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The sluggish economy doesn't seem to be hurting the video-game market. U.S. sales of game hardware and software skyrocketed 57 percent in March compared to the year-ago period, according to the NPD Group.

The total for gaming hardware, software and accessories was $1.7 billion in March. Nintendo led the pack with its Wii console, according to NPD. Nintendo sold 720,000 Wiis, buoyed by the release of Super Smash Bros. Brawl, which sold 2.7 million copies.

“You'd never know that the U.S. economy was under distress by looking at the video-games industry sales figures,” NPD analyst Anita Frazier said.

Microsoft Returns to Number Two

Microsoft's Xbox regained the number-two position, bumping Sony's PlayStation 3 into the third spot in sales. Microsoft sold 262,000 Xbox 360s compared to Sony's 257,000 PS3 units, giving Redmond only a slight lead. Microsoft blamed its recently slowed sales on supply constraints.

“You have to give Microsoft a lot of credit here. Microsoft is losing the sales battle to Nintendo, but Microsoft is the hero product for third-party publishers,” said Michael Goodman, a video-game analyst at Yankee Group. “Despite the strength of Nintendo's installed base, Microsoft is increasingly becoming the platform of choice for publishers.”

Goodman pointed to Grand Theft Auto as an example. It's the same product on the PS3 and Xbox 360, but the 360 also offers online play with lots of bells and whistles, including exclusive downloadable content. It's a sign, he said, that publishers are recognizing the 360's importance.

“Think back to the previous generation and EA and Sony were best buds. They were joined at the hip. This time around Microsoft is getting the preferential treatment,” Goodman said. “Think back to Madden in the fall. Microsoft got a superior version because the frame rate was better on the 360 than it was on the PS3.”

Sony's Sluggish Sales

PS3 sales doubled over the year-ago period. Sony could see continued boosts over the next quarter with the release of games like “Metal Gear Solid 4″ and “Grand Turismo 5 Prologue.”

“Our sales momentum continues to defy what is traditionally a sluggish sales month,” Sony Computer Entertainment America Chief Executive Jack Tretton said. “It is proof that, in these economically challenging times, consumers recognize the long-term value of our platforms.”

Goodman said Sony can't be disappointed with its recent gains, but Sony is still a far way from Microsoft's numbers — hundreds of thousands of units behind. With Microsoft resolving supply constraints, Sony could see even more competition from the Xbox 360.

“To be successful, Microsoft doesn't necessarily have to be number one. It just needs to be number one to the publishers. There's a big difference there,” Goodman said. “You can expect a close race, at least in North America between Microsoft and Sony for that number two position.”

LUXEMBOURG (AFP) - EU justice ministers on Friday agreed to criminalise incitement of acts of terrorism, including using the Internet for recruiting purposes.

The 27 EU member states agreed to introduce as new offences “public provocation to commit a terrorist offence, recruitment, and training for terrorism” which would be punishable “also when committed through the Internet”.

“The amendment is well-balanced in terms of its effects on freedom of speech and general respect for human rights,” the justice ministers, meeting in Luxembourg, said in a joint statement.

Individuals “disseminating terrorist propaganda and bomb-making expertise through the Internet can therefore be prosecuted and sentenced to prison,” if that is deemed to be provocation to commit terrorist offences.

The new legislation “will make it easier for law enforcement authorities to get cooperation from Internet service providers, to prevent crimes and identify criminals,” the justice ministers said.

“It aims to equip our legal systems across the EU with the adequate tools to bring to justice the criminals who spread violent propaganda providing terrorism tactics and instructions on how to manufacture and use bombs or explosives to provoke others to commit terrorist acts.”

The EU's counter-terrorism coordinator Gilles de Kerchove said last week that some 5,000 Internet sites “contribute to radicalising young people in Europe”.

Germany has put forward a proposal to set up a Europol Internet surveillance committee to tackle the problem.

In the latest of a long line of data and storage-related buys, IBM said Friday it has acquired Diligent Technologies for an undisclosed sum.

Diligent, which has offices in Framingham, Massachusetts, and Tel Aviv, is known for its de-duplication technology, a technique for saving storage space by eliminating redundant data, such as multiple copies of the same e-mail attachment within an e-mail archive. The company's ProtecTIER product employs an in-line de-duplication engine that does the work as data is brought into a system, not after the fact, which saves time, according to Diligent's Web site.

Diligent's technologies and its workers will be brought under IBM's system storage business unit within the systems and technology group.

