Consumer retail sales of Microsoft's newest computer operating system topped those of Vista by 234% on a unit basis within the first few days of launching on Oct. 22, according to a report released this morning by the NPD Group. (The report did not include sales to businesses and large organizations.)

That Windows 7 would do better than Vista is not too surprising. Critical buzz for Windows 7 was relatively positive and largely void of the savage language that reviewers heaped on Vista when it launched in January 2007.

This time around, Microsoft also attempted to woo reluctant buyers with discounts and specials, such as a 50% discount on a copy of the software when buyers spring for a new PC, or a free upgrade from Vista for those who bought a PC after June 26.

"We definitely saw the results of aggressive pricing," said Stephen Baker, NPD's computer software analyst. 

Though helpful for pushing volume, the discounts may have crimped Microsoft's overall revenue from the product. (The NPD report is mum on the sales impact on Microsoft's topline.)

The fly in everyone's ointment, of course, has been the economy. With consumers making do with their old computers or opting for ultra-cheap netbooks, average PC prices have dropped around 20% since last year, Baker said.

While unit sales of Windows 7 software were up in the first days of launch over Vista, sales of computers with Windows 7 were actually down 4% compared with sales of Vista-based computers when Vista launched. The comparison is not a fair one, Baker cautioned, because Vista launched in a January, when PC sales tend to do better, and Windows 7 launched in October, one of the slowest months for PC sales.

Still, the gruesome economy may have helped Windows 7 sales in one respect, according to Richard Shim, a PC analyst with IDC.

"Usually upgrades are not very popular. People have tended to buy new PCs when new operating systems come out," Shim said. "Windows 7 seems to be an exception. One reason is that it can work well with older computers because it's designed to be streamlined."

In other words, instead of spending $500 for a new computer, some consumers are springing for the $120 to $220 Windows 7 upgrade and souping up their old machines.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Video game sales this holiday aren't likely to top last year's, said Robert Kotick, chief executive of Activision Blizzard Inc., the world's largest video game software company.

"If the consumer materializes and spends money, we'll do well," Kotick said in an interview today. "If not, things will be a challenge. And today, you really have no way of knowing what will happen. Shopping season hasn't kicked off. Consumers saw significant discounts last year after Black Friday, and they're waiting for it to happen again this year."

Kotick's sober remarks came just before the company released its third-quarter earnings report. Although sales were down 1% to $703 million, Activision swung into a $15-million profit, up from a $108-million loss in the same quarter last year. It earned a penny a share in the quarter ended Sept. 30, compared with an 8-cent loss a year earlier. The numbers beat Wall Street expectations on a non-GAAP basis.

Activision -- anchored by a trio of blockbuster franchises including Guitar Hero, Call of Duty and World of Warcraft -- has been better prepared to weather the economic storm that has eroded software sales and dampened consumer's appetite for game consoles and other consumer electronics.

This quarter, the Santa Monica-based game publisher released DJ Hero last week, followed by Band Hero on Tuesday. Upcoming titles include Call of Duty Modern Warfare 2, due out next week, and Tony Hawk Ride on Nov. 17.

More after the company's earnings conference call with senior executives.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Shaun White used to battle with his older brother Jesse for control over the family's PlayStation game console while the two grew up near San Diego. Now, at 23, the Olympic snowboarder gets to star in his own video game, Shaun White Snowboarding: World Stage, set to hit shelves on Sunday.

Developed by Ubisoft Entertainment, the game is a sequel to White's first title, which sold more than 3 million copies since its release last November.

White may not be a household name, but neither was Tony Hawk when he came out with his first video game 10 years ago, Tony Hawk Pro Skater. Now some fans know Hawk more through his virtual stunts than his actual work on the ramps. Could the same be true for White someday?

White spoke to us about how he got his start in snowboarding, what he wants people to get out of playing his video game and who he aspires to become. Here's a video of part of our interview with White, taken by Times videographer, Myung Chun:

And, for old school reader types, here's an edited transcript of the conversation:

How did a kid from Carlsbad, Calif., grow up to be a snowboarder?

I ended up going to Big Bear skiing with my family. When my brother started snowboarding, I did too. I was 6 then, and I started to compete when I was 7. I actually grew up in Del Mar and Carmel Valley. The schools were really good, but they didn’t recognize my sport. At the time I had money saved up [from winning snowboarding competitions and sponsorships], so I bought a house in Carlsbad as an investment when I was 13, and that let me go to school in Carlsbad. The schools there really supported me when I competed.

Didn’t you want to surf instead?

