EA aims to be a “100% digital” company

Say what you will about EA, but the company definitely seems to be thinking ahead. Head of EA Labels, Frank Gibeau, has told GamesIndustry in an interview that EA will “be a 100% digital company, period.” Talking about the gaming industry and the rise of digital media, Gibeau believes that selling digital products directly to the consumer via the internet is the way of the future.

Retail partners probably won’t be too thrilled to hear that, but it’s the way the industry is moving in general. Gibeau says that while retail is a “great channel” and that the company has “great relationships” with its partners, EA will respond to customers who want to get games directly from the source.

Naturally, the company won’t completely abandon retail: “[I]f customers want to buy a game at retail, they can do that too. We’ll continue to deliver games in whatever media formats make sense and as one ebbs and one starts to flow, we’ll go in that direction.” Gibeau goes on to say that digital is the fastest growing segment of EA’s business, and that the company is preparing for the advent of streaming games via the cloud from the likes of Gaikai and OnLive.

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Congressional Republicans attack another job-creating American company

By David Roberts

Undaunted by their failure to catch so much as a single guppy, Republicans in Congress are paddling on with their fishing expedition through the Obama administration’s clean-energy initiatives. They are nothing if not dutiful.

The latest faux scandal (what are we up to now? a dozen?) has to do with the Ivanpah solar power plant, currently under construction in the Mojave Desert in southeastern California.

Here’s what we know about Ivanpah, a concentrated solar power (CSP) project being developed by BrightSource Energy. It started construction in October 2010, amid great fanfare from politicians like Arnold Schwarzenegger and Interior Secretary Ken Salazar. It is technically three separate, contiguous power plants, built in phases, with a total of 170,000 heliostat mirrors, spread across 3,600 acres, aiming sunlight at three solar power towers. It will have a gross capacity of around 392 megawatts and will be, when completed, the largest CSP installation in the world.

In April 2011, the project got a $1.6 billion loan guarantee from the Department of Energy (DOE), allowing it to scale up its already substantial private funding from, among others, NRG Solar and Google. A little over a year later, according to DOE, the project is about one-third completed and is employing over 1,700 people on site. When it’s finished it will “avoid 574,000 metric tons of carbon dioxide annually, equivalent to emissions of 110,000 vehicles” and “generate enough clean electricity to power approximately 87,000 homes annually.”

In other words, DOE’s investment has not failed. On the contrary, it’s kind of awesome! Everything’s going according to schedule. Jobs are being created. Barriers are being broken. If it proceeds according to plan, taxpayers won’t shell out anything, California will get tons of clean energy and jobs, and the U.S. solar industry will have a domestic success story. Plus the thing is just gorgeous to look at.

Who could possibly object to American jobs and energy? Serial car thief Darrell Issa and his merry band of fisherman (aka the House Oversight Committee), of course.

Why the concern? This Wall Street Journal piece contains the damning details. At least it contains the damning tone. The details turn out to be pretty unimpressive.

Here’s what happened: BrightSource had been scrambling for this Ivanpah loan for more than two years, since before Obama took office. All signs were positive. Problem was, a couple of deadlines were approaching. On March 31, 2011, the conditional agreement with DOE would lapse, and on April 1, “tortoise moving season” would start and delay the project for six more months, which may well have killed it. So BrightSource started sweating, hiring lobbyists, and pestering the DOE to finalize the damn thing. In early March it even proposed having its then-chairman John Bryson write his old friend, then-White House Chief of Staff William Daley, to plead with him to “quarterback loan closure.”

Is there any evidence that this last-minute volley of lobbying had anything to do with the loan guarantee being approved? No. The letter was never sent to Daley. Buried down in paragraph 20, WSJ reveals that when loan-program director Jonathan Silver caught wind of Bryson’s proposed letter, he responded within hours, telling him to tone it down, cut the “quarterback” crap, and chill out — the loan was “on track” to close before the deadline. (Like many DOE loans, it was held up by a plodding review from a passive-aggressive OMB.)

That’s it. As usual with these faux scandals, the media conspicuously fails to note that the last-minute lobbying and emails to the White House were all about hurrying up the review process, i.e., they came after the guarantees had been approved by DOE. There’s not a shred of evidence that political connections or lobbying affected any of the loan decisions made by DOE staff. Here, as with the other faux scandals, there is only dark insinuation.

Insinuation has no legal power, of course. These shows trials of individual DOE loans haven’t uncovered any wrongdoing, much less anything worthy of official censure or criminal charges. And House Republicans have been fishing for over a year now. But this is post-truth politics — they don’t need the reality of a scandal. That would be an unexpected bonus at this point. All they need is the atmospherics of scandal; they just need to keep floating broad charges and having the media cover them. The purpose is to keep DOE and Obama on the defensive, to hound them, to waste their energy, and to discredit clean energy.

