Notice to owners of the Wii version of Activision’s Guitar Hero 3 video game: Activision CEO Bobby Kotick regrets saving you $10.

Wii games typically cost $10 less than PlayStation 3 and Xbox 360 titles, which have to include high-definition graphics and robust online components. In keeping with that practice, Activision priced the Wii version of its best-selling musical game at $90, compared to $100 for the PS3 and Xbox 360 version.

But robust sales over the holiday period showed Wii owners would have gladly paid a higher price, Kotick told Reuters in an interview following the company’s third-quarter earnings report.

“I think we made a strategic mistake in pricing it where we priced it. There’s not an enormous amount of price sensitivity in that product,” Kotick said. “There’s no question we left money on the table.”

Data from market research firm NPD showed Guitar Hero 3 for the Wii had sold over a million copies by the end of December, meaning Activision could have grown its topline by another $10 million.

Asked about the future of the Guitar franchise, Kotick declined to get specific but said: “Obviously, there’s a good roadmap for new product innovation, Guitar Hero software, hardware, new songs, new packaged content, and new bands. It doesn’t take a lot of imagination to think of the things that can be done.”

(Photo: Reuters)

Nintendo of America President Reggie Fils-Aime has his hands full. Not only is the Japanese company struggling to make enough Wii video game consoles to satisfy holiday demand, it may soon face similar issues with its DS handheld, while trying to plan for a trio of huge software launches early next year.

Fils-Aime spoke with me at Nintendo’s U.S. headquarters in Redmond, Washington to discuss how the Wii shortages are affecting the company’s business, why he’s none too happy with retailers that pad out their Wii offerings with extra games and accessories, and why you can have a Wii in any color as long as it’s white.

You had a conference call last Friday in which you discussed the ongoing shortages. Has anything changed in the three days since? What can you update us on?

Nothing has changed from Friday. If anything, for us, the season continues to simply get stronger and stronger and stronger. This morning I had reports from many of our top retailers reporting sold-out status with Wii, even with large quantities available for sale on Sunday. DS continues to perform exceptionally well, with some retailers voicing concerns about DS inventory going into the holiday. So for us, the momentum continues unabated.

Some retailers are selling Wii in bundles, in some cases for $500 or more. So you’re still seeing them fly off shelves even at those prices?

The vast majorities of Wiis are being sold at a $250 price and the consumer choosing what else they buy. On a handful of retailer Web sites, there are these pre-set bundles. Retailers have already been given feedback that we are not big fans of that. We think it masks some of the price advantage we have versus the competition and, frankly, the consumer should decide what they want. Predominantly you only see that activity online. We have been assured by retailers that if the consumer pushes back, that they will offer standalone Wiis to those customers.

Is there any pressure you are bringing to bear on those retailers who are bundling? Are you telling them that if they do that, then maybe they won’t get as big an allotment of Wii and their competitor will?

Given our status as the number one home console, the number one portable, that gives us a lot of weight. We don’t have to remind retailers of the strength we have right now. We are simply making an observation and that reinforces the point quite nicely with retailers.

What determines when you guys roll out new colors, and when can people expect new colors for Wii and DS?

In terms of specific choices themselves, we want color choices to appeal to additional consumers as opposed to being so close that they cannibalize each other. That’s why you see now the white, pink, black , and crimson, all appealing to different consumers. We look at new colors as additional complexity to the business, so we want to be very careful how we add colors. When we can supply the current color we will consider others.

There’s grumbling that third-party publishers are not doing that well on the Wii, partly because your own offerings are so strong. Is that a bit of a bum rap?

It really is. In November, the Wii had 6 million pieces of software sold, 60 percent of that was from third-parties. I can guarantee you that if you talk to any third-party publisher putting product out on either Wii or DS, they are extremely satisfied. They do have to target the proper demographic and have some mechanism for driving awareness.

“Super Mario Galaxy” is an incredible game. Everything from the level design to the colors to the music is close to perfect. I play it every night with my son.

The critics obviously raved about it. Yet look at the sales numbers and I was surprised that it only did 1.1 million copies in November. How did that compare to your expectations when other blockbuster games like “Halo 3″ did 3 million copies in the first month, or “Call of Duty 4″ did 1.5 million just on the Xbox? “Mario Galaxy” has absolutely lived up to our expectations. It did 1.1 million in November, and has continued strong sales in the month of December. You cannot compare a game like “Galaxy” to the ones you mentioned because “Galaxy” will have an extremely long life and will have extremely large sales numbers throughout that entire life. Other titles may have a large first day or first week sell-through, then they will die off as consumers move on to something else.

“Galaxy” is also what we call a bridge title. It’s going to be enjoyed by all those audience expansion consumers as they see how easy it is to get into this platform and how enjoyable it is. Mark my words, look in 6 months and no one will have any remembrance that it ‘only’ did 1 million in its first month.