One observer questioned whether the Diligent deal could hurt players such as Hitachi Data Systems, given that it has been reselling ProtecTIER.

“Now that the IBM acquisition of Diligent Technology appears to be all but a done deal, where does that leave HDS and their customers, as HDS is now left without a viable de-duplication technology in one of the hottest sectors in data storage?” wrote Jerome Wendt, president and lead analyst of DCIG Inc., a consulting firm, on his blog.

The buy marks the third storage-related grab by IBM in just the past few months, following its moves to acquire XIV and FilesX. IBM, which posted strong second-quarter earnings on Wednesday, said the Diligent deal is also part of its planned earnings-per-share growth strategy.

De-duplication is seen as a hot trend within the storage space. The 451 Group last year predicted the market sector could grow to US$1 billion by 2009. The space includes a range of independents such as ExaGrid, along with major vendors like Symantec.

Oracle also features the capability in its flagship 11g database, and Sun Microsystems recently made a de-duplication announcement as well.

San Francisco - Bull has a gadget for businesses worried about the security of data stored on laptops: a bootable, portable password-protected hard disk drive with an embedded cryptographic processor that protects data if the device is

San Francisco - In the latest of a long line of data and storage-related buys, IBM said Friday it has acquired Diligent Technologies for an undisclosed sum.

Diligent, which has offices in Framingham, Mass., and Tel Aviv, is known for its de-duplication technology, a technique for saving storage space by eliminating redundant data, such as multiple copies of the same e-mail attachment within an e-mail archive. The company's ProtecTIER product employs an in-line de-duplication engine that does the work as data is brought into a system, not after the fact, which saves time, according to Diligent's Web site.

Diligent's technologies and its workers will be brought under IBM's system storage business unit within the systems and technology group.

One observer questioned whether the Diligent deal could hurt players such as Hitachi Data Systems, given that it has been reselling ProtecTIER.

“Now that the IBM acquisition of Diligent Technology appears to be all but a done deal, where does that leave HDS and their customers, as HDS is now left without a viable de-duplication technology in one of the hottest sectors in data storage?” wrote Jerome Wendt, president and lead analyst of DCIG, a consulting firm, on his blog.

The buy marks the third storage-related grab by IBM in just the past few months, following its moves to acquire XIV and FilesX. IBM, which posted strong second-quarter earnings on Wednesday, said the Diligent deal is also part of its planned earnings-per-share growth strategy.

De-duplication is seen as a hot trend within the storage space. The 451 Group last year predicted the market sector could grow to $1 billion by 2009. The space includes a range of independents such as ExaGrid, along with major vendors like Symantec.

Oracle also features the capability in its flagship 11g database, and Sun Microsystems recently made a de-duplication announcement as well.

NEW YORK - Video game publisher Electronic Arts Inc. on Friday extended by nearly a month its tender offer for Take-Two Interactive Software Inc. but also lowered the price it will pay for each share of the “Grand Theft Auto” maker.

EA’s offer will now expire on May 16 instead of 11:59 p.m. EDT Friday. As of Thursday, about 6.4 million shares of Take-Two had been tendered, representing roughly 8 percent of Take-Two’s outstanding shares.

EA said it extended the deadline to comply with a second request it received from the Federal Trade Commission for information about the proposed acquisition. It’s the second extension, the first came after Take-Two moved back the date of its annual shareholder meeting by a week.

EA has repeatedly said that timing was key for its offer — which was first made public Feb. 24 — because it wants to put its marketing muscle behind “Grand Theft Auto IV,” which goes on sale April 29. Take-Two, however, has called the timing “opportunistic” and has refused to sit down with EA until the day after GTA IV goes on sale.

Owen Mahoney, EA’s senior vice president of corporate development, said any further delays, whether it’s regulatory or on the part of Take-Two’s management, could affect the “value and certainty of the offer.”

EA’s bid for Take-Two is still valued at about $2 billion. The company said it adjusted the per-share price to $25.74 from $26 to reflect additional shares of restricted stock granted to Take-Two’s management. On Thursday, Take-Two shareholders granted ZelnickMedia, the company’s management, 1.5 million shares of restricted stock.

Redwood City, Calif.-based EA strongly objected to the stock grant to ZelnickMedia and said it did not reflect the views of shareholders.

That’s because Take-Two only allowed shareholders of record as of Feb. 19 to vote at the meeting. That was five days before EA’s offer went public, and analysts estimate that more than half of Take-Two’s shares have changed hands since.