If a thriving American business has to be sacrificed on that political altar, so be it.

——

For kicks, here’s a slideshow from DOE on their clean energy programs:

And here are links to three independent assessments of DOE’s loan program:

All these assessments found roughly the same thing: The program is making smart, low-risk investments and has cost over $2 billion less than expected. Unsurprisingly, the media has largely ignored them.

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News Corp. to Split Company in Two

Yielding to calls by shareholders, News Corp. announced Thursday that it will spin off its newspaper-dominated publishing unit into a separate company.

The plan comes after the company’s board, chaired by Rupert Murdoch, met Wednesday night to discuss the matter. Murdoch offered the following statement on Thursday:

“There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corporation’s businesses to grow to new heights, and enable each company and its divisions to recognize their full potential – and unlock even greater long-term shareholder value.”

The bisection would result in one company composed of entertainment properties like 20th Century Fox, Fox broadcast network and Fox News and another that will include publishing assets like The WSJ, The New York Post and HarperCollins book publishing.

Though newspapers are near and dear to Murdoch, who got his start running the Adelaide News in Australia, they contributed just 10% to revenues in the company’s most-recent quarter. The publishing unit has also produced bad press for News Corp., culminating in the News of the World phone-hacking scandal last summer, which led to the shuttering of that 168-year-old publication.

Image courtesy of Flickr, World Economic Forum

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RIM starts to cut jobs in company restructure

Last month it was rumored that RIM was planning to cut between 2,000 and 6,000 jobs as part of a restructuring effort to save the failing company. The Waterloo Record is now reporting that the layoffs have begun, with hundreds of employees being let go from the company overnight. Employees are being removed from a number of areas within the company, including sales and manufacturing, with severance packages being offered to those let go.

RIM has confirmed that the layoffs have begun, but didn’t go into exact details as to how many employees in total would be removed. RIM says that it will continue to cut jobs “as the company methodically works through a review of the business.”

It was previously reported that RIM had around 16,500 jobs worldwide, with positions to be cut back from sales, marketing, human resources operations, and legal. The company has also been shuffling its executives, with several stepping down over the last few weeks. That included RIM’s chief legal officer Karima Bawa, helping the company in the past with various patent suits and business deals.

[via Engadget]

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Buy a Coke — or the Company

This is a post from staff writer Robert Brokamp of The Motley Fool. Robert is a Certified Financial Planner and the adviser for The Motley Fool’s Rule Your Retirement service. He contributes one new article to Get Rich Slowly every two weeks.

Do you buy things that disappear or reproduce?

That’s the question that first prompted me to think hard about my financial future, way back in the mid-1990s. It came from a radio call-in program years ago when I was an elementary school teacher making $18,000 a year. The host explained how a caller could improve her finances. “The next time you want to buy something, instead consider buying stock in the company that makes it. Rather than buy a Coke, buy a share of Coke stock.”

I didn’t think much about money back then, other than being aware that I didn’t have much. I didn’t know much about stocks, IRAs, or the Fed. But the host explained how most of what we buy depreciates and eventually disappears forever. That also means, it then occurred to me, that the time I spent working to make the money that bought those items was essentially wasted; I worked so I could buy what amounted to nothing.

Contrast that, the host continued, with spending money on an asset, which has the potential to increase in value and, in most cases, can’t be consumed. (Well, sure, you could eat a share of stock, but check the carb count first.) You are spending your money on something that eventually can return the favor by paying you money. Do that enough, and you won’t need to work since your money will be doing all the work for you.

The sum of thousands of decisions
The crossroads of your financial future is your spending. It is the determinant of how much you keep, and how much someone else gets. For many, the flip side of spending is saving — but “saving” sounds so boring. It smacks of self-denial, which is why people have trouble doing it. Yet saving is spending, just on something that ideally appreciates rather than depreciates — something that reproduces instead of disappears. This is important before retirement (“I could buy that item, or I could buy the stock”) and in retirement (“To buy that item, I’ll have to sell stock”).

There are certainly great uses of money that can’t be put in a portfolio. A vacation, a great bed, Handerpants (the underpants for your hands!) — they all have their “appreciating” aspects that provide lifelong value. But if you spend the next few weeks observing where you’re inclined to spend money, I suspect you’ll find yourself spending money on goods or services that may not be worth the long-term price you’ll pay.

