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But consider two things. The first was already discussed on plenty of places, from Reason Magazine to the Jon Stewart Show. The New York Times disclosed the first surveillance program that’s actually legal and not controversial at all. This is the first program the administration shouldn’t be ashamed of admitting at all. The opponents will counter that it’s not the President’s image that counts, but the security of the nation. This is also a valid point. However, they fail to realize that any terrorist or criminal with half a brain would have expected the existence of this program a long time ago. By fuming about revealing the existence of the financial surveillance program, conservatives show how much they underestimate the terrorists. This has caused the loss of countless lives, and unless we start taking the terrorists seriously we’ll be losing countless more.

Underestimating the enemy leads to complacency. And thus, we are currently in a situation where we are able to intercept the communication of only those people who are innocent or too dumb to use even the simplest methods to evade surveillance. Just consider:

• Phone wiretapping. Direct connection voice services have been around since Windows 3.1. You don’t use any voice or VoIP network; instead connect directly to the end user. You’d need to monitor all Internet traffic to capture these data streams. As an alternative, you can use phone services of instant messenger programs, and connect to the Internet through a proxy from a safe country. A terrorist in Iran could connect to a UK proxy, and call up his friend in the US. The surveillance software would give this call a very low priority level; that is, if the software was able to monitor these calls. It isn’t.
• Internet monitoring. AOL does not monitor its traffic at all. Earthlink monitors a very small portion of its traffic. Sprint, the nation’s largest Tier I ISP, misses 40% of the most common Internet attacks; it does not monitor for non-malicious traffic. Those who monitor parts of the traffic record the data on high-capacity tapes and physically ship them for analysis. The only outlet that monitors and stores all Internet traffic going through its pipes is the Department of Defense. They collect around 500GB of data per day, but only for forensic purposes. That’s because running a simple query on the data can take up to two weeks. What I’m saying is that there is currently no monitoring of Internet communications. The only thing the security agencies can do is to monitor specific traffic from specific IP blocks, such as certain countries.
• E-mail monitoring. Monitoring like this is feasible. Look for certain traffic from terrorism-friendly countries. As before, using instant messaging and IP anonymizers will do the trick.
• Web-site monitoring. Security services love to spend their time looking for secret messages on known terrorist Web sites. If a terrorist is too paranoid, all it takes is to open an account on Flickr or similar service, and upload family pictures with encoded messages will be undetectable. In fact, this is so many steps ahead of current surveillance capabilities (at least those the government admits to) that the US won’t ever catch up to even the least computer savvy terrorists. To make the bad news even worse, the incremental inconvenience for using such system is minimal.

Instead of tackling the identity theft issue, the authorities are as complacent as with the terrorists. They claim that everything has been fine with the stolen laptop with over 26 million identities because the data appears not to have been accessed. Here’s news for the authorities: many hard drive recovery methods, such as using the Knoppix Live CD, can access even password-protected portions of the disk and extract data, without triggering the flag that would identify the data as having been accessed.

What was I trying to say with this? That revealing the financial surveillance program is not news. That our opponents, whether terrorists or criminals are much more savvy than we give them credit. And that all these programs achieve is to keep us complacent until the next big one hits. And there’s nothing we can do about it, no matter how much the government spies on those people who have nothing to hide, while knowing fully well that it does not have the capability to spy on those who don’t want to be seen.
June 30, 2006 at 3:35 pm by Jozef

The StarForce Mafia
A guy with two thugs walks into a small corner store and tells the owner: "You've got a nice small business running here. It would be a shame to see it destroyed, but if you pay me 5% of your sales every month, I make sure it ain't gonna hapen." The store owner catches the drift, and knows he'd better pay or the two thugs would trash the store, and break his legs in the process.

Another guy approaches a company and says: "You've got a nice product here. Too bad it will be copied by countless users and you'll never make a profit, unless you buy our technology to protect it." Most companies caught the drift. Some were even naive enough to think that this was a genuine offer to help. Unfortunately, as soon as one company refused to pay the protection money, the gig was off, and the Mafia thug was the first one to point out how to copy the product.