My dad got me a huge board when I was little. He loves to surf. He suited me up and sent me out on this huge wave. I went under, and when I came out and the board hit me in the face. So I said, I never wanted to do this again. I stayed away until I was 13.

One of your sponsors, Red Bull, last February built you a private half-pipe in Silverton, Colo., called Project X. Is that going to appear in the game?

It actually is. There’s a special...

... Red Bull level where that half-pipe turns up. It’s a fun way to bring in something I’ve actually done in real life into the game. It’s cool to actually have people see footage of that, and now players can ride it. What’s special about it was that it was so high up on the mountain.

How involved were you in developing the game with Ubisoft?

Ubisoft sent me updates of the game for my comments. It’s hard because I can’t actually tell the programmers how to program. But I was able to help out when they were designing the game in the beginning. We talked about whether we wanted it to be an adventure game, whether you get to be yourself or someone else. The other thing I do is I read through the scripts. There’s a lot of stereotype snowboard lingo that we don’t actually say.

What do you want players to get out of the game?

The goal of the game is to get someone who never goes snowboarding to get the feel for what it’s actually like to ride. If you play the game, you get the same point of view I get when I ride. When you add the balance board, it definitely enhances that. Feeling because you’re able to lean and turn. I also think it’s rad to be able to go in the game and do things I can’t do in real life.

How does the new game, Shaun White Snowboarding: World Stage, top the previous one?

The first game was based on a road trip with your friends. This one is bigger. You get to go all over the world.

Do you play any video games in your free time?

I play Mario Kart. When I was 12 years old, I was hanging out with 23-year-olds. I was into cartoons and Pokemon, and they’re all talking about girls. It was a strange way to grow up. Games have always a big part of my life. I was that kid freaking out over his new Nintendo. Now I have the Wii, Xbox 360, PlayStation 3. You have to imagine being stuck in a mountain -- you’re snowed in and you can’t even leave the hotel. So I spent a lot of time playing games.

You’re also an accomplished professional skateboarder. Are the skills in those two sports similar?

They’re similar in a way. It’s similar in the way you can do airs and the way you balance. But it’s also so different. I personally think skateboarding is harder because it has so many moving parts. With snowboarding, your feet are strapped to your board. A lot of the guys who snowboard also skateboard for fun. That’s just part of the culture. But I’m really competitive in everything I do. In the summer, I’d skate as hard as I boarded. So I decided to go pro when I was 16.

What do you think of Tony Hawk’s new game, Ride?

I haven’t played it, but I’m excited to see what it’s like. He’s sort of my neighbor because he lives one freeway exit away. He’s got his own skate park at his house. I sometimes go there and mess around.

Who’s your hero?

I’m not sure. But I know who I want to be.

Who?

My dog. He just lies around and gets petted all day. He’s been in two Target commercials. His name is Rambo. He’s a French bulldog. We have a T-shirts at Target with Rambo on it, and it’s the third-best-selling shirt. I see kids wear my dog on their shirts now. It’s amazing.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

As shoppers around the world cut back on buying televisions, cameras and computers, Sony's revenue plunged 19.8% to $18.5 billion from the same quarter a year ago. Bargain pricing also eroded profit margins, leading Sony to swing from a $200-million profit last year to a $292-million loss.

Sales slipped in all of Sony's divisions except for its financial services business in Japan. Sony's consumer products and devices division, which includes its Bravia TV and Cybershot camera businesses, plunged 36.5% to $8.9 billion as consumers bought fewer electronics and at lower prices. Still, the unit eked out a $99-million operating profit.

Its networked products division, which includes Sony's PlayStation video game and Vaio computer businesses, also saw a steep 24% drop in sales to $3.9 billion. Losses for the unit widened substantially to $654 million, accounting for the bulk of Sony's operating loss in the quarter.

Sales of its PlayStation 3 game console jumped 33% to 3.2 million units, thanks to a $100 price cut that brought the price down to as low as $299. But that was not enough to make up for a 24% slide in sales of the PlayStation 2 and a 6% decline in sales of its handheld PSP console.

Consumers appeared to also have cut back on other types of entertainment. Sales for Sony's music labels, the second largest in the world after Universal Music Group, fell 3%. But the decline was cushioned by a surge in the popularity of Sony's catalog recordings of Michael Jackson, leading the unit to post a $96-million operating profit on $1.4 billion in revenue.

Sony's movie business also took a hit. Sales declined 30% to $1.5 billion as consumers bought fewer DVDs and curtailed trips to the movie theater. Sony Pictures posted a $71-million loss for the quarter.

