Summit Notebook

VMWare’s orator: Tod Nielsen

Tod Nielsen certainly has the gift of the gab. VMWare’s chief operating officer, who was once videotaped by a reporter in the hope that he would turn out someday to be “famous” (and a royalty generator), waxed lyrical at the Reuters Global Technology Summit about everything from British CIOs and magic crystals to PCs .

Here’s a sampling of his colorfully phrased — though occasionally puzzling — views.

On VMWare’s Q1 performance:

“We should walk down Wall Street and get the tickertape parade.”

On how the company has to keep up relationships with every hardware vendor out there:

“Part of my job is to be Switzerland and be great friends with everybody.”

On how VMWare triggers spending on storage, networking, servers and so on when they win contracts:

from MediaFile:

Microsoft CFO: Likes iPad, loves Ballmer: apps? meh

Three things we learned from chatting with Microsoft CFO Peter Klein: for one, he's a big fan of his boss, CEO Steve Ballmer, despite their contrasting interview styles (Klein is even tempered; Ballmer is famously energetic, which I've witnessed first hand).

Reuters: What's it like working with Steve Ballmer? Klein: It's awesome. He's incredibly passionate, he cares about nothing except the success of the company. He's incredibly smart. He knows the industry backwards and forward.

Reuters: Does he jump around and make your life hell sometimes? Klein: No, he makes my life exciting everyday. It has been fabulous. He cares so much about the company. I'm a big believer in you have to be passionate about what you are doing.

Reuters: You seem so quietly spoken versus his (electric demeanor). Klein: I think we are an awesome combination. I think the finance guy needs to be a little more measured.

Reuters: Could you someday be CEO? Klein: I haven't thought about that. I'm trying to be the best CFO I can be. Steve is fired up and ready to come in every day.

** Two: Klein thinks the iPad, which some see as a threat to portable PCs that use Microsoft's Windows, is,  you know, okay.

from MediaFile:

$60 video games? Do the math, says Zelnick

How do entertainment retailers come up with the prices they charge? Why is a movie theater ticket $10, a music CD $15, a rental DVD $3-$5 and a top video game $60?

We asked Strauss Zelnick, executive chairman of game publisher Take-Two. He says it's simple math, based upon the value of that experience.

Prices are determined by the marketplace -- if folks stopped buying stuff, prices would fall, etc. (Think gasoline). Balance that with cost. A game like Halo or Grand Theft Auto takes years to develop and costs as much to make as a Hollywood film.

Here's Zelnick in his own words:

The reason the consumer is willing to pay $60 for front-line product is because they are going to get 20-plus hours of game play out of that product.

I'm a big believer that there is an equation for the pricing of front-line entertainment products, which is: The hours of expected consumption times the value per hour, plus the catalog value.

The price per hour is pretty stable across media. For example, a motion picture: You have two hours of experience in the theater, a very high-quality experience, zero catalog value. So what's that worth? I guess about $5 an hour (on a per capita basis). If you apply that to a video rental, also zero catalog value, there's multiple people watching typically, it's a lower quality experience, that's how you get a video rental of three bucks. Recorded music, you will listen to the album (up to 10 times -- or hours -- on average). The same equation applies.

There's more:

from DealZone:

Shane Kim’s crystal ball: videogame deals, new content

Microsoft's videogame chief Shane Kim came by our New York office this morning for the Reuters Media Summit and shared his thoughts on XBox 360 sales ("cautiously optimistic") and the outlook for the gaming industry amid the economic doom-and-gloom ("Who knows, maybe flat performance will be considered a remarkable achievement").

He also gazed into his crystal ball and served up some insights on the trends shaping the gaming business.

Consolidation is going to continue, he thinks, especially among the smaller videogame publishers as they search for hit games while keeping costs in check.

"There are a number of mid-tier publishers behind the Electronic Arts and Ubisofts and Activisions of the world who are struggling."

Another exciting trend for Kim is the return to videogame content developed by small creative teams, which he thinks could reduce the industry's dependence on sequels of hit games.

"That would be a good thing... because one of the challenges the industry has had, in my opinion, over the last five to 10 years is a growing reliance on sequels and licensed properties as opposed to those new creative hits. If we can find those nuggets that start smaller and can grow into big hits, that's a great thing."

He did wonder how smaller creative shops could find funding for their pitches, given that dollars could be hard to come by these days. But at the same time, it's an opportunity for bigger publishers, he said, since nothing rocks the gaming world like a hit game.

from MediaFile:

Video game console obituaries premature – Microsoft

Gaming insiders who have given consoles the death sentence, get a life!

Shane Kim, VP of Strategy and Business Development at Microsoft Corp's Interactive Entertainment Business, said it's too soon to write off the Xbox.

"This console generation will have a long life cycle. I think it's way premature to say there will never be another Xbox," said Kim at the Reuters Media Summit.

Industry veterans like WildTangent Chairman Alex St. John and Sandy Duncan, who set up and ran the European Xbox business for Microsoft, believe that consoles as we know them are doomed. Duncan said they will "die out " in the next five to 10 years, according to an interview published in www.Thatvideogameblog.com.

Such forecasts are based on views that gaming consoles will be rendered obsolete by the increasing convergence of devices such as set top boxes and the fact that gamers will increasingly turn to the Web for new cool applications.

Kim admitted there was a lot of room for expansion via the Web.

"What's interesting to think about will be what will define the next generation. It is absolutely a possibility where the next generation is defined by what we can do online rather than the hardware," he said. "We can reinvent the experience with the magic of software," he said.

Q&A with WPP’s Sir Martin Sorrell

Sir Martin Sorrell, CEO of WPP Group Plc, was interviewed as part of the Reuters Global Technology, Media and Telecoms Summit held this week around the globe. He talked to Reuters reporter Kate Holton in London, with groups of reporters calling in from Paris and New York to ask questions. Here are extended excerpts from a longer interview:  

SOFTER 2009; REBOUND IN 2010 Reuters: How is the U.S. advertising market holding up in light of the credit crunch and housing crisis?

Sir Martin: I would just say that I think we continue to be surprised by the relative strength of the US in the first four months of the year, I guess.

Reuters: Previously said you see a stronger 2010 but concerns in 2009. Are you still happy with that characterization?

Sir Martin: Following the Beijing Olympics and the elections of the new US President, 2009 may see a little bit of slowdown in China but all of these things are relative because China is still growing at 20 percent plus and it can’t carry on forever. The GNP can’t continue to grow 10 percent per annum consistently so — forever. The laws of compound arithmetic just make it very difficult. So ’09 I think you have a little bit of relaxation and also I don’t think the world has decoupled. So if America’s weak, as we have said before, you may not catch a flu, but you may certainly catch a cold.

And then in 2010 a number of events –you have the (U.S.) mid-term congressionals. So any US President has to do something unpleasant in ’09 will do it early and hope that mid-term congressionals would not be affected. But you’ve got the Shanghai fair, the expo in 2010. You’ve got the Asian games. You’ve got the Winter Olympics in Vancouver and you’ve got – the biggest event is probably the World Cup in South Africa

Reuters: If we did experience a greater economic downturn would you expect to see increased competition amongst agencies for business? How does that impact on you?