Go ahead, buy a company – or a few
Of course, you don’t have buy stocks with the money you put away for the future. But the point I’m making here is this: You can buy a product, or a piece of the company that makes it. Because that’s what a share of stock is: a real-life, honest-to-goodness ownership stake in a company. You’re not just buying a piece of paper; you’re buying a business.

So the next time you’re tempted to spend money on something you don’t absolutely need, you could consider buying the stock instead — or consider a “match” by investing as much in a company as you spend. Of course, you have to take commissions into account. We at The Motley Fool recommend that you don’t buy a stock unless you can keep the transaction cost at or below 2% of the trade. If your discount broker charges $10 a trade, then you should invest at least $500. Thus, it makes sense to deposit the cash somewhere first – perhaps a “stock jar” – until you’ve accumulated enough to ensure that most of you money goes to buying the business and not paying the broker.

Of course, basing your investment decisions on where you spend your money is not exactly the optimal strategy (though it’s better than spending rather than investing). As always, buying the right asset at the right price is important. Investors who bought shares of Coke when they were at their high of $88 in 1998 probably aren’t too happy that, 14 years later, it sits at $70. But they’re still better off than anyone who bought $88 worth of fizzy sugar water in 1998. Plus, if they reinvested their dividends along the way, they still have realized a positive total return, and have accumulated more shares that pay even bigger dividends. In 1998, Coke paid $0.60 a share in dividends; in 2011, the company paid $1.88 a share – more than three times as much – which can be used to buy even more shares, which pay more dividends, which buy more shares, and so on.

If you’re not comfortable with buying an individual company, buy a broad-market index fund, exchange-traded fund (ETF), or mutual fund. In fact, that is the best strategy for many people. You’ll be buying little pieces of hundreds of companies that provide goods and services all over the world.

So spend like mad — on assets. Maybe you can replace the “buyer’s high” you get from making a purchase with an “investor’s high” that will keep your net worth growing.

This article is about Investing  

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Chinese Company Continues Plan To Replace Workforce With 500,000 Robots

Possibly the largest electronics manufacturer in the world, Foxconn plans to add a half million robots to its assembly lines.

How to deal with the rising cost of running your factory? Get rid of all those inefficient humans and hire robots instead. Citing labor shortage and rising wages Hon Hai, the world’s largest contract electronics manufacturer, recently announced that it intends to build a robot-making factory and replace 500,000 workers with robots over the next three years.

Supervisors will never have to hear about bathroom breaks again.

Hon Hai, parent company of manufacturing giant Foxconn, which assembles the iPhone and iPad for Apple as well as products for Sony and Nokia. Hon Hai already has 10,000 robots busy at work in its factories, and they’re not wasting any time with their plan to increase the number of robots to one million by 2013. Earlier this month the company announced their plans to build a $3.3 billion “intelligent” technology park in Taichung, Taiwan. That intelligence will come from CNC (computerized numerically controlled) devices, servo drivers and motors, and robots.

Part of the driving force behind the company’s robotization is China’s booming economy. With about 800,000 employees and a yearly revenue of about $60 billion, Foxconn may be largest electronics maker. The company has made its name largely on cheap national labor. But as China’s economic growth has led to increases in worker wages and, at the same time, increased demand for the electronics that Hon Hai makes. Hon Hai’s company chairman Terry Gou, among China’s richest men, spoke at a ceremony where he signed a letter of intent to invest $3.3 billion in greater Taichung. He said the robots will increase the production value of Foxconn by about $4 billion over the next three to five years and create about 2,000 new jobs.

Rumors in the past had pointed to FRIDA as Foxconn’s robot of choice, made by the Swiss robotics company ABB. But evidently Foxconn isn’t going to wait around for the robots to come to them. And considering the sheer number of robots they plan on building and putting in their factories, it makes more sense for the company to custom-design and build themselves. The program’s initial cost is estimated to be about $223 million, but it should pay off in the long run.

After a spate of jumping suicides, Foxconn began setting up nets like these.

Foxconn is long due for some positive change. A string of suicides at several Foxconn campuses have drawn international scrutiny and criticism. The companies factories are models of efficiency, with a production line scheme designed in such a way that “no worker will rest even one second,” Li Quang, executive director of the labor rights group China Labor Watch, told the New York Times. Between March and May of 2010 nine Foxconn employees leapt to their deaths from Foxconn factory rooftops. Foxconn responded by installing catch nets around their high-risk buildings. Over the past 15 months 14 Foxconn workers have died in what looks to be suicides. Of course, installing half a million robots will most likely lead to much of Foxconn’s workforce looking for other jobs. But the company insists its intention is not to replace humans, but to move humans from jobs that are “dangerous and monotonous” and free them up to do jobs that take more thoughtful research and development. I’ll believe that when I see it.