On a brighter note, the company said it now anticipated lower losses than it had initially projected for its current fiscal year ending March 2010. Sony credits the improved outlook to the ability for its consumer products business to turn a profit, thanks in part to aggressive cost-cutting, and the health of its Japanese financial services business. File under: It's not as bad as we thought.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

The search engine banded together with several music service sites that are responsible for streaming the songs on Google's search results pages. Searching for Coldplay, for example, will yield the band's album cover art, alongside four popular songs that users can play once for free. Once a song has been played by a user, they will only be able to hear a 30-second sample of tune. (The feature is being gradually rolled out over the next 24 hours, so some folks may not see the feature until tomorrow.)

Google itself isn't paying record companies for the rights to play millions of songs on its search page; its partners are. Those include Lala, Pandora, imeem, MySpace Music and Rhapsody, a subscription service from Real Networks. All have licensing agreements with record labels to stream or sample millions of songs online.

The Mountain View, Calif., search company said it's not interested in competing with digital music retailers such as Amazon and Apple's iTunes.

"We're not in the music business per se," said R.J. Pittman, Google's director of product for the music search project. "We don't license the music nor sell the music directly on Google. We are merely a music search feature."

But in steering millions of Internet users to these sites, Google is indirectly boosting their ability to compete with iTunes, which was responsible for 69% of U.S. digital music sales in the first six months of this year, and 35% of all music sales, including physical albums, according to market research firm NPD Group Inc. Amazon, the second-largest player, accounted for 9% of digital music sales and 10% of overall music sales.

Google says it's only interested in helping people find and discover music. Whether it can help revitalize the music industry is another question that Times editorial writer Jon Healey addresses here.

Millions of people already use Google to ...

... look for music on the Internet and learn more about bands. The search engine last week accounted for 30% of referral traffic to music-related sites, according to Experian Hitwise, an Internet traffic tracking firm. At any point, two of the top 10 terms searched using Google are music-related, Pittman said.

Some of that traffic has been going to sites that offer free, pirated songs, something that record companies have struggled to deter. Google's efforts to steer traffic to legitimate music sites, where labels at least have a chance of making money, are welcomed by music executives.

"We're trying to get consumers to interact with some of these more legitimate services," said Thomas Hesse, president of Sony Music Entertainment's Global Digital Business. "Having Google step up and support this is a positive development."

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

The announcement comes a year after Microsoft gave its Xbox Live Gold members access to the Netflix service in November 2008. That move helped turbo-charge the number of subscribers to Microsoft's online service from 14 million last year to more than 20 million today.

Jack Tretton, head of Sony's PlayStation business in the U.S., said what sets Sony's version of Netflix apart is that subscribers won't have to pay Sony any membership fees to take advantage of the service. In contrast, Xbox 360 owners who want to stream Netflix must pay a $50 annual fee for the Gold membership.

(Sony and Microsoft require users to subscribe to Netflix's movie-rental service, which costs between $5 to $29 a month.)

"We see the PlayStation 3 as the ultimate entertainment device," Tretton said in an interview.

Funny, Microsoft said the same thing about its Xbox 360 game entertainment console earlier this year.

The two companies serve up similar fare. Sony's online service, called PlayStation Network, currently has 2,300 movies and 13,800 TV shows. In November, it will add 17,000 Netflix titles to the tally. Microsoft's Xbox Live features more than 20,000 movies and TV shows, including Netflix titles. As for music, neither offers a way to buy tunes. (Xbox Live comes close, letting its Gold subscribers stream Last.fm, an Internet radio channel.)

What about Sony, which owns its own music label?

"My personal opinion is if you're going to do something, do it right," Tretton said, when asked if Sony would introduce a music service to the PS3. "Doing things right is more important than doing them first. But this would be something that would definitely be well received."

-- Alex Pham

*This post has been updated to add the number of Netflix titles Sony said it will add to its PlayStation Network in November.

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

So you want to be a video star?

If you performed at a real-life comedy club in Los Angeles in the last three months, you could have been spotted by Mike Polk, a producer for Break.com who was scouting for fresh talent. Instead of clicking through countless YouTube videos to find someone, Polk decided to venture into (gulp!) the real world and hit a few live stand-up shows.

Based in Beverly Hills, Break.com gets about 70 million unique visitors a month, mostly guys 18 to 34 years old, making it one of the leading humor sites out there. Partly owned by Lionsgate Entertainment, the site serves up video game trailers, photos and short Web videos about cream cheese as deodorant pranks and Hummers on a rampage. You know, guy stuff.

Polk, whose background is in creating viral videos including a video promoting tourism in Cleveland that got 1.6 million hits, has been combing L.A.'s comedy clubs for Break.com's next comedic star.