Chairman Strauss Zelnick said the vote signaled a vote of confidence in Take-Two’s management.

“Take-Two’s board of directors has maintained from the beginning, and continues to believe, that EA’s proposal vastly undervalues our company,” he said. “It undervalued the company at $26 per share, and it certainly undervalues Take-Two at $25.74.”

Shares of New York-based Take-Two climbed 17 cents to $26.02 in morning trading. Redwood City, Calif.-based EA’s shares jumped $1.06, or 2.1 percent, to $52.52.

Bull has a gadget for businesses worried about the security of data stored on laptops: a bootable, portable password-protected hard disk drive with an embedded cryptographic processor that protects data if the device is lost or stolen.

Globull (pronounced globule) is a bright red package about the size and weight of an iPod Classic. It has a color display, houses a 60G-byte hard disk drive and has a USB 2.0 cable that wraps around the device for storage.

Plug it into any PC that can boot from an external USB 2.0 drive, switch on the computer, enter your password on Globull's tiny touch-sensitive display, and you have access to your regular working environment, applications and data. Switch off the computer again and you can take your data away without leaving a trace, according to Bull.

Most recent PCs have the ability to boot from an external USB (Universal Serial Bus) drive– although IT managers may have chosen to disable this option in the BIOS settings for security reasons: it's not always desirable if staff can boot up an operating system of their choice, bypassing antivirus or other security software installed on company PCs.

The 120-gram Globull package contains the hard disk and a cryptographic processor that scrambles data on the fly at 100M bps (bits per second), using the Advanced Encryption Standard with a 256-bit key (AES-256), protecting the data if the disk is lost or stolen. Without the password, the data cannot be decrypted.

Bull envisages a number of scenarios in which the drive could be useful to secure data: mobile workers with their own laptop; staff working on shared PCs, or for performing demonstrations on a client's computer. The company suggests installing a complete operating system– Windows or Linux– and applications on the device, but warns buyers to ensure that their existing software licenses allow such a use.

For now, Bull is offering the device only in France, but despite the defense-level encryption it contains, there's no legal reason why it can't be sold elsewhere, said company spokeswoman Anne Marie Jourdain: Bull just preferred to concentrate on France first, and an international launch is planned for the second half of the year, she said.

Globull has a price tag of ,460 (US$685), but the price is negotiable in quantity, Jourdain said.

Nokia posted a 25-percent uptick in its first-quarter profits, and reiterated its expectation that mobile handset unit shipments would rise by 10 percent globally this year.

“We had strong profitability, even with the seasonal drop in sales,” Nokia CEO Olli-Pekka Kallasvuo told investors. “The overall device market developed as expected, with the greatest demand in emerging markets, where our position is very strong.”

However, Nokia's $1.94 billion profit failed to live up to Wall Street expectations. Moreover, investors were less than pleased about certain aspects of the company's outlook for the remainder of this year.

Currency Woes

Kallasvuo attempted to downplay Nokia's expectation that the mobile device market would decline in value this year due to the negative impact of the recently weakened U.S. dollar. “In fact,” he said, “the market is expected to clearly grow in value terms on a constant currency basis, according to our estimates.”

Kallasvuo also noted a downside to the fact that the mobile market this year looks similar in many ways to 2007 — when industry growth was driven by sales in emerging markets such as India, China, Brazil and Africa. Because of this, Nokia expects to see some decline in industry-average selling prices this year, “primarily to reflect the increasing impact of the emerging markets, and competitive factors in general,” Kallasvuo explained.

For its part, tech research and advisory firm Gartner sees the looming recession in Western Europe and North America — together with increased food prices in emerging markets — possibly impacting the overall value of the mobile device market. “This means that in mature markets, consumers might be choosing mid-tier devices over high-end devices,” noted Carolina Milanesi, Gartner's research director.

“We were expecting replacement sales in emerging countries to famously impact average selling prices (ASPs), possibly offsetting the trend in mature markets,” Milanesi said. “The recent developments with food prices, however, might change things and negatively impact replacement sales, which the overall results of lowering ASPs and revenues more than anticipated,” she explained.

Milanesi also warned that Motorola — which is more dependent on the U.S. market — might suffer more from the dollar's slide than other players with stronger shares in other world regions. “Back in the fourth quarter, the U.S. was the only market where Motorola was able to still have a reasonable share,” she said.