If his workers might not be, Gou is certainly excited about his company’s coming robot revolution. “The investment marks the beginning of Hon Hai’s bid to build an empire of robots,” read a statement from the Central Taiwan Science Park authorities. At the ceremony, Gou declared that Hon Hai will build an “intelligent robotics kingdom” in the coming years.

“Empire of robots”…”robotics kingdom”…I wonder if Mr. Gou has some bigger plans for his army of robots. Sorry, probably a bad choice of words.

When the robots roll out onto the factor floor, they’ll join the warehouse floor-scooting Kiva and other robots that are revolutionizing industry automation. Pretty soon it’s going be strange to see a human on a factory floor. But at least they’ll still need humans to do the more intelligent and creative decision-making jobs. You know, the kind that Watson is studying for right now.

[image credits: Wired, Google, and MS-NBC]
image 1: Foxconn
image 2: Foxconn2
image 3: Foxconn3

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Insurance company sues owner following Bugatti Veyron crash

You may recall the video below that went viral in 2009. It showed the owner of a Bugatti Veyron unbelievably driving his car straight into a lake. It was followed by a video that showed the car being extracted from the river by a tow truck driver.

At the time, everybody assumed it was a devastating accident. The owner, Andy House, a Texan car dealer, lodged a claim with his insurance company to collect a payout of around $2.15 million following the accident. His claim detailed the incident as an accident that occurred due to him swerving to avoid a pelican. As you can see in the video below, there was no pelican and certainly no swerving.

The Houston Chronicle claims that Mr House borrowed around $1 million from a friend to purchase the car earlier that year, but only weeks before the ‘accident’, he increased his insurance cover to $2.15 million as a collector’s vehicle. The payout would potentially earn the owner a staggering $1 million – not bad when you consider the type of depreciation you would normally expect with a car like the Veyron.

Unbeknown to Mr House, an enthusiast was filming the Veyron on an adjacent road seconds before it plunged into the water. Mr House didn’t expect his master plan to go so pear-shaped when the video went viral (now with over three million views) and exposed his fraud.

His insurer, Philadelphia Indemnity Insurance Co, is now suing Mr House for the payout figure, claiming that it wasn’t an accident and the claim he lodged was fraudulent. The insurer also claims that Mr House ran the engine for up to 15 minutes following the car being submerged, making the engine unusable.

The Bugatti Veyron has a top speed of 408km/h and is powered by a 8.0-litre, quad-turbocharged 16-cylinder engine that produces 736kW of power.

According to the Daily Mail, federal court judge Judge John R Froeschner refused to settle the matter and has deferred the hearing for a later date. CarAdvice will keep you posted as this fascinating case develops.

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IBM tops Microsoft as the second-most valuable tech company in the world

Today, for the first time since 1996, IBM is worth more than Microsoft.

International Business Machines, which has been around since 1911, saw its market value reach $214 billion yesterday, while Microsoft’s fell to $213.2 billion.

Both companies still fall behind Apple, which had a market value of $362.1 billion as markets closed yesterday.

Over the course of the year, IBM has grown in market value by a total of 22 percent. Microsoft has, for the same period of time, dropped 8.8 percent.

So what’s been behind IBM’s more recent success?

In 2005, IBM sold its PC division to Lenovo for $1.25 billion. IBM believed the move would make it more profitable in the long run and would allow it to focus on software, services and supercomputers.

While the software and services parts of the business are highly lucrative for IBM, it has a rich and long history in cutting-edge machine research. Over the past year or two, IBM has made headlines with its fascinating new chips and supercomputers. In 2009, the company’s Blue Gene supercomputing program earned a presidential nod and was awarded the National Medal of Technology and Innovation.

And this year, the company’s Watson, which handily beat Jeopardy contestants in February, was put to work as a hospital diagnostician in May.

Earlier this month, we got to learn a bit more about IBM’s “brain chips” and where and how they’re made. Finally, earlier this week, IBM announced that, together with Intel, it would be creating a $4.4 billion tech hub in New York to continue its focus on next-gen computer chip technology.

Clearly, IBM’s focus on computers that “think” has been part of its success; sloughing off its personal computing business allowed it to make huge strides in this area and others.

Microsoft, on the other hand, is still doing robust business with its operating system and Office suite sales as well as its gaming business, thanks to the Xbox and Kinect. But the company is still making heavy investments and struggling to see returns in areas such as online services and mobile.

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