What was he looking for? And how are those traits different for online video personalities? In a recent interview, Polk gave us, in his own words, five criteria for online video stardom: 

1) Immediacy: There has to be something that grabs you right off the bat. The Internet is flooded with people who can get your attention quickly. We're looking for people who can be funny in a very short period of time.

2) Eye-catching thumbnail portrait: It's not about being attractive. It's about having presence and charisma. But online, you have to convey that on a picture about the size of a postage stamp. Thumbnails are incredibly important.

3) Versatility: There's a one-man-band nature of Internet videos. You have to be able to incorporate music, work your own camera and know how to edit video. There are so many comics who don't know how to do any of this.

4) Original persona: You need a concept of what you want to do and how you want to get that across. It has to be unique and original.

5) Likability: We want someone people would want to approach, someone who's not already a star or full of himself. He has to be able to laugh at himself.

There's one other criterion that Polk did not explicitly mention. But it's all here in Break.com's recruiting video. (Hint: You might want to bring an athletic cup to your audition.)

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Is Wall Street out of its mind?

To understand why, it's helpful to look at the unofficial currency of financial markets -- expectations. Analysts had forecast that the Redmond, Wash., technology giant would report per-share earnings of 32 cents. Microsoft instead earned 40 cents a share, better than investors had anticipated.

Expectations were also behind yesterday's stock move. After Microsoft launched its most important product in three years, investors added just a penny to the company's shares. That's because the release of Windows 7 proceeded exactly as planned. Every aspect about Windows 7 had already been public knowledge, including its price, features and even consumer reviews.

So what did investors like so much about today's earnings? Let's take a closer look.

Net income for the quarter ended Sept. 30 was $3.6 billion, or 40 cents a share, down 18% from $4.4 billion, or 48 cents, a year earlier. Sales slipped 14% to $12.9 billion.

Many had expected the decline given the recession, which has all but paralyzed businesses that may be considering buying new computers. Instead, many organizations either made do with their old machines or opted for cheap netbook computers. Costing little more than $200 apiece, netbooks are so cheap they offer little or no profit for their manufacturers or for Microsoft, which sells the operating system software for these devices.

"Microsoft, like the rest of the PC industry, is struggling with low average selling prices," said Richard Shim, analyst with research firm IDC. 

Still, Microsoft was able to beat expectations by aggressively cutting costs. Operating expenses fell 8% from a year earlier to $8.4 billion.

Another reason for Wall Street's counter-intuitive euphoria: It could have been worse.

The results, Technology Business Research analyst Allan Krans wrote in a note to investors, "though still weak, reflect stabilization of the economy and Microsoft's revenue streams."

*This post, which was written prior to the close of Nasdaq, has been updated to include Microsoft's closing price.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Most people think of Amazon's Kindle as a slim piece of hardware the size of a very thin paperback book.

In fact, Kindle is also a piece of software that displays digital books on any device Amazon chooses. Today, the Seattle online retailing giant unveiled a Kindle version for computers. The application was part of Microsoft's Windows 7 operating system launch event in New York this morning. Expected to be released in November, the program will also run on Microsoft's earlier operating systems, Windows XP and Windows Vista.

Dubbed Kindle for PC, the free software will let readers view full-color photos and use touch screens to browse books, turn pages and adjust font sizes for digital books purchased at Amazon's online bookstore. Amazon has released a version of the reader for Apple's iPhone and iPod Touch devices.

Amazon's announcement came days after rival bookseller Barnes & Noble said it would start selling its own device, the nook. Due to ship in November, the $259 reader features the same gray-scale E Ink screen as the Kindle, but also has a separate color touch screen. Nook owners also can share their books with their friends for up to 14 days at a time.

In contrast, the Kindle 2 and the Kindle DX, two devices sold by Amazon, has only the gray-scale screens and don't allow users to "lend" digital copies of their books to others.

By releasing Kindle for PC, Amazon is expanding the audience for its digital books beyond just readers who can afford to buy its $259 device to about 1 billion of the world's PC users.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

With more than 8 million "beta testers" using Windows 7 since January and dozens of reviews already published, virtually every aspect of Microsoft's new operating system is already public knowledge prior to this morning's "launch" -- except one.

Can Windows 7 repair Microsoft's reputation and trigger enough sales to pull the technology sector out of the economic funk?

Steve Ballmer certainly hopes so. The Microsoft chief executive and impresario known for his highly energetic speaking style this morning kicked off the launch of its latest computer operating system by saying, "Today is an important day for the computer industry, certainly for Microsoft and I hope perhaps even most importantly for all of the customers around the world."