Back to the Wii, when do you expect that the supply issue will be resolved?

I don’t know. We at Nintendo America are focused on getting to the point when any consumer can walk into any of our retailers and find a Wii. Then we can plan, on an ongoing basis, the rest of the business. The level of demand we are facing complicates all of our future business planning, in terms of estimating how much software to have prepared for any individual launch title, to estimating annual software needs, to estimating quantities of the balance board for Wii Fit. All of that becomes much tougher exercises until we have supply and demand curves that intersect.

How are you poised to respond when Sony or Microsoft cut prices this year?

We’ve said all along that Sony and Microsoft are approaching this business very differently. They are competing amongst themselves based on hardware specs and price cuts. We are approaching the business very differently. We chose to provide an innovative, high-value offering right at the start. Being the fastest console to reach a 6 million sell-through in the United States is testament to our strategy. In terms of how our competitors battle amongst themselves, that’s for them to decide. What we want do is deliver great software and innovative concepts.

As proof that our competitors are on a different path, the Xbox Arcade bundle that Microsoft purported to be a product designed to go after the Wii, last month only 11 percent of its total sales were in that configuration.

But what do you do if Microsoft cuts the price of the Xbox to $250, or even $200?

If we get to a point where we are satisfying all demand and finally have inventory flexibility, it creates all kinds of options for us … without ever having to resort to a change in price. Once we have inventory on the shelves, we can have conversation about an alternative pricing strategy.

(Photo: Reuters)

Major League Baseball Commissioner Bud Selig has a lot on his mind these days between persistent concerns over steroid use by players, falling television ratings, and a burgeoning online business. That’s a lot to keep track of, so you’d think that Selig would be a pretty wired guy, but it turns out that the boss of baseball is a major league luddite.

“I am a complete computer illiterate, I’m not ashamed of it,” Selig, 73, told the Reuters Media Summit in New York.

 ”I have a cell phone and all I know how to do is say hello and goodbye. That is the extent of my involvement.  I don’t have a computer, I’m the only one left in baseball, maybe in life without.”

“Tom Werner of the Boston Red Sox, wonderfully bought me a Blackberry a year ago, flew in from L.A., spent a day with me, tried to teach me about it, it’s still in the drawer off to my right at home where I left it.”

Selig may be able to recall details of games 25 years ago, but he said his granddaughters were appalled to learn of his technology cluelessness over the Thanksgiving holiday.

“My granddaughters have voted me computer illiterate of the year, and it is much deserved.”

For the true “Halo” fan, maybe just owning “Halo 3” isn’t enough. Maybe the Limited Edition version isn’t enough. Maybe the Legendary Edition with the replica helmet isn’t enough. And maybe the special edition Xbox 360 with Master Chief color scheme isn’t enough.

If this sounds like you, maybe you need to check out this “Ultimate Halo 3 Package” Microsoft is auctioning off on eBay. The bundle includes a “Halo” edition console signed by Bill Gates, a “Halo”-themed Zune media player signed by J Allard (a Microsoft rising star who helped launch the Xbox 360 and Zune), all three games in the series, and other “Halo”-themed accessories.

As of early afternoon Pacific time, the package had attracted more than 50 bids, with the current top bid coming in at $7,400. That’s almost enough to buy your own suit of MJOLNIR battle armor.

All proceeds will go to Boys & Girls Clubs of King County.

(Photo from Microsoft’s Xbox.com site)

The reviews for Halo 3 are in and most critics agree that the game is one of the best on the market, in the same league as other recent hits like “BioShock” and “Gears of War.”

Here is a sample of reviews by gaming Web sites and publications:

–GameSpy.com: 5 stars out of 5

In a lot of ways, this review is merely a formality, because there’s no doubt in our minds that everyone with a 360 and a hunger for vicious multiplayer should own Halo 3 immediately. In fact, there are probably millions of people who do not yet own 360s that should go out and buy them just so they can witness the majesty that is a furious Halo 3 multiplayer match (provided they enjoy serious competition).

Quite simply, Halo 3 is the reason the Xbox 360 exists.

–GameSpot.com: 9.5 out of 10

All you really need to know if you’re on the fence about Halo 3’s campaign is that it’s a delicate balancing act that manages to provide satisfying closure for the trilogy, make perfect sense of all the cryptic events in Halo 2, and leave you filled with anticipation for more adventures set in the Halo universe. Not bad for a game that will take most players between 10 and 15 hours to finish on one of four difficulty settings.

–1Up.com: 10 out of 10

It’s hard to imagine a feature of this game that someone won’t love … Or you can just look at it as a sum of so many quality parts, that value-wise, Halo 3 is as sure a thing as it gets. Sure, no one aspect of the game is life-changing on its own, but perhaps the package as a whole is.