The pretense is now gone. What was once considered to be a company that was genuinely interested in fighting software piracy has now showed its true face. It is a group of thugs who will be very happy to encourage piracy if someone doesn't buy their product.
March 12, 2006 at 2:36 am by Jozef

Selling used games is the most natural thing to do
The Guardian has recently published an article on the growing unease of the gaming industry with second-hand sales. The article has made its rounds on Slashdot and a few blogs. Basically, the video game industry is complaining that the resale of used games cuts into their profits. Instead of purchasing a shiny new game for $50, gamers wait a few days or weeks, and buy it second-hand from specialty stores or on-line. For full disclosure, I must admit that I’m one of the culprits: I am actively selling games I don’t want anymore through Amazon.com, and I’ve purchased most of my games in the same fashion.

The gaming industry is right to be worried about the second-hand sale of its products, just like any media content industry should be afraid of it. However, none of these industries has any right to prevent its customers from trading used content, at least not in the capitalist society such companies flourish the most. The market for a product is defined as the equilibrium between the demand and supply. There are folks who’d purchase a game for $50, but there are also those who wouldn’t pay more than $30. The amount of both groups and all people on the demand curve is what we call the elasticity of demand.

The elasticity of demand tells you how shoppers would react if the price changed in a certain fashion. For example, a perfectly inelastic demand for a product would yield no change in amounts sold, regardless of the price change. Basic staples or gas fit best into this category: no matter how expensive milk gets, on aggregate people would still purchase roughly the same quantities. On the other hand, highly elastic demand for product may actually work in favor of lowering prices, as every 1% drop in price would yield more than 1% growth in sales, thus increasing the overall revenues.

Elasticity of demand is a function of multiple factors. Considering video games, the most influential factors include the availability of substitutes, backward availability, portability and the product’s life span. There are plenty of substitutes for games; the most often mentioned ones are DVD movies. They cost on average $15, and in light of this number, especially if the content of the DVD is enhanced, people may perceive new games to be overly expensive. Thus, there may be fewer people willing to buy the game at its full price and more at a discount, flattening the demand curve.

The second factor, backward availability, is often underrated by industry observers. At a time when the vast majority of products are derivative works of an earlier product, such as sequels or remakes, the availability of the original works can undercut the sales of new products. For example, I have recently found out that my computer was not powerful enough to run the new Civilization IV. However, it is more than capable of running the original Civilization, and plenty of other games, thanks to specialized software. I have spent days replaying Settlers II, even though there have been several more modern versions of the game, and the same holds true with many other strategy, role-playing and action games. The fact that I can still play all these games and thus spread their cost over the years ($50 over 10 or more years becomes quite cheap), forces me to perceive their remakes as being too expensive at their current price.

The industry cannot do anything with either of those two factors. They are very well established in all industries dealing with any kind of demand curve, and they learned to live with it. However, the next two factors can be significantly affected in the industry’s favor, thanks to the digitization of data.

The first such factor is the portability of the product; in other words, the ability of the customer to resell the game. Various media industries deal with this issue in different ways, but always with the goal to limit or eliminate the portability altogether. For example, video companies want to legislate a so-called “broadcast flag”, which will prevent users from storing their recorded shows indefinitely or from allowing anybody else to watch certain shows. On-line music stores, on the other hand, use digital rights management software, which limits the number of copies a user can make, and usually doesn’t allow the user to resell the song to another user. Video game companies could also limit the portability of the games. In some cases, most notably with Valve’s Half Live II, they have already attempted to do so, by forcing the users to register on-line, and selling additional licenses if the user sold the game to another person. When this approach becomes commonplace is still an open question, as there is still a large market of people who aren’t connected to the Internet or are unwilling to have their usually better gaming computer connected to the Internet (I fall into this latter category).