Much rides on the success of Windows 7. Microsoft is counting on it to lift its sales, which fell last fiscal year for the first time since the company went public in 1986. Computer makers and software companies are praying that Windows 7 will set off a wave of demand for their products, which have been dampened by the recession as buyers postponed PC purchases or opted for ultra-cheap netbooks over full-fledged computers.

Even consumer electronics companies see Windows 7-based computers as a way to make their devices sexier as gateways for entertainment programs on-demand.

"Windows needs to be an incredible opportunity innovation for hardware companies and software companies," Ballmer said at the company's kick-off event in New York. "Windows 7 takes us a step closer to the vision we articulated ... around the three screens -- the PC, the phone and the TV, all communicating across the cloud, the Internet backbone."

Ballmer tried to nail the point home by ...

... showcasing a multitude of computers and devices running on the Windows 7 operating system. Among the gee-whiz gadgets highlighted at the event:

• A laptop that wirelessly charges when placed on top a special surface, using induction technology.
• A 32-inch touch-screen digital television from Hewlett-Packard that serves up movies from Netflix and prime-time TV shows from CBS.
• The world's thinnest notebook, a Dell Adamo XPS that measures 9.99 millimeters.
• An Acer tablet with a touch screen running an interactive, color version of Amazon's Kindle digital book reader software.

Microsoft went out of its way to list the names of other companies using Windows 7 to add features they hope will entice reluctant consumers -- Sony, Denon, Nvidia and Lenovo, to name a few.

According to a study conducted by research firm IDC and sponsored by Microsoft, for every dollar the Redmond, Wash. company generates from selling Windows 7, other companies reap more than $18 by selling products and services around the operating system. A projected breakdown of the revenue is represented in the chart to the right.

In addition, the report estimated that Windows 7 would create 300,000 information technology jobs worldwide, accounting for about 30% of the global growth in IT employment.

Granted, Microsoft paid the tab for this study. But the company is also attempting to learn from a mistake it made when it launched its last operating system, Vista, in 2006.

After Vista came out, complaints flooded in. The operating system was too large for many computers to handle. Software programs had difficulty installing smoothly. And it didn't play nicely with other devices, including some printers and cameras. In short, Microsoft took for granted the thousands of companies that revolved around its operating systems.

This time around, the company took pains to make sure Windows 7 could handle the multitude of devices and programs available, recruiting 8 million beta testers and soliciting feedback from 50,000 engineers from outside companies for months before releasing the product.

Will it help Microsoft repair the damage to its reputation inflicted by Vista and help stimulate limping tech spending?

"It certainly looks more promising than when Vista came out," said IDC analyst Richard Shim.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Need for Speed, Electronic Arts' racing franchise, has raced past the 100 million copies mark, making it one of the top five bestselling video game properties of all time. (The other four franchises in the elite 100-million club are the Sims, Mario, Pokemon and Grand Theft Auto.)

Developed in 1994, Need for Speed has evolved from a game made by a dozen developers to roughly 100 designers, programmers and perfectionists who obsess over cars. EA has cranked out 15 Need for Speed titles, but it wasn't until Need for Speed Underground came out in 2003 that sales got turbocharged. Since then, EA has moved 60 million copies of the game.

Over the years, the franchise has undergone a couple of remodels. The first came with Underground, which shifted the franchise away from "aspirational" Lamborghinis to street-style racers made from customized compacts and souped-up sedans. EA developers knew they had street cred when they began to see body shops build actual parts based on the game's vehicles.

And as computer graphics became ultra-realistic, even car manufacturers got into the act. Nissan, for example, used the game rendering of its 370Z sports car to help unveil the vehicle at last year's Los Angeles Auto Show.

The brand got its second makeover this year. 

"We started to develop different versions for different audiences," said Keith Munro, EA's vice president for global marketing. "We noticed we had fans who liked an authentic simulation experience. But we also had others who wanted an over-the-top arcade style with hyperbolized physics."

The goal: Develop three titles to address different audiences.

The first, Need for Speed: Shift, came out in September, catering to players who wanted an authentic, visceral racing simulation. In November, Need for Speed: Nitro will hit the street offering freewheeling arcade play. Developed for Nintendo's Wii console, Nitro is designed to be easy to pick up and play. And sometime next year, EA plans to open up Need for Speed: World Online, a free-to-play game with Hollywood style chase sequences.

There is fierce competition among racing games -- Gran Turismo, Project Gotham Racing and Forza Motorsport are all formidable franchises with their own ultra-loyal fans. EA is hoping that its three-pronged strategy will help drive sales of Need for Speed's next 100 million copies. On your mark....