–Joystiq.com

Where Halo 3 is likely to be criticized is in its distinct Haloness. This is not the Xbox 360’s graphical showcase, falling short of benchmarks set by Gears of War last year, and more recently BioShock. Bungie has never (overtly) shot for this goal, but as the top billing in this year’s remarkably rich end-of-year games lineup, mainstream consumerism is always going to judge prettiness first, performance second.

–Kotaku.com

I’ve always held that one of the things that attracts fans of Halo to the game is its plot and characters. While Halo 3 does deliver on its promise to wrap things up, I found the plot a bit too convoluted to either follow or really care about.

(Photo from Xbox.com, Microsoft’s official Xbox site)

Last October, millions of video gamers cried out in anguish as Microsoft said a movie project based on its best-selling “Halo” franchise was being postponed indefinitely. The pain was all the more acute since the company had enlisted ”Lord of the Rings” director Peter Jackson to shepherd the film through production. 

Nearly a year later, the project is still in limbo, but Microsoft hopes next week’s release of “Halo 3″ will jumpstart interest in transferring Master Chief’s adventures to the silver screen.

“I think the the ‘Halo 3′ hoopla … is creating a lot more interest in Hollywood and people are not just dismissing it as another losing video game adaptation,” said Brian Jarrard, franchising lead at Bungie, the Microsoft studio that created “Halo”. “I am pretty confident that we will have more people coming around talking about the movie.”

“Once there started to be some turmoil, I’m thankful it (the “Halo” movie) did get cut. We’d rather have the right movie made with the right partner at the right time rather than crank something out. It’s a matter of when, not if,” Jarrard said.

When Microsoft introduced the Xbox 360 in November of 2005, it killed off the original Xbox, a decision that contrasted with Sony’s strategy to keep supporting the PlayStation 2 even as it threw most of its marketing muscle behind the new PlayStation 3.

That meant the Xbox fell quickly off the sales charts and video game makers stopped producing titles for the machine in order to focus on the Xbox 360.

So it was a bit of a surprise to see the latest NPD data for video game sales for the month of August. It turns out that Electronic Arts figured there were still enough people playing the original Xbox to justify making a version of “Madden NFL 08″ for it.

It looks like it was a smart move. According to NPD numbers provided by Microsoft, the Xbox version of “Madden” sold 122,000 copies, making it the 11th best-selling game for the month. That beat “Madden” for Nintendo’s Wii, which sold almost 116,000 copies.

Oh, and it looks like there are still a few big black-and-green boxes trickling out of warehouses: Microsoft sold no fewer than 80 Xboxes in August.

(Photo of original Xbox from Microsoft’s Xbox.com site)

It’s another round of executive musical chairs for Microsoft and Electronic Arts.
    
John Schappert, an executive vice president at EA, is leaving the world’s biggest video game publisher to take a position with Microsoft as vice president of its Live online gaming service and casual games efforts.
    
His boss will be Don Mattrick, a former top EA executive who is taking over the Xbox business. Microsoft announced in July that Mattrick will replace Peter Moore, who is heading to EA to run its sports label.

In a rare announcement not involving Microsoft, EA said on Wednesday that Barry Cottle will head up its EA Mobile division that makes cell phone games. Cottle will report to Kathy Vrabeck, a former Activision executive whom EA hired in June to head its casual games label.

ABC Family Channel, owned by the Walt Disney Co, is playing against type in a press kit to promote its edgy new animated series, “Slacker Cats.”

Disney, which is famous for its immaculate presentations of its G-rated products, sent out a booklet describing the new show with an apparent coffee stain on the cover and containing the un-Disney-like phrase “half-assed” to describe the antics of the two feline main characters.

The pilot, created by “The Book of Bunny Suicides” cartoonist Andy Riley and “Little Britain” writer Kevin Cecil, makes reference to faking purrs, mind-altering drugs, “kitty” porn and credit card theft, in the first 15 minutes.

ABC Family has scheduled the launch of its “outrageous and decidedly grown up” foray into animation waaaayyy past kids’ bedtimes — at 10 p.m. Aug. 13.

(By Gina Keating in Los Angeles)

Who is this amiable and harmless-looking fellow to the left, you ask? Why, none other than the man who has terrorized and entertained Silicon Valley for the last year with The Secret Diary of Steve Jobs. The quest to unearth the true identity of Fake Steve Jobs is over, and he turned out to be this guy, Dan Lyons, a senior editor at Forbes. That’s surely a disappointment to people who had been hoping that FSJ would turn out to be an Apple executive of some sort, or even El Jobso himself.

Lyons’s respect for truth compelled him to interrupt his vacation and take his life into his hands as he talked on his cellphone while driving through a torrential rainstorm in Maine.