The other factor the gaming industry can affect is the game’s life span. This is a delicate balancing act. In some cases, the replay value of games has been so large that all subsequent remakes suffered from their own old predecessors cannibalizing their sales. Such is the case of games like Civilization, Morrowind, Sid Meier’s Pirates! and more. On the other hand, very short life spans can have negative consequences for the given game. This is often the case of recent movie conversions and action games, which can be finished within a few hours. This not only creates negative word of mouth about the game, decreasing the number of people willing to pay the game’s full price, but also makes the game available much sooner on the secondary market. I am not a game designer, so I don’t know where the balance between the two extremes lies, or how to determine it, but I am sure there is one, as several highly successful series, such as Might and Magic, Wizardry and Warlords managed to attract significant demand with their subsequent titles.

All in all, I am not entirely sure how honest the industry is when it whines about second-hand sales of its products. As any other industry, it faces one of the most natural things in a market economy. However, this particular industry has the advantage that its content is digital, thus allowing for the creation of artificial barriers to second-hand trading. I believe that the industry executives work long and hard to find a viable solution, while putting on a sad public face, in order to gain some sympathy and justification for their efforts. Unfortunately for them, the worms have left the can, and the more they’ll try to suppress second-hand trading, the more will they face the problem of backward availability. With software already available to play older games on newer computers, putting any restriction on second-hand sales will just force a larger number of users to look for alternatives, and they’ll discover that they’d be able to play their already purchased older titles on their computers. As a result, even if gaming companies switch to the new paradigm, the number of additional customers they get may disappoint them a little.
January 24, 2006 at 2:28 am by Jozef

Analyzing Cerner
A few days ago, Wall Street Journal has accused Cerner (CERN) of accounting irregularities. I’ve never heard of the company before, as it didn’t show up on my stock screener. However, the article, full of pointers to bad accounting practices has sparked my interest, so I conducted a quick and dirty analysis of the company. For that, I used only the company’s SEC filings, and yet a simple analysis has revealed so many red flags that I’d never end up investing in that company. This entry does not serve as a recommendation to purchase or sell the stock, only to show that such articles like the one in WSJ shouldn’t have to exist if the investors and investment analysts did their job properly and actually read annual reports.

For my analysis, I took the financial statements as reported for the past few years. I adjusted them by accounting only for recurring accounts, as they can be expected to grow in the future. I did so for the income statement, left the balance sheet unchanged and recalculated a new cash flow statement. The article mentioned possible creativity in creating the cash flows statement, which is why I recreated it myself.

In the next step, I looked at the company’s software capitalization methods. Cerner states in its annual reports that it expenses software after its technological feasibility is proven, and then it capitalizes it. While this is permissible under accounting standards, many companies, including Microsoft, never capitalize its software development costs (insert jokes about the technological feasibility of Microsoft’s software here). However, for an useful comparison for Cerner’s financial statements with other firms, I recalculated the company’s financial statements (in this case the income statement and balance sheet), as if it expensed all software.

Altogether, I found the following irregularities:

• Software amortization period has been around 7.4 years over the past few years. The company claims an amortization period for software of 5 years, which by itself is longer than the industry standard, but in fact it amortizes only about 13.5% of its gross capitalized software cost every year. As a result, I expect a write-down of capitalized software soon, which will impact shareholders’ equity. To get in line with a 5 years amortization period, the company would have to write down a significant portion (I expect around $100 million) in capitalized software, which would result in a similar decrease in shareholders' equity.
• The CFI profile of the company has significantly changed. Cash Flow to Income ratio is one of the best, yet much underused indicator for possible troubles in the analyzed company. Usually, one calculates it after adjusting the operating cash flow and income for non-recurring items, which is what I did, but I also used the numbers provided by the company. In both cases, the ratio has been below 1 until 2002; by 2003 it shot upwards significantly, and remained at roughly that level in 2004. This signifies that the company generates plenty of more operating cash flow than income. While this is quite possible, such a change comes gradually, not so suddenly. This has been achieved primarily by falling net income in 2003, the tightening in accounts receivable in 2003 and the loosening of accounts payable in 2004. Still, the level of change is highly disconcerting.
• Free cash flow is negative. The first indication I got of this was when I ran a cash variance report, trying to see how much cash is being generated by the company’s growth. I found that discounting for changes in taxes payable and receivable, the company’s growth in 2004 has cost it $4,000. This is an immaterial amount, but stark in contract with the company’s $54.5 million reported free cash flow. Consequently, I recalculated FCF expensing all software and removing all non-recurring items.
• The company is recognizing reimbursed travel expenses as revenue. Comparing older financial statements with new ones, I found that these show no gross margin at all. In other words, the same amount is included in sales and operating costs. This has only two effects: it inflates the company’s revenues and gross margins. While the increase in revenues is only 3.5%, I still took this amount out when recalculating the financial statements.

