters) - Israeli Prime Minister Benjamin Netanyahu on Saturday welcomed the appointment of his personal friend John Kerry as U.S. secretary of state and described him as "a known supporter of Israel's security".
President Barack Obama nominated Kerry on Friday, calling the veteran U.S. senator the "perfect choice" as America's top diplomat.
Netanyahu said in a statement: "I congratulate John Kerry on being chosen for the position of U.S. Secretary of State. Kerry is very experienced and is a known supporter of Israel's security."
But Netanyahu may find Kerry no less critical than his predecessor of Israel's policy of settlement building in the occupied West Bank, an area Palestinians want as part of a future state.
"When new settlements go up ... it undermines the viability of a two-state solution," Kerry told a Senate hearing.
Kerry will be the leading Cabinet member charged with tackling pressing global challenges, including trying to restart the stalled Israeli-Palestinian peace talks and Iran's nuclear standoff with the West.
Netanyahu, who has had frosty ties with Obama, also mentioned his good personal relations with Kerry in his statement.
"John Kerry and I are friends for many years and I greatly appreciated the fact that half a year ago, after the death of my father, he came to visit me during my mourning. I look forward to cooperating with him," he added.
While Obama put one important piece of his revamped cabinet in place, he held off on naming a new defense secretary.
The delay came in the face of a growing backlash from critics of former Republican Senator Chuck Hagel, who is considered a leading candidate to replace Leon Panetta at the Pentagon.
Officials in Netanyahu's office have privately voiced concern over the possibility that Hagel might take over at the Pentagon.
Some American Jewish leaders contend that Hagel, who left the Senate in 2008, at times opposed Israel's interests, voting several times against U.S. sanctions on Iran, and made disparaging remarks about the influence of what he called a "Jewish lobby" in Washington.
Asked last week about a statement by Hagel in 2006 that the "Jewish lobby intimidates a lot of people here," Senator Lindsey Graham of South Carolina said he would "have to answer for that comment" if he is nominated.

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Pope pardons Vatican butler

Pope Benedict XVI granted his former butler a Christmas pardon Saturday, forgiving him in person during a jailhouse meeting for stealing and leaking his private papers in one of the gravest Vatican security breaches in recent times.
After the 15-minute meeting, Paolo Gabriele was freed and returned to his Vatican City apartment where he lives with his wife and three children. The Vatican said he couldn't continue living or working in the Vatican, but said it would find him housing and a job elsewhere soon.
"This is a paternal gesture toward someone with whom the pope for many years shared daily life," according to a statement from the Vatican secretariat of state.
The pardon closes a painful and embarrassing chapter for the Vatican, capping a sensational, Hollywood-like scandal that exposed power struggles, intrigue and allegations of corruption and homosexual liaisons in the highest levels of the Catholic Church.
Gabriele, 46, was arrested May 23 after Vatican police found what they called an "enormous" stash of papal documents in his Vatican City apartment. He was convicted of aggravated theft by a Vatican tribunal on Oct. 6 and has been serving his 18-month sentence in the Vatican police barracks.
He told Vatican investigators he gave the documents to Italian journalist Gianluigi Nuzzi because he thought the 85-year-old pope wasn't being informed of the "evil and corruption" in the Vatican and thought that exposing it publicly would put the church back on the right track.
During the trial, Gabriele testified that he loved the pope "as a son loves his father" and said he never meant to hurt the pontiff or the church. A photograph taken during the meeting Saturday — the first between Benedict and his once trusted butler since his arrest — showed Gabriele dressed in his typical dark gray suit, smiling.
The publication of the leaked documents, first on Italian television then in Nuzzi's book "His Holiness: Pope Benedict XVI's Secret Papers" convulsed the Vatican all year, a devastating betrayal of the pope from within his papal family that exposed the unseemly side of the Catholic Church's governance.
The papal pardon had been widely expected before Christmas, and the jailhouse meeting Benedict used to personally deliver it recalled the image of Pope John Paul II visiting Mehmet Ali Agca, the Turkish gunman who shot him in 1981, while he served his sentence in an Italian prison.
The Vatican spokesman, the Rev. Federico Lombardi, said the meeting was "intense" and "personal" and said that during it Benedict "communicated to him in person that he had accepted his request for pardon, commuting his sentence."
Lombardi said the Vatican hoped the Benedict's pardon and Gabriele's freedom would allow the Holy See to return to work "in an atmosphere of serenity."
None of the leaked documents threatened the papacy. Most were of interest only to Italians, as they concerned relations between Italy and the Vatican and a few local scandals and personalities. Their main aim appeared to be to discredit Benedict's trusted No. 2, the secretary of state, Cardinal Tarcisio Bertone.
Vatican officials have said the theft, though, shattered the confidentiality that typically governs correspondence with the pope. Cardinals, bishops and everyday laymen write to him about spiritual and practical matters assuming that their words will be treated with the discretion for which the Holy See is known.
As a result, the leaks prompted a remarkable reaction, with the pope naming a commission of three cardinals to investigate alongside Vatican prosecutors. Italian news reports have said new security measures and personnel checks have been put in place to prevent a repeat offense.
Gabriele insisted he acted alone, with no accomplices, but it remains an open question whether any other heads will roll. Technically the criminal investigation remains open, and few in the Vatican believe Gabriele could have construed such a plot without at least the endorsement if not the outright help of others. But Lombardi said he had no new information to release about any new investigative leads, saying the pardon "closed a sad and painful chapter" for the Holy See.
Nuzzi, who has supported Gabriele as a hero for having exposed corruption in the Vatican, tweeted Saturday that it appeared the butler was thrilled to speak with the pope and go home. "Unending joy for him, but the problems of the curia and power remain," he wrote, referring to the Vatican bureaucracy.
A Vatican computer expert, Claudio Sciarpelletti, was convicted Nov. 10 of aiding and abetting Gabriele by changing his testimony to Vatican investigators about the origins of an envelope with Gabriele's name on it that was found in his desk. His two-month sentence was suspended. Lombardi said a pardon was expected for him as well. He recently returned to work in the Vatican.
Benedict met this past week with the cardinals who investigated the origins of the leaks, but it wasn't known if they provided him with any further updates or were merely meeting ahead of the expected pardon for Gabriele.
As supreme executive, legislator and judge in Vatican City, the pope had the power to pardon Gabriele at any time. The only question was when.