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Barnes & Noble Inc., looking ahead to the next chapter in digital publishing, this afternoon took the wraps off an electronic book reader, dubbed "nook." 

Anyone who has read Dr. Seuss' "One Fish Two Fish Red Fish Blue Fish" will recall Theodor Geisel's Nook who took a look at the book on a hook. For Barnes & Noble's $259 device, the hook is its ability to let users lend their books to their friends for up to 14 days at a time. Using the LendMe feature, nook owners can send a copy of their digital titles to their friends' iPhone, iPod Touch, BlackBerry or computer.

The second hook: The nook marries a gray-scale E Ink screen, which is standard with other digital readers such as the Sony Reader or the Kindle, with a separate color touch screen below the E Ink display (see photo to the right). As with the Kindle and the upcoming Sony Daily Edition, nook lets shoppers browse and buy books, newspapers and magazines wirelessly, and without a computer, by hopping on AT&T's cellular phone network.

The New York bookseller said it would start distributing the device in November (free shipping if ordered from the company's online store).

Barnes & Noble, which operates more than 777 stores in the U.S., in July re-launched its online bookstore, which carried 700,000 digital titles.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Sales of video games and consoles in the U.S. eked out a tiny gain in September, ending a 6-month streak of year-over-year declines.

Fueled by the releases of Halo ODST and The Beatles: Rock Band, last month's sales of games and consoles grew slightly to $1.28 billion, barely topping last year's sales of $1.27 billion, according to data released this afternoon by NPD Group. For a more detailed analysis of MTV's The Beatles: Rock Band performance, check out Ben Fritz's post on Company Town.

Unit sales of Nintendo's Wii, Sony's PlayStation 3 and Microsoft's Xbox 360 edged up as shoppers took advantage of the recently discounted console prices by Sony, Microsoft and Nintendo. But on a dollar basis, sales took a 6% hit last month, down to $472.3 million, due to the lower prices. 

Sony, which whacked $100 off the price of its PS3 console in August, tapped into pent-up demand to outsell the Wii and the Xbox 360. Sony sold 491,800 PS3 consoles in the U.S., compared with 352,600 Xbox 360s and 462,800 Wii consoles. Sony's performance ended Nintendo's long reign as the game console chart-topper, at least in the living room. Nintendo also sold 524,200 hand-held DS game devices last month.

Sales of games, however, grew 5% to $649.3 million, helping to make up for the loss in hardware sales. Here are the top 10 titles sold last month (title, platform, copies sold):

1. Halo: ODST (Xbox 360) 1.52 million
2. Wii Sports Resort (Wii) 442,900
3. Madden NFL10 (Xbox 360)  289,600
4. Mario & Luigi: Bowser's Inside Story (DS) 258,100
5. The Beatles: Rock Band (Xbox 360) 254,000
6. Madden NFL10 (PS3) 246,500
7. Marvel: Ultimate Alliance 2 (Xbox 360) 236,000
8. Batman: Arkham Asylum (PS3) 212,500
9. Guitar Hero 5 (Xbox 360) 210,800
10. The Beatles: Rock Band (Wii) 208,600

Source: NPD Group

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

The Cupertino, Calif., company recorded net income of $1.67 billion, or $1.82 a share, on sales of $9.87 billion during the quarter that ended Sept. 26. A year earlier, Apple had $7.9 billion in sales and net income of $1.14 billion, or $1.26 a share.

The results roundly beat Wall Street's already lofty expectations of $1.3 billion in profit on $9.14 billion in sales, according to a survey of analysts by Thomson Reuters.

Apple characterized the results as its "most profitable quarter ever."

Investors, who had earlier pumped up Apple's stock $1.81 to close at $189.86, rewarded the company further in after-hours trading following the earnings release, driving its shares up by more than $14, or 7%.

Not everything Apple touches has turned to gold, however. Although the company sold 7% more iPhones and 17% more Mac laptops and desktops in the quarter compared with a year earlier, iPod sales fell 8%. For the quarter, Apple sold 3.05 million Macs, 10.2 million iPods and 7.4 million iPhones.

We'll have more after Apple's 2 p.m. conference call with investors.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

FCC Chairman Julius Genachowski. Credit: Mark Wilson / Getty Images

At least that's what he told attendees at the CTIA wireless conference in San Diego this morning. The Federal Communications Commission chairman outlined four priorities as a sort of framework for how the Obama administration will regulate the market for mobile Internet service.