Note: Per share ratios use Friday's share price and 2004 annual report financials, and are to be used only to illustrate the significance of differences between the reported and calculated financials.

That said, I do have a few positive things to report:

• The company doesn’t seem to become too reckless in new customer acquisition. It has kept a growing allowance for doubtful accounts, both in absolute numbers and the percentage of sales. I always like to see that.
• The company still looks healthy, just overpriced. In fact, adjusting the net income yielded positive income throughout the years, including 2001, when the company reported a net loss of $42 million, due to a non-recurring impairment of investments charge.
• The company is very good at reporting. Despite the irregularities, I found the annual reports to be very informative, even fun to read. Cerner has been very diligent in reporting everything and went into such details as enumerating and dissecting all its acquisitions.

December 18, 2005 at 9:22 pm by Jozef

Jim Crammer's Mad Money - A Scorecard
The other day, I was watching Mad Money on CNBC, when I noticed that Crammer has recommended Cypres Semiconductors. That company has been one of the most vocal opponents of options expensing, because the firm is a major culprit in abusing option compensation plans to inflate its earnings. Curious how other buy recommendations went, I checked their latest financial statements.

For my small experiment, I looked only at the recommendations from September 8, 2005. I only looked at the companies latest 10-Q, and there only at the financials, which is usually my first step when analyzing a company. I did not take into consideration the company stock price (and thus price-related ratios), nor did I look at the company's line of business. I was more interested in how transparent the company's financials were, and what was its liquidity position, two factors I consider very important for long-term investing. Here are my findings:

• Lowe's - It's got very nice financials. Great liquidity, very low accounts receivable. Inventories are a little too high for comfort, but I still liked what I saw. Point for Crammer.
• Hewlett-Packard - Receivables were a little too high, at roughly 1.5 months of sales. On the positive side, it has very low long term debt. Unfortunately, the company's net earnings fell recently, and on a pro forma basis HP actually posted a loss for the last quarter. Considering a dividend payout ratio of 142% (this includes stock repurchases), the company may need to cut out more repurchases if it doesn't improve its earnings. Crammer's enthusiasm is not justified, but it's not realy terrible, either.
• Chesapeake Energy - The firm shows zero cash and equivalents, and relatively high long term debt. The former is a huge red flag for me; I would do a lot of extra research before deciding on this one. Point off for Crammer; back to zero.
• Grey Wolf - Just turned profitable. Very good liquidity, despite relatively high receivables. This is deffinitelly an attractive company at first look. Crammer: +1.
• Goodrich - Improving margins, but very high inventory levels and long term debt. Neutral.
• Marvell Technology Group - Goodwill accounts for nearly half of the company's assets. Extremely high stock compensation causes the reported earnings to be cut nearly by half when restated pro forma. For me, this is a huge red flag. If I were to look at stock-related ratios, I'd adjust them accordingly; for example, I'd double the P/E ratio. Crammer: -1
• Broadcom - Very nice liquidity position, with nearly no long term debt. However, very high stock-based compensation pushes the company into high pro forma losses, compared with slightly positive reported earnings. Yet another miss for Crammer; we're down to negative territory.
• IntraLase - Very good liquidity, with strong cash position. However, the company also has strong stock-based compensation, but this doesn't seem to be reflected in pro forma statements. Deffinitelly a company that would require more time to research, when I run out of better picks.
• International Paper - Net earnings are falling, and currently the company pays more in dividends than it records earnings per share. With telatively high long term debt and falling cash positions, I'd be afraid that the dividends could be cut soon. Crammer is at -2.
• Sonic - Transparent financials, and a good financial position. Deffinitelly a company I'd research more; point for Crammer.
• Wyeth - Transparent financials, good liquidity position, but high receivables. Still a company I'd look at. Crammer is back to zero.
• BlueLinx Holdings
- Fast growing receivables, relatively high long term debt. Neutral.
• Cypress Semiconductor - As I wrote before, this company is notorious for financing its revenues through stock options, which are not represented in reported net earnings. Pro forma earnings are always significantly lower than net earnings, which is even more unfortunate now, that the company began to record losses. Crammer: -1
• Airgas - Very simple capital structure and transparent financials. Even though the company has relatively high long term debt, I'd still take a closer look at them, thanks to their simplicity in reporting. Crammer: 0
• William Wrigley Jr - Relatively high long term debt, and the financials are not simple or attractive enough to care too much. Neutral.

