ReadWriteWeb DeathWatch Update: The Unlucky 13

If there’s one thing the DeathWatch knows, it’s that all things must come to an end. So we’re pausing to review the fortunes of our first 13 unlucky inductees. The fates of some of them may surprise you.

In reverse chronological order, here’s a look at the initial baker’s dozen and what they’ve been up to since joining the DeathWatch over the last three months (updated October 6, 2012).


Zynga

It’s only been a week since the casual gaming company hit the DeathWatch on August 27th, but Zynga shares have dropped again on news that Chief Creative Officer Mike Verdu was leaving his post, along with other high-profile execs. This kind of churn is probably inevitable among staffers looking for a quick upside, since most Zynga stock options will be underwater for some time, but it should eventually level off.

On the upside, Zynga’s first Partners for Mobile game just shipped, and it’s completely different than any other Zynga title. Mobile gaming control options still kind of suck for first-person games, so the gameplay suffers, but that should get better over time. If Zynga can become the go-to software development platform for mobile gaming, it has a shot at reinventing the company and reversing its fortunes.

Motorola Mobility

It’s official. Google is selling off Motorola’s Home Division. That’s good news for Google in the short term, but it could really hamstring plans for expansion into the market for TV set-top boxes.

Despite the loss of potential toys, Motorola keeps on working with what’s available. New since August 20th, it looks like Motorola will be making a push with a new device line in September. The rumor mill seems pretty confident that the devices will include a Medfield-powered unit with rip-roaring specs, and marketing copy about “taking it to the edge” implies an edge-to-edge display. With a decent form factor and battery, the phone could put Moto back in contention for #4 in the handset market. But is #4 really good enough for the long term?

Best Buy

After Best Buy hired CEO Hubert Joly to reject the Schulze buyout and swing the axe of austerity, investor confidence plummeted and the dreaded stock downgrade arrived. Investor hopes (and the stock price) got a bit of a bounce as the Schulze buyout got another chance, but experts think it’s unlikely to go through. As the Wall Street Journal asked last week, the bigger question is Can Electronics Stores Survive?

Electronic Arts

After laying off staff in its newly acquired PopCap unit, EA has readjusted its Free-to-Play focus, venturing away from Facebook and attempting to cast a broader, multi-device net. It’s a good and necessary goal, but we’ll have to see how well EA can execute. Meanwhile, Madden 13 has the footall franchise back on the map with excellent reviews and record sales. It seems EA has bought some more time to figure out its social strategy. It will need it, as the company’s overall challenges haven’t softened since August 6th.

Netflix

Netflix hasn’t made any major blunders or advances since joining the DeathWatch on July 30th, but the rest of the industry hasn’t stood still. HBO fired a shot across the bow with HBO Nordic a streaming movie service available only in Scandinavia. 
Despite the abrupt exit of Blockboster from the space, more direct competition is inevitable, so Netflix may have to do something bold. Perhaps acquiring what’s left of OnLive to leapfrog GameFly?

T-Mobile USA

Since being inducted into the DeathWatch on July 23rd, T-Mobile has done nothing to stop the bleeding. Earlier this month, it lost more than a half million conract-based subscribers. If Deutsche Telekom’s infrastructure investments really happen, the company could be a technical competitor, but without subscribers, all that capacity could prove a liability. Here’s hoping that the all-hands announcement scheduled for the day everyone else gets the iPhone 5 is a game changer.


Groupon

Since July 16th, a Barclay’s downgrade and a patent infringement lawsuit have damaged Groupon’s stock pretty substantially, but many experts still think the company remains overvalued. If Groupon has any shot at long term success, it has to move beyond traditional daily deals. There are some early signs that it may be doing just that with its move toward lower-margin but more sustainable retailing of physical goods. Better late than never.

Sony

Changing the course of a behemoth as large as Sony takes more than the couple of months that have passed since the company was inducted into the DeathWatch on July 6th. So far, the best thing to happen to Sony has been the OnLive debacle, which makes Sony’s unrelated decision to jettison the service in favor of its own on-demand game competitor look downright brilliant. Product releases have been a mixed bag, including ho-hum smartphones, a respectable consumer camera, an affordable streaming music service, and a gutsy new lap-pad that shows Sony might be willing to take some risks. What’s missing? A convincing living-room attack plan. The PS4 needs to be the crux of any recovery strategy, so DeathWatch is withholding judgement on any turnaround until we see a demo.

Barnes & Noble

Barnes & Noble - inducted June 29th - is making a necessary and aggressive push for the Nook overseas. The company is starting with the UK, but it’s not alone. Building sales channels is half the battle. The rest involves filling that channel with the best possible hardware and content. To that end, the DeathWatch is waiting for something big to emerge from Barnes & Noble’s Microsoft deal before predicting a reversal of fortune. In the meantime, profits remain out of reach.

38 Studios

In early August - just over a month after 38 Studios joined the DeathWatch on June 22 - the Rhode Island Economic Development Corporation officially took hold of 38 Studios assets, including the games Kingdom of Amalur and the remains of Project Copernicus. All that’s left now is to see whether some of that amazing intellectual property winds up in the hands of another publisher (DeathWatch is betting on EA). Until then, while we mourn the loss of a lot of good work, we’re grabbing some popcorn and waiting for the latest round of It’s Not My Fault.

Nokia

Samsung has just beat Nokia to the punch with a Windows 8 smartphone. On the surface, it’s not a huge deal, but it showcases Nokia’s weakness. Windows is Nokia’s only gig going forward, but Microsoft isn’t throwing the Finnish phone-maker any bones. Nokia’s stock bump from the Samsung / Apple verdict was short-lived. If Nokia hopes to lose its junk status, it will have to crawl out of that hole on its own – one smartphone at a time. That’s going to take a lot more than price cuts. Things are arguably worse now for Nokia than they were on June 15th when it became a DeathWatch victim.

HP

HP remains committed to the PC and server markets, even as it those businesses wither on the vine. Still, while there’s still cash on hand and customers who answer the phone, there’s hope. A new tablet division looks like no more than a shot in the dark, but at least it displays a willingness to push the envelope a little. The new Envy X2 hybrid device shows some interest in redefining “PC,” as well. But as promising as these developments seem, baby steps aren’t going to turn around decades-old thinking for a company the size of HP that recently suffered a disastrous earnings report that included an $8 billion writedown of its Enterprise Services Business and the biggest quarterly loss in the company’s history. And regardless of new products, Whitman will have to win back investors hearts and minds, after they met her last announcement of weak earnings with a 13% drop in value.

Research in Motion

When DeathWatch premiered on June 1st, Research in Motion was an easy choice. Today, the company is still reeling from missed numbers and massive layoffs. Sure, RIM has a slate of new phones and a brand-new operating system it hopes will turn things around. The only problem? They’re still months from being ready to ship. Plus, it seems that even previously strong overseas markets may be weakening. Even with the Blackberry 10 operating system and shiny new hardware to run it, the best RIM can hope for is retaining existing customers while it eyes a sale.

So there you have it. A comprehensive update on the first 13 ReadWriteWeb DeathWatch victims. Stay tuned in upcoming weeks for some interesting new twists in the DeathWatch!