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Russia says it won't host Assad but others welcome

MOSCOW (AP) — Russia's foreign minister says Moscow would welcome any country's offer of a safe haven to Syrian President Bashar Assad, but underlined that Moscow itself has no intention of giving him shelter if he steps down.
Russia has repeatedly used its veto right along with China at the U.N. Security Council to protect its old ally from international sanctions, but it has increasingly sought to distance itself from Assad.
Foreign Minister Sergei Lavrov told reporters late Friday that countries in the region he wouldn't name publicly had asked Russia to convey their offer of a safe passage to Assad. He said that Russia responded by telling them to go directly to Assad: "We replied: 'What do we have to do with it? If you have such plans, you go straight to him.'"
Asked if Moscow could offer a refuge to Assad, Lavrov responded that "Russia has publicly said that it doesn't invite President Assad."
"If there is anyone willing to provide him guarantees, they are welcome!" Lavrov told reporters on board a plane returning from Brussels where he attended a Russia-EU summit. "We would be the first to cross ourselves and say: "Thank God, the carnage is over! If it indeed ends the carnage, which is far from certain."
Lavrov also said the Syrian government has pulled its chemical weapons together to one or two locations from several arsenals across the country to keep them safe amid the rebel onslaught.
"According to the information we have, as well as the data of the U.S. and European special services, the government is doing everything to secure it," he said. "The Syrian government has concentrated the stockpiles in one or two centers, unlike the past when they were scattered across the country."
U.S. intelligence says the regime may be readying chemical weapons and could be desperate enough to use them. Both Israel and the U.S. have also expressed concerns they could fall into militant hands if the regime crumbles.
Lavrov gave no indication that Moscow could change its opposition to sanctions against Assad. He assailed the West for failing to persuade the opposition to sit down for peace talks with the government, saying that "the Syrian president's head is more important for them than saving human lives."
Lavrov added that U.N. peace envoy for Syria, Lakhdar Brahimi, would visit Moscow for talks before the year's end.
He said that Moscow has also invited the revamped Syrian opposition leadership to visit.

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Iran a central issue for my next term: Netanyahu

JERUSALEM (Reuters) - Iran's perceived nuclear threat against Israel will be the central issue concerning Prime Minister Benjamin Netanyahu's government if he is re-elected in a month's time, the Israeli leader said on Saturday.
Netanyahu has set out a mid-2013 "red line" for tackling Iran's uranium enrichment project. The West says this programme is aimed at developing the means to build atomic bombs. Tehran denies this, saying it is enriching uranium for civilian energy.
"Preventing Iran becoming a nuclear (threat) is, I would say, the central aim in my next term if I earn the confidence of voters," Netanyahu told Israel's Channel 2 in a recorded interview.
Opinion polls have consistently shown Netanyahu's rightist Likud Beiteinu party as the clear front-runner for the January 22 elections, meaning he would be called upon to form a new coalition government.
Since announcing elections on October 9, Netanyahu discussed Iran nuclear programme in public less frequently than he had before setting the "red line" in a speech to the United Nations General Assembly on September 27.
But he told interviewers that he was dealing with the issue on a daily basis.

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