The incredible ESRB
in.cred.i.ble adj 1 too strange to be believed; unbelievable: an incredible idea/story/excuse -see also CREDIBLE
(Longman Dictionary of American English, 1983. P. 351)

Not that the ESRB had too much credibility to begin with, but today it lost all what remained. The video game rating agency has decided to re-rate Grand Theft Auto: San Andreas from "Mature" to "Adults Only". For those who didn't follow the story, this is what happened: A hack for the game, called Hot Coffee was released by an anonymous gamer. This hack, when installed, allowed people playing the game to have sex with their girlfriend (a movie of the action is available here). All politicians act enraged, and pressure the ESRB to change its rating of the game. ESRB does so, and says that Considering the existence of the undisclosed and highly pertinent content on the final discs, compounded by the broad distribution of the third party modification, the credibility and utility of the initial ESRB rating has been seriously undermined."

Now let's back up for a second. The Grand Theft Auto series started a trend of ultra-violent video games, where you play a street-level gang member. The game allowed to kill people, including prostitutes that the player didn't want to pay, and cops. Drug dealing and trafficking, robberies and carjackings were even more common. While some people blamed the game for real-life killings, the ESRB (and the majority of politicians) did nothing. However, as soon as a little skin is shown and the player engages in consensual sex with his girlfriend, quite possibly the only display of love in this violent series, everybody runs amok. It's good to know where people's priorities are...
July 21, 2005 at 3:48 am by Jozef

Paying for success, Russian style
Imagine a company that has grown tremendously in the past few years. While it is still unclear how it was privatized in the first place, the company became the largest taxpayer in its business sector, despite the fact that it dowsn't have the highest earnings, and even listed its shares and paid a nice dividend. The company decided to expand in a very logical sense, and became the first one in its segment to use US-style accounting to increase the transparency of its books. Unfortunately, the majority owner refused to pay lip service to the President of the country, and in return, the government sent the company into an artificially created bancruptcy. The stock plunged from over $50 in April to $16 now (US-traded ADRs).

This is the story of Yukos, one of the largest Russian oil producers. It is also yet another warning story against investing in Russia; it shows that once you become successful, the government will break you. If you are a small shareholder who purchased ADRs of Russian companies, it may be a small consolation to you that at least you don't end up in jail.

The story of Yukos is long and complicated, so let's just point out the main causes of its downfall. There were three: First, the agreement between Russian oligarchs and President Putin. Before he first became President, Putin got into an agreement with the Russian oligarchs who agreed to support him, as long as he didn't treat on their ground until 2008, when his second term expires. Putin, however, decided to break this agreement and strike at the oligarchs, presumably in an attempt to take control over the Russian economy for the time when he's not President anymore. The second problem was with Yukos' main shareholder, Mr. Chodorkovsky. He had the guts to support pro-democracy parties in the latest parliamentary elections, against Mr. Putin's autocratic party. However, the third problem was the most crucial: Yukos decided to break the monopoly of the state-owned gas transport company, Transneft, and build its own pipeline.

This plan was one of the best and most logical business decision I've ever seen. Transneft currently holds a total monopoly on the transport of Russian oil through pipelines, and charges the gas producers exuberant fees. Not only that, though. Russian oil is of a very low quality, and most developed countries don't have sturdy enough reffineries to deal with it. As a result, it's sold mainly into Eastern Europe or loaded on tankers and shipped to Asia. The latter, however, creates additional shipping costs, cutting into the oil producers' earnings. Yukos wanted to build a pipeline directly into China, the world's largest consumer of raw materials. Of course, the government would've hated to see its monopoly to be broken, so they had to step in...