Q. You obviously were unmasked earlier than you would have liked. Did you have a plan to reveal yourself down the road?
A. Well, I didn’t. The last bit of advice from Forbes was that coolest thing to do was to stay anonymous and then just shut down and never tell anyone, just leave it at “The Legend of Fake Steve.”
     
Q. The blog is shifting over to Forbes. Do you anticipate that you’ll be able to keep your readership or has something been lost along with your anonymity?
A. I don’t know. I think there’s only one way to find out. If I had to guess, I’m not going to put it on Forbes, we’ll keep it separate but connected. The feedback is, don’t tinker with it, keep it the way it is. Forbes has been great, they think it’s fun and want it connected to their Web site.
    
Q. Why do you think you managed to stay anonymous for so long? And how many people were in on the secret?
A. I don’t even know now, a lot, though. Some of my friends knew from the beginning. They said they kept it quiet but I’m pretty sure some of them told other people.
In my book propoosal, we made some mistakes in there. It was anonymous, but there were enough clues in there that it was really easy for people to figure it out.
I couldn’t believe (Silicon Valley gossip blog) Valleywag kept missing. Then people started writing, saying they were feeding Valleywag misleading information. I think most people didn’t want to know and that had enough momentum so I was able to stay anonymous.
    
Q. Talk about about how you started the whole thing. I understand you didn’t necessarily know a lot about Jobs at the start.
A. It was really almost an experiment with technology rather than with material. I’m in my 40s, an old media guy, print journalist, dead-tree kind of guy, in this crisis with the rest of us, and I was thinking “Gee where is this going?”
I started a bunch of blogs on different services, WordPress and Blogger. With the Jobs thing, I thought it would be kinda funny if a CEO kept a blog but really told you what he thought.
I ran a few items on that to fill space and sent it to a couple friends of mine, as a private joke. But people started finding it, I don’t know how, and it really spread virally. The name Fake Steve was from one of the readers. I didn’t think of that myself, I was calling it “The Diary of Steve Jobs”.
It’s very addictive, blogging is very addictive, finding an audience like that, a readership like that. The voice just kept coming to me. I’d wake up and something would happen and I’d know here’s what Fake Steve would think about that. It was not a lot of work. 
After about six weeks I shut it down, but someone else put the site back up with an RIP notice, so I relaunched it with (Web-site-traffic counting tool) Sitemeter and found there were readers from Russia, Europe.
I was starting to develop little story lines like a comic strip would have and I thought, this is kind of cool, like writing your own TV show. There were recurring characters like Larry Ellison.
About six months in, in January, I thought about shutting it down again but Wired wrote to me asking if they could sponsor me. Forbes also wrote to me asking for a sponsorship. It was then I though maybe I can make a little cash out of this.
    
Q. How do you reconcile the demands of Fake Steve with the demands of Dan Lyons? Fake Steve says some pretty mean things about executives and other journalists. Does that complicate things in real life?
A. I don’t know. Fake Steve is way more popular than I am. It’s like that Jim Carrey movie “The Mask”, when he puts the mask on he’s charming and funny and everyone likes him and when he takes it off he’s just a schmuck.
I call Bill Gates “Beastmaster” and I’ve had Microsoft people writing in for months saying they love it. I call (Wall Street Journal columnist) Walt Mossberg “Goatberg“, but Mossberg is making a million bucks a year at the Journal, he can deal with someone making fun of him.
There have been things that do cross the line. I look at those now and say “Oh”. But with the blogosphere you can’t take it back, it’s out there. I heard from Larry Lessig. I like to make fun of him as being the big anti-property guy. I was taking the piss a lot and said he took money from Google. He wrote and said he laughed at the stuff about him but he was concerned with that because it didn’t happen. So I wrote a post saying I was wrong and made it a big post. Lessig wrote me back saying he now knew I wasn’t the real Steve Jobs because he would never have done that.
I try to walk that line and I haven’t got it right every time. People like a little meanness, but too mean and even the readers go, Oh, I’m not laughing now. You want to be, well, puckish isn’t the right word, but teasing.
    
Q. Talk a bit about the upcoming book. what’s it about?
A. It’s the story behind the story, if you can imagine what it’s like to be in the Apple boardroom when they first find out about the options inquiry from the SEC.
The arc of the narrative would be built around that, but on the way there are lots of digressions and asides about hanging out with Bono and Larry Ellison. I won’t give away the ending but there’s a very dramatic move to save himself. In terms of real time, the story sort of ends in January ‘07, with the last dot, the last word being written on June 29, the day the iPhone launched.
    
Q. What’s next for Fake Steve? Any speaking engagements or more polished magazine pieces or anything?
I had some interest over the month from people wanting to do a back of magazine column for Fake Steve, and I’ve had some offers to do some speaking, things like being a keynote speaker at an employee meeting. There’s a conference in September I might do, but I don’t know how to do it, would it be like doing standup?