Calling it his "MBA plan" (mobile broadband agenda), Genachowski laid out the priorities:

1. Add more spectrum capacity to handle the coming explosion of Internet traffic from smart phones and wireless laptops. From uploading and watching video on phones to accessing electronic textbooks, the uses of wireless connectivity are expected to zoom thirtyfold in the next five years, while capacity is projected to grow only threefold, leading to what Genachowski called a "looming spectrum crisis." He proposes two solutions: making more efficient use of the current network and freeing up more airwaves such as the ones the FCC auctioned off last year.
2. Remove red tape to allow wireless carriers to build their networks faster. Genachowski vowed that his agency would expedite requests to put up cell towers, help clear spectrum and clarify policies on issues such as roaming, a statement that drew applause from the audience.
3. Codify and enforce so-called net neutrality policies. Reiterating his previous statements, Genachowski said he favored regulations that would prohibit carriers from delivering some content faster than others. Though most of today's Internet traffic goes through wired cable of DSL services, a fast-growing portion of data also happens over cellphone networks. In a nod to the wireless industry, Genachowski acknowledged that there should be different sets of rules for wireless companies than for wired cable and DSL businesses.
4. Operate more openly. He called for a "fact-based, data-driven" open dialogue with industry executives.

One industry bigwig, AT&T's mobility and consumer markets chief, Ralph de la Vega, took Genachowski up on the offer. De la Vega's message: The wireless industry ain't broke, so don't go trying to fix it.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Wright is still cagey about what he has up his sleeve, but he's given us a few clues.

Hint #1: It's a toy. Wright will be taking his concept to the New York Toy Fair in February, where he will deliver a talk titled "The Evolution of Entertainment: A Toy's Place" at the Engage! Expo, a conference on the convergence of toys, the Internet, virtual worlds, games and social media.

Hint #2: It will involve games. How could it not? Wright's games have sold more than 100 million copies and generated more than $1 billion in sales for EA, which has invested in Wright's company, the strangely named Stupid Fun Club.

Hint #3: It will have robotic components. "To some degree," he qualifies. "All of our projects have crossover elements. Even calling it a toy makes it too specific." Wright's fascination with robots dates back to when he was a child building model tanks and attaching motors to them.

Hint #4: It will be connected to the Internet. Many toys have developed online components. Ganz's Webkinz, for example, is both an online virtual world and a line of plush toys. Hasbro has collaborated with Electronic Arts to create a virtual world based on the toy company's Littlest Pet Shop line of stuffed animals.

Hint #5: It will rely on crowdsourcing. No surprises there, since The Sims spawned hundreds of thousands of fan-created YouTube videos. Wright cites a toy called 20Q that asks players to think of an object, then proceeds to guess what that object is after asking 20 questions. The program that generates the answers came from a database of questions and answers generated by millions of visitors to a website of the same name.

Still don't get it? Neither do we. But we're still intrigued. Hopefully, Wright will have more to say at The Engage conference at Toy Fair.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

When asked what they would like to get as a gift this year, about 1 in 10 cited a digital book reader. Portable music players, once the hot holiday ticket, got just 3.4% of the vote, while game consoles came in at 6%, according to the survey commissioned by Retrevo, a gadget review website.

Of those who said they planned to spring for an electronic book reader, 62% said they would buy Amazon's Kindle 2 or Kindle DX, while 32% favored the Sony Reader. Although Amazon and Sony dominate the business today, more devices are scheduled to hit the U.S. market within the next year, including the $399 IREX expected later this fall and Plastic Logic due out in 2010.

To give its online bookstore a competitive advantage, Sony today is announcing it is throwing the doors open to independent authors to publish electronic books on its site. Sony said it has partnered with two companies, Smashwords and Author Solutions, to help independent writers self-publish digital books on Sony's eBook Store, which currently sells more than 130,000 titles. It also distributes millions of free public domain books via a partnership with Google. Amazon, on the other hand, boasts 350,000 titles for its Kindle readers.

Although sales of electronic books constitute less than 5% of the $25-billion book market, it's a fast-growing category within publishing, said Chris Smythe, director of Sony's online bookstore.

"With digital, people tend to buy more books," Smythe said. "It's easier, often cheaper, and you can get it right away."

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Today, a celebrity social media site called NameDrop launched its own version of the velvet rope. For $2.99 a month, subscribers get access to celebrity status updates, blog posts and photos.

The site's owner, Ted Foxman, in November sold his company, Eagle Test Systems, to Teradyne for $360 million. The Chicago entrepreneur poured some of that money into creating NameDrop.

The site currently features content from a dozen celebrities, including Cat Cora, the first female Iron Chef, music producer David Foster, and Matthew Stafford of the Detroit Lions. See the full list here.