The government decided to shut down Yukos alltogether. To do so, it accused the largest tax payer among oil producers that it cheated the state on taxes, and charged it with roughly $3.4 billion in back taxes. At the same time, however, the government blocked all assets of the company. As a result, even if Yukos wanted to pay the ransom, it was unable to access its own assets. Naturally, the government declared the company bancrupt. In order to pay the $3.4 billion, the government now decided to auction off the gas mining division of the company, Yuganskneftegaz. However, this division is worth at least $15 billion, and without it, Yukos cannot survive.

So what's going on here? The second round of Russia's robber-baron privatization. Here's how it works: back in the 1990s, if you pledged allegiance to the President, you got state-owned assets for a fraction of their price. Now, a new President is asking for the same allegiance. Those who don't give it to him are thrown in jail, their assets are nationalized through phony charges, and then sold again, for a fraction of the price. Welcome back to the middle ages.
July 29, 2004 at 11:05 am by Jozef

The consumer again loses
For the first time since the fall of communism, a new group of consumer products got its prices set by a third party, not the seller. Thanks to yet another communist directive from the EU, merchants can't set their own cigarette prices; they need to follow the prices set by the cigarette producers. In addition to "protecting the consumer", this is aimed at avoiding tax evasion.

Currently, I work for a family-run store, where I determine the sale prices, by adding a predetermined percentage to our purchase prices. In the case of cigarettes, it is 16%, determined by the amount of losses from theft, warehousing and sales costs, plus 1% of profit, which is lower than on other items, but cigarettes were always viewed as means to attract more customers. According to the new rules, we'll be only able to add 10%. Rather than selling with a loss, we dropped cigarettes.

Anti-smoking activists may be now jumping from joy. However, the sad truth is that we subjected our 1200 customers to travel 4 miles to the nearest town to buy cigarettes. Including the travel costs, they'll pay more for a pack than before, unless they purchase ten or more packs. In addition, we'll have lower profits and sales, and will pay less on income taxes and sales taxes, respectivelly. So much for protecting the customer and increasing the tax income...
July 7, 2004 at 8:20 pm by Jozef

EU = COMECON 2
COMECON, or The COuncil of Mutual Economic Assistance, was the Soviet answer to the European Union. Not only that; it was a way for the Soviet Union to leash its satellites more tightly. Under this free trade agreement, countries were assigned production quota for many of its products, which were unrealistically high or low. This way, countries were forced to import or export certain products, and these mandated trade agreements created a tight network the Soviets hoped other communist countries would succumb to. Unfortunately, this also caused periodical shortages of certain products.

Last week, Slovak newspapers reported that there was no butter available in Slovak stores. Most Slovak butter got exported to Northern Italy, which offered much higher prices for it. The reason for such higher prices was that Northern Italy was given artificially low butter production quota by the EU, and the supply shortage has driven the prices up. In a related news story, the Czech republic has a similar problem with beef. The shortage of beef there has driven up prices, and the country now imports bees from Ireland, which has been given excessive beef production quota.

Sounds eerily familiar? I wish it wasn't so, but it is. It seems that the communists indeed won, and that COMECON has taken over the EU, at least in spirit.
July 6, 2004 at 5:49 pm by Jozef

The beauty of monopolies
Slovakia has only one wireline telecom provider, Slovak Telecom. As a result, they are also the only one high-speed Internet provider here, unless you get a microwave (2.4GHz long-range) connection. The net result? For an ISDN line (officially 128kBps; my max measured speed being 21kBps), we pay $0.00367 per second, or $13.22 per hour of Internet connection. Beat that!
June 26, 2004 at 10:30 am by Jozef

Year 2003 in review
2003 is over, happy 2004! For me, 2003 was a year of great success and no grief. I think that on a professional level, this has been the best year I've ever had, and for the sake of remembering it in the future, here's a short review:

