The My Baby franchise passed a million units sold back in May, and is now at nearly 2 million sold worldwide; it’s been one of the few bright spots for beleaguered publisher SouthPeak. It was somewhat surprising, therefore, to discover earlier this month that SouthPeak had lost the franchise.

As it turns out, Cooking Mama publisher Majesco secured the rights, and because of SouthPeak’s financial situation, we had guessed that perhaps the publisher didn’t pay developer Nobilis on time.  It’s beginning to look like we were right. SouthPeak has sued Majesco, claiming that Majesco does not have the rights to legally publish My Baby 3 & Friends, but Nobilis is clearly aligning itself with Majesco and is none too pleased with SouthPeak’s suit.

Arnaud Blacher, Managing Director at Nobilis, told IndustryGamers, “We vigourously contest the statement made by SouthPeak. The rights of My Baby 3 have been legally transferred to Majesco and in the strict respect of the previous contracts signed with SouthPeak. We confirm that all the contracts signed with SouthPeak in the U.S. or in the U.K. have been terminated after uncured breaches from Southpeak notably for non payment. We also confirm that we brought the litigation with SouthPeak to court to defend our rights. We remain very confident on the outcome of these legal actions.”

Rockstar Games’ Red Dead Redemption has been a breakout success for publisher Take-Two. The company today revealed as part of its second quarter fiscal results that the game had already sold-in (meaning sold to retail, or shipped, not sold through to consumers) 5 million units worldwide in just three weeks since the title launched.

Rockstar said from the beginning that Red Dead would be their “most ambitious game to date,” and the title is currently on a sales path far better than most analysts had expected. Mike Hickey of Janco Partners recently said that the game likely cost around $70 million to develop and would need to sell about 4 million copies to just break even. Based on today’s announcement from Take-Two, it would seem that Red Dead will indeed be a profitable project for the company.

The game is proving immensely popular, and fans will no doubt want to hold onto their copies since new DLC is being planned through this fall.

With E3 now just a few short weeks away, both Microsoft and Sony are preparing to make a big splash at the annual expo with their respective motion platforms. Microsoft has been hyping its Project Natal for nearly a whole year now, ever since the company first unveiled the motion camera at last year’s E3. We’ll find out much more about its capabilities, pricing and games at the world premiere event kicking off E3 on June 13. But just how successful will this Natal experiment be?

While Microsoft is clearly very optimistic and believe they’ll “sell millions and millions,” former Microsoft studio manager Scot Bayless (who also was a Senior Producer at Sega of America when the 32X peripheral launched for the Genesis) isn’t so sure that Natal will succeed. He thinks the peripheral could suffer a similar fate as the 32X.

“When I met with Microsoft in 2008 to look at Natal I asked: ‘When will you integrate this into the 360?’” Bayless commented in the latest issue of Retro Gamer [thanks NowGamer]. “Their response was: ‘We’re probably going to wait and see on that.’ To which I said: Then you’re going to fail.’”

Bayless, who also held senior roles at EA, Midway and Capcom, believes that Natal will ultimately split developers and the market. “Plays like this always fragment and the disincentive to developers is powerful; when I’m spending tens of millions on a game, the last thing I want to do is lose 90 per cent of my market,” he lamented.

This week an industry source pegged Natal at $149 – if true, the device’s price point will be much higher than many analysts thought, and would be another obstacle for mass adoption.

It’s time once again for our monthly Q&A column with Wedbush Morgan analyst Michael Pachter. In this “Pachter’s Podium,” we chat with Pachter about whether or not Red Dead Redemption can really reach GTA status, what will happen to Infinity Ward and the Modern Warfare brand, the future of PSP and more. Check it out.

IG: Alex St. John recently argued that high budget console titles couldn’t make the switch to digital when the time comes to do so. Will this render current console developers extinct, or will we just see an evolution of that content?

Pachter: I think Alex is one of the most brilliant people I’ve met, and am hesitant ever to disagree with him, as he generally thinks rationally and his conclusions are sound. In this case, I think he’s guilty of a bit of hyperbole. Alex says that “games designed for retail distribution are simply dead in an online world.” This is certainly true, once we have a world in which online gaming is the only option. However, that is not true today, and is not likely to be true for many years. Until a significant majority (more than 80%) of households are connected to high speed Internet, we will likely not see publishers mandating digital downloads or streams of games. The fact is that only around 35% of U.S. and European households have fiber, cable or DSL connections today, and until that penetration rate more than doubles, console games will continue to do well. So while I don’t disagree with Alex that once we have nearly complete broadband adoption in the U.S. and Europe, we’ll see a nearly complete migration to online gaming, I don’t think that the extinction of developers is imminent.