Grabbing Market Share

According to Nokia's internal estimates, the handset-maker's global market share was up 3 points year-on-year at the end of the first quarter, and down by less than 1 percent sequentially. The company also predicted that its handset shipments during the quarter now under way would be up slightly on a sequential basis, and that its share of the global mobile device market would rise.

“We intend to take share in the second quarter, as we continue to benefit from our strong presence in the fastest-growing parts of the market,” Kallasvuo noted. “We also see signs of positive growth momentum in most of our key regions,” he said.

Milanesi said Kallasvuo's predictions were in line with Gartner's own expectations. “We do expect the second quarter to be marginally up over the first, as normal seasonality calls for, and we expect Nokia to continue to grow market share,” she observed.

Though Nokia will not be shipping any major new models in the current quarter, Kallasvuo is not concerned. “We expect a number of new products to have a positive impact on our results in the second half of 2008,” he said.

LUXEMBOURG (Reuters) - EU states agreed on Friday on tight laws against incitement to terrorism in order to clamp down on militant groups' use of the Internet.

EU justice and interior ministers also agreed in Luxembourg on an action plan to try to stop groups getting explosives.

Police say the Internet has taken on huge importance for militants, enabling them to share know-how, plan operations and spread propaganda to a mass audience.

“The Internet is used to inspire and mobilize local terrorists … functioning as a virtual training camp,” a text agreed by ministers said.

“Each member state shall take the necessary measures to ensure that terrorist-linked offences include … public provocation to commit a terrorist offence, recruitment for terrorism, training for terrorism.”

States may also consider attempts to train and recruit as terrorist offences, but are not obliged to do so, an EU official said.

Spain's secretary of state for justice, Julio Perez Hernandez, welcomed the move.

“The battle to anticipate (terrorist acts) is crucial for Spain,” he told reporters. “One should not wait for smoke to know there is terrorism.”

In an effort to assuage civil rights campaigners, the law says that the new measure may not be used to restrict freedom of expression and freedom of the press.

Before entering into force, the law still needs to be confirmed by ministers after a number of national parliaments have discussed it.

A European Commission official said countries like Spain and Italy already punish public provocation to terrorism but others, like Scandinavian countries, would have to change their legislation to apply the new EU text.

Under the plan to enhance the security of explosives, ministers agreed to establish an early-warning system on stolen explosives and detonators by the end of the year.

They also agreed to create by the year-end a “European Bomb Data System” that would give police and governments permanent access to information on incidents involving explosive devices.

(Reporting by Ingrid Melander; Editing by David Brunnstrom and Richard Meares)

NEW YORK - Led by stellar sales of Nintendo’s games and systems, U.S. retail sales of video games jumped 57 percent to $1.7 billion in March, market researcher NPD Group reported Thursday.

“You’d never know that the U.S. economy was under distress by looking at the video games industry sales figures,” said NPD analyst Anita Frazier in an e-mail.

Video game software sales jumped 63 percent from March 2007 to $945.6 million, blowing past analysts’ expectations. Wedbush Morgan’s Michael Pachter, for one, had expected game software sales to grow 47 percent over last year.

Nintendo’s “Super Smash Bros: Brawl” for the Wii was the month’s top-selling game with 2.7 million units sold.

Coming in a distant second was “Tom Clancy’s Rainbow Six: Vegas 2″ from Ubisoft with 752,300 units and “Army of Two” from Electronic Arts Inc. with 606,100. All three games hit store shelves in March.

Hardware sales grew 46 percent to $551.3 million from $377.9 million, with Nintendo’s Wii and portable DS far outselling every other system. The Japanese company grabbed 58 percent of the game hardware market during the month as Wii shortages seemed to abate.

Americans bought 721,000 Wiis during the month, 67 percent more than in February. The DS was the second best-selling system with 698,000 units, and Sony Corp.’s handheld PSP came in a distant third with 297,000.

Game accessories, at times an overlooked category, reaped in $220 million, up 58 percent from a year earlier. Xbox Live points and subscription cards were among the top-selling accessories in March, along with the PS3 wireless controller, Frazier said.

“Grand Theft Auto IV,” one of the year’s most highly anticipated games, goes on sale April 29 and should boost sales of both Microsoft’s Xbox 360 and the PS3. Microsoft said some “key” U.S. retailers were still experiencing Xbox 360 shortages going into March, but by the time GTA IV launches shelves should be fully stocked.