• In June, I took Level I of the CFA test. The five months of sweat and sleepless nights have paid off, and I passed.
• In September, I took the GMAT, in preparation for applying to MBA programs. I scored a 770, placed in the 99th percentile, and instead of schools that average 550, I was able to apply to any college of my choice. It took me a considerable amout of time to decide where to apply, and I think all schools I applied to deserved to be in my selection. I'm still waiting for results.
• In October, several of my pictures were published in that month's AMC Outdoors magazine. I was approached, by the editor for those pictures, and my big break into published photography couldn't be any better.
• Also in October, the Sparta Independent, a local paper ran a first-page story on hiking in New Jersey, which profiled me and my site.
• In december, I was appointed as a reviewer for DIYGames.com. In addition to being a reviewer, executive and programmer at Netjak.com, being asked to write for a site that has such high standards was a very pleasant surprise for me.
• Trhoughout the year, I lived to the fullest. I learned a lot new, I hiked like never before, and the quality of my picture collection has greatly increased.

Virgin's definition of fair prices
Yesterday, New York Times reported that Virgin music stores still sell Universal Music CDs for $15.99, even though the suggested retail price is $13. Today, Virgin responded: "We will not be told what we should sell or how we should sell it to our customers, but rather will continue to offer them what they want, at a fair price."

Of course, they have the full right to sell their music CDs for any price they want. And I have the full right not to shop there anymore and tell everybody the same.
October 30, 2003 at 8:29 pm by Jozef

At least Vivendi is honest about their disregard for fans
The biggest story in the PC gaming world is the rumor about a new Leisure Suit Larry game. This series has been hugely popular in the 80s and 90s, for merging great humor with a little erotica. The games were never pornographics, but they succesfully crossed the line of political correctness, and actually made high-quality jokes with sexual undertones. All this, thanks to Al Lowe, the designer of the series.

Vivendi's gaming unit, Sierra Entertainment, decided to do another Larry game. As of now, there is no official word. The rumor was sparked by a Computer Games cover for its upcoming issue (meanwhile, the magazine has removed the cover from its Web site). Then came the bombshell: a member of the design team has posted on an unofficial Larry board, pretty much admitting that the game is in works. However, the really striking thing is how much disregard he shows for the fans of the series. He wrote:

Let me be more clear - we're not interested in creating adventure games that I think most old-school, hardcore, adventure game fans think they want.

The fact is, there aren't enough of these old-school, hardcore adventure gamers for us to revisit the genre. We're not going to set ourselves up to fail.

While we're not interested in slapping an historic brand on a game just to get increased sales, we're also not interested in being so faithful to these historic brands that we destroy our sales potential.

I believe we are on the right track and what I'm asking is that you all keep an open mind. What we offer in the future might not be 100% exactly what you see in your head, but if you think about what we're trying to accomplish you'll see that it's the right thing to do (I hope).

What we're attempting is no less than a revolution. You'll soon see why.

Let's start with the lesser problem I have with this post. He pretty much admits that the game design will not rely on the creative spirit (how could it; Al Lowe was not asked to help out), but on market research. If we applied the same philosophy on 1980 (no people play computer games, so why create one?), there would not be any video games today. I don't blame the designers, though. In fact, I'm very happy to see people honest enough to admit that they have no talent and/pr no guts to create something original, and instead do what they are told to do by the management.

The worse problem with the post is that I feel personally offended. The designer says that "adventure games that I think most old-school, hardcore, adventure game fans think they want." I don't think I want old-school adventure games. I know it. The designer is trying to belittle me by indicating that I don't know what I want. I know it very well, and judging from the success of Dreamcatcher's Adventure Company and freeware projects, I'm not the only one. Adventure games are back, and they still have a large enough fan base to be viable.