IG: Take-Two has made comments that they consider Red Dead Redemption to be a blockbuster franchise. They said it’s their “most ambitious game to date.” Will RDR really be the next GTA for Take-Two or are they just blowing smoke to validate their purportedly large investment in the game?

Pachter: I’m sure that the quality of Red Dead Redemption is extraordinary, and I expect the game to garner review scores of around 90. Whether the game is a blockbuster franchise will depend upon whether the game resonates with a large segment of the market. The trick in getting a game to sell a lot of units is not as simple as saying it will be a blockbuster. Rather, the game has to be great (likely), has to appeal to a large potential audience (questionable), and has to have solid marketing support (likely). I suppose that you can see where I’m going—I am not sure that a game set in the late 19th century has tremendous mass appeal. I would have said the same for Assassin’s Creed, Prince of Persia, God of War, Dante’s Inferno and any other “period” pieces, yet most of these sold quite well. My bias is that a game that is set in the U.S. West will not be particularly appealing to European audiences, and a game where the most powerful weapon is a Gatling gun will not be particularly appealing to U.S. audiences. With that said, I suppose that the game could sell 2 – 3 million units with a review score of 85 or more and solid marketing, and that’s what I’ve modeled it to sell. I remain skeptical that the game will be considered a “blockbuster franchise,” and certainly do not expect sales to rival those of GTA.

IG: Do you think in hindsight that Activision regrets firing Jason West and Vince Zampella, given the negative PR, the launch of Respawn and signing with EA and the potentially devastating impact it’s had on Infinity Ward?

Pachter: I think that Activision regrets the situation that led to the firing of Jason West and Vince Zampella. The parties appear to have had creative differences, likely about the direction of the Modern Warfare franchise, and it’s clear that Activision decided that it was in their best interests to terminate West and Zampella. I think that once that decision was made, the consequences were clear. It is hard to imagine that West and Zampella would simply retire, and so it seems to me that Activision should have anticipated that they would plan a competitive product, and would solicit former co-workers to join them. I don’t know whether Activision anticipated the negative press, and am pretty confident that they don’t believe that the lasting impact will be “devastating” (as you put it). I don’t think that Infinity Ward will be devastated, given that they will likely retain three-quarters of their employees, and I think it is highly likely that future games based on the Modern Warfare brand will be successful. It’s likely that the gaming press, which is merciless to begin with, will give future Infinity Ward games lower review scores than in the past, but my expectation is that they will still be high scores overall. And while I think that many consumers will be aware that the “creators” of Call of Duty and Modern Warfare are no longer with Activision, the majority of consumers will either not know or will not care enough to shun future games. With that said, I think that it is likely that future games will sell fewer units in the past, primarily due to increased competition from Respawn, DICE and EA games that will likely be in the same or similar genres.

IG: With Nintendo possibly looking to launch the 3DS later this year, do you think Sony will announce a 3D handheld, or what do you think they’ll do to reinvigorate their portable business?

Pachter: I’m not sure what Sony has planned for the portable business. The PSP sounded like a brilliant idea when it was conceived (essentially a portable console for serious gamers, differentiated from the “starter” devices from Nintendo that were marketed to younger audiences), and it’s been modestly successful, but it has never quite performed as well as people expected. I think that the best thing Sony could do to reinvigorate the PSP is to cut price, and yet I’m not sure that they can afford to do so. The PSPgo is a great device, but consumers have voted with their wallets, and low sales levels suggest that the price is just way too high. While I think that the PSP would sell out everywhere at $99, I don’t think we’ll see a price cut below $149 for the 3000 [model] this year, and don’t think the PSPgo will drop to any lower than $199. With sales like this, it’s hard to envision that Sony will create an even more expensive PSP with 3D capability.

IG: You said in one of our previous columns that you thought the DSi XL would not sell well at launch because it was priced too high and that Nintendo killed it with the 3DS announcement. As it turns out the XL had a solid start with 141,000 units sold in its first month. What’s your reaction?

Pachter: I suppose that the audience for the DSi XL consists largely of people who don’t read IndustryGamers, as those who bought a soon-to-be-obsolete device did so with smiles on their faces. There is no question that the DSi XL is a great device, and it comes bundled with software, so the price point is actually reasonable. I suppose that once Nintendo launches the 3DS, sales of the DSi XL will suffer, as a greater percentage of the population will be made aware of its impending obsolescence.

By James Brightman

Video Game Franchise