Why pay money when you can find out Demi Moore's views on slavery for free on Twitter? NameDrop believes fans will pay good money to know what the celebrities are really thinking as opposed to what their impostors are saying. Working in NameDrop's favor is an insatiable thirst for celebrity news.

But as most content sites know, it's hard to compete with free -- even when you are dangling the velvet rope.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

The Japanese company has sold more than 50 million Wiis since launching the device in November 2006, making it the bestselling of the current generation of video game consoles. Indeed, many stores ran out of the console during holiday shopping seasons. But this year, the console is in plentiful supply and U.S. sales are down 21%, according to data from NPD Group.

"The last five months, April through August, tell the story," said Michael Pachter, an analyst with Wedbush Morgan Securities. "Sales are down exactly 50%."

Nintendo also announced it would release New Super Mario Bros. Wii, the company's blockbuster bet, on Nov. 15. To fuel sales, Nintendo plans to reach out to millions of new consumers by holding sampling events where shoppers can try out games on the console.

"Combined with the value pricing, a new blockbuster release right before Thanksgiving and the opportunity for consumers to see for themselves, we will drive holiday sales to new heights," said Reggie Fils-Aime, president of Nintendo's U.S. business.

The price drop is projected to give Nintendo a 40% life in sales in October, said Jesse Divnich, analyst with Electronic Entertainment Design and Research.

Sony in August slashed $100 off the price of its PlayStation 3 console to as low as $299. Microsoft countered by offering a temporary $50 rebate off its $299 Xbox 360 Elite console, bringing the price tag down to $249.

Let the price war begin.

Updated 7:21 pm: This post has been updated to include Nintendo's confirmation of its price cut, the release date of New Super Mario Bros. Wii and a comment from the company.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Google, which has been likened to "parasites" and "tapeworms" by editors who resent the company's efforts to aggregate news on the Web, this afternoon offered an olive branch to publishers of newspapers and magazines.

Unveiled by Marissa Mayer at a TechCrunch 50 event in San Francisco, Fast Flip is actually more of a carrot than an olive branch, because it offers publishers a potential additional revenue stream.

Here's how it works.

Readers can rapidly browse articles much like flipping through physical magazine or newspaper pages. Fast Flip serves up screen shots of the Web pages containing relevant articles, cropped to show just the article and the masthead. While typical news Web pages can take several seconds to load, Fast Flip is designed to respond almost instantly, replicating the feel of a magazine.

The articles are organized by what's popular among all readers that day, and by each reader's personal preferences. Readers can refer the articles to their friends, or "like" an article, much the same way articles are "Dugg." If a reader wants to go beyond the first screen to read the full article, a click takes them to the publisher's website.

"We wanted to bring the advantages of print media, the speed and hands-on control you get with a newspaper or magazine, and combine that with the technical advantages of the Internet," said Krishna Bharat, who created Google News and is a Google Distinguished Researcher. "Such as continuous updates, recommendations from the community and friends. We wanted the best of both worlds."

But nothing in either world comes for free. To make money, Fast Flip also serves up contextual ads around the screen shots. To entice publishers to share their content on Fast Flip, Google agreed to share "the bulk" of the revenue it receives from ads on Fast Flip's pages.

About three dozen traditional print publishers ...

Screen shot of Google Fast Flip. Credit: Google.

... so far have taken a bite of the carrot, including the New York Times, the Washington Post, the Atlantic, Business Week, Newsweek, the Center for Investigative Reporting and National Geographic. Publishers of online content have also thrown in their work, including Salon and TechCrunch. (Tribune, which owns the Los Angeles Times, is not among the participants.)

Fast Flip is making its debut today in Google Labs, a section of Google reserved for experimental products. Bharat described the 5-month-old product as in its "very early stages."

"We haven't had a lot of time to understand how users will respond," Bharat said in an interview. "Putting it into Google Labs allows us to gestate an idea."

The fledgling project is part of a broader effort by Google to help newspapers broaden the size of their audience, increase reader engagement and help monetize online content, Bharat said.

It's also a way for Google to answer the slings and arrows thrown by its critics, including Wall Street Journal Editor Robert Thomson, who called the search company and other news aggregators such as Yahoo "parasites or tech tapeworms in the intestines of the Internet."

The venomous words underscore a basic frustration among newspapers and magazines facing a precipitous plunge in revenue as readers flock online to read content free of charge.

Several efforts are underway to address the issue, including a proposal by News Corp. to build a consortium of newspapers that would charge its online readers. Another project, Steve Brill's Journalism Online, is seeking to develop the technology for collecting fees from readers. Brill's effort has attracted more than 500 newspapers.

-- Alex Pham and Dawn Chmielewski

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.