Still, I'm glad I know what the new Larry game will not be. This year, I've had fun with lots of real adventure games, be it Post Mortem, Dark Fall or Space Quest 0. There are others coming up soon, such as Syberia 2, Broken Sword 3 and others. I don't need to be spending my money on yet another game that hijacks a name of a great series to inflate its sales.
October 24, 2003 at 4:52 pm by Jozef

mp3.com woes
Professor Lessing has a very interesting piece on how mp3.com changed from an artist-friendly site to a corporate outlet that thinks the independent artists is their proprety. I found some very interesting music there previously, but haven't been there since the last site redesign that made my Opera crash. Note to myself: I should keep a tab on mp3.com and more importantly, the very interesting and promising Creative Commons.
August 8, 2003 at 2:57 pm by Jozef

People are bound to forget...
...which is why there's the For Future Reference section. I know people will forget again; they did so over and over again, and this story is becoming more tragic by the day, because of some people's selective memory (yes, that's right - I blame such people for the deaths on both sides), here it is once again:

Israel and Palestine are nearing a compromise to end the 31-month long war. As soon as they close on a deal, Palestinians launch a series of attacks to prevent such a deal. As of now, there were five such attacks, with numerous dead. Anybody who tells me that Palestinians want peace while Israel is the warmonger is an idiot and moron.
May 19, 2003 at 2:57 pm by Jozef

Let the conspiracy begin!
Today, the Supreme Court decided that it's not illegal for anti-abortion groups to coordinate violent actions against abortion clinics, under the federal extortion and racketeering laws. First of all, I wouldn't be too alarmed; there's enough other laws to catch them on. Second, this sets a precedent: from now on, it is legal to coordinate violent protest demonstration, and from now on it's legal for me to conspire on burning down the houses of the anti-abortionists. Among other things...
February 26, 2003 at 3:48 pm by Jozef

New York Times turns communist?
Looks like the regular part of my breakfast, The New York Times is turning communist. or at least corrupt capitalist. According to an article in The Capitalism Magazine, the parent company of the New York Times is forcibly acquiring an office building, in order to tear it down and build a new headquarters there. The parent company of the newspaper that preaches about freedom and more democracy has apparently bribed the NYC City Hall and the NY Supreme Court more than the current owner of the building. I'm looking forward to the celebratory article when the new headquarters open...
February 25, 2003 at 5:05 pm by Jozef

Saddam's biography
Here is a nice piece on Saddam's past life. While from time to time the author descends into supporting Iraqi invasion of Kuwait, overall it's an interesting read.
February 10, 2003 at 7:35 pm by Jozef

Greenpeace strikes again
According to a Greenpeace news story, 14 members of their organization have broken into a British port and occupied a few tanks, slated for transport to the Persian Gulf. Here's an excerpt:

At 08:00 am this morning, 14 of our volunteers entered Southampton's Marchwood Military Port and occupied tanks and jeeps queued up to be loaded on the roll-on/roll-off ferry Stena Shipper bound for the Gulf. Four of our volunteers, all women, evaded Ministry of Defence speedboats to reach the tanks via the quayside, while ten others cut a hole in the perimeter fence and reached the vehicles from the land.

Some activists are chained to the exterior of the vehicles, while others have climbed into tanks and secured the hatches behind them. We've also started to paint the 'No War' message down the sides of the military vehicles. Seven activists have already been arrested, four are still locked inside the tanks and two others are chained to them. Police are on the scene.

Caught in the act
Poor Mr. Kristof. He's been writing editorials for The New York Times for quite a while, but now he's been let down by his own newspaper. He's been so discredited by his coleagues, that I doubt people would ever believe him again. Just consider what he said in his latest editorial, where he asks why everybody hates the US. By trying to ward off any arguments that there are a few countries that don't hate the US, he belittles them by saying:

Sure, the Poles and Portuguese may still dance with us. But if there were an extra spot on the axis of evil, the world would vote us in. Somehow, in a year's time, we've become Iraq.

Reading this and comparing it with Mr. Kristof's dismissal of these countries, I finally got a good reason not to trust his opinions. True, he probably wrote the article before the nine countries signed a letter in support of the US, but as a journalist who is about to comment on Europe, he should have done his homework and guessed the mood in Europe better. I'll keep this for my future reference, if people ever ask me why it is that I don't buy what Mr. Kristof writes.
January 31, 2003 at 1:55 pm by Jozef