The success of Activision Blizzard’s new Call of Duty game for China will hang on its localised production, according to its chief executive.

Bobby Kotick was speaking from China to the FT after Tuesday’s announcement in Shanghai of a partnership with online gaming provider Tencent to bring the world’s biggest video game franchise to the market. Read more

The video game industry looked to the razzle-dazzle of its annual trade show in Los Angeles this week to lift it out of depression and E3, in part, delivered.

Sales have been suffering as interest has waned in the current generation of consoles, now seven years old, but Nintendo showed more than 20 games that would feature on its innovative Wii U console, due to launch later this year. Read more

Sony was the only console maker to unveil new hardware of any significance at the video game industry’s E3 trade show in Los Angeles this week.

However, the Wonderbook is the most natural looking peripheral you can imagine – it looks just like a real book but works with an Eye camera and Move controller to conjure augmented-reality 3D images from its pages. . It will go on sale later this year for $40 bundled with its first title, Book of Spells, an original work from Harry Potter author J.K. Rowling.

In an interview at E3, Andy House, president of Sony Computer Entertainment, told me how the Wonderbook came about. Highlights after the jump. Read more

Wii U

Faced with growing competition from smartphones, smart TVs and tablets, console makers at the annual E3 video game show this week demonstrated they were upping the ante in the form of second-screen accompaniments to their devices. Sony also announced a spellbinding innovation in console-linked eBooks.

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While the giant screens showing forthcoming blockbusters from video game publishers and console makers still dominated this week’s E3 trade show, it was their response to the challenge from much smaller screens that was more striking.

Consumers are increasingly seduced by the experiences that growing social, mobile and cloud gaming companies – camped out on the show floor’s periphery – offer to users on smartphones, tablets and smart TVs.

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Satoru Iwata, Nintendo’s chief executive, did not make his usual appearance at his company’s E3 press conference on Tuesday, preferring instead to tweet backstage about the announcements as he explores social media ahead of the launch of Nintendo’s Miiverse social service for its gamers.

But in an FT interview shortly afterwards, he talked in person about his hopes for the Wii U, the new console launching this holiday season, the concept of asymmetrical gaming it introduces and the early attempts by rivals to match its features. Highlights after the jump: Read more

Microsoft has announced Xbox SmartGlass, a new way of transferring content from smartphones and tablets to a TV, using its home console.

When movies and other media are moved to the TV, the phone or tablet becomes a second screen on the couch, offering more information on what is being shown. Microsoft also announced the long-awaited introduction of its Internet Explorer browser to Xbox, tight integration with devices running the new Windows 8 operating system and a revamped music service. Details from its press conference on the eve of the E3 video game convention in Los Angeles are after the jump. Read more

Funding Circle, a UK-based online marketplace where individuals lend directly to small businesses raised $16m of Series B financing from joint investors Index Ventures and US-based Union Square Ventures. This brings the total amount raised by the company to $21m.  Launched in August 2010, the company now facilitates around £1m in loans each week. The company is planning to use the funds to double its staff over the next year.

Dragonplay, a Tel Aviv-based games developer raised $14m in a Series A funding from Accel Partners.  Dragonplay specializes in makes card, casino and board games for smartphones and social networks and is best known for Live Holdem Poker Pro, which has more than 2m monthly active players.  The company will use the investment to expand its portfolio of games. Read more

Electronic Arts has criticised its social gaming rival Zynga for paying high prices for “instant one-hit wonders” that give it a “temporary lead” in the charts.

John Riccitiello, chief executive, also used EA’s quarterly earnings call with analysts on Monday to argue the success of EA’s own digital and social strategy, defend falling subscriber numbers for its Star Wars online game and announce a big investment in next-generation console games. Details after the jump. Read more

This week’s launch of Angry Birds Space has propelled the mobile game’s Finnish developer, Rovio, into the stratosphere, instantly topping app store download charts around the world.

But whereas the original Angry Birds was a viral hit, notching up hundreds of millions of downloads with minimal marketing, this latest update landed in a marketing blitz more akin to a Disney blockbuster than a 99 cents mobile phone app.

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Although Angry Birds, by Rovio of Finland, is the best-known videogame to come out of Scandinavia, it has a close rival in Sweden’s Minecraft - a game Sean Parker loved so much he flew all its developers to London for a party. Read more

Is Zynga hopelessly exposed to the hit-driven nature of the games business, or do its scale and business model give it a sustainable competitive edge?

Depending on your point of view, its acquisition on Wednesday of OMGPOP, maker of the red-hot game Draw Something, could be used to support either side of this argument. Read more

It’s nice to see social gaming companies being sociable with one another – employees of Wooga, the third largest on Facebook, were mingling happily at Zynga’s headquarters on Wednesday night during its Happy Hour as part of the 2012 Game Developers Conference, being held here in San Francisco this week.

Mark Pincus, Zynga chief executive, held an off-the-record dinner with we the media in another part of this rented building, which Zynga said on Monday it would now buy for $228m. I had on-the-record chats with Zynga’s three closest rivals Electronic Arts, Wooga and on the fringes of GDC, with’s CEO revealing its plans to join Zynga in going public. Highlights from those conversations after the jump. Read more

Thanks to a hint about Apple’s TV plans that Steve Jobs dropped to biographer Walter Isaacson, all eyes have been fixed on the revolution that may soon come to the dominant living room screen.

But a flurry of activity is already bringing big changes to the TV experience through “second screens” – and the $20m that has now been raised by Scott McNealy’s start-up WayIn is evidence that investors are paying attention.  Read more

For anyone seeking holes in Activision’s seemingly bulletproof Call of Duty franchise, there was a chink in the armour exposed in NPD US January sales figures released late on Thursday.

Sales fell nearly 50 per cent year-on-year for the world’s best-selling video game in 2011 – that’s comparing the performance of the latest in the franchise – Modern Warfare 3 – with its predecessor, Black Ops.

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Two trends clear in Facebook’s IPO filing on Wednesday were the inexorable rise in importance of digital-based gaming revenues and the growth in mobile – we learned Zynga was a key revenue-generator for Facebook and half of Facebook’s members were now users of its mobile products .

Earnings and data from Electronic Arts, THQ and Japan’s Gree over the past 24 hours further emphasise that the old order of disc-based console gaming will have a declining share of consumers’ attention, as consoles become more general entertainment boxes and smartphones and tablets proliferate. Read more

Nintendo was demonstrating its forthcoming Wii U next-generation console and Sony its PlayStation Vita handheld at CES in Vegas this week and they cannot come soon enough for the video game industry.

Cowen and Company analysts, mulling December’s NPD-collated US sales figures on Friday, described them as a Wii-saster, with a 42 per cent fall in Wii software dollar-sales year-on-year contributing to a 21 per cent overall industry decline in hardware, packaged software and accessory sales. Read more

The social gaming leader Zynga has lured away another top Electronic Arts executive, hiring Barry Cottle (pictured) as head of business development.

The news represents a blow to EA, which lost its chief operating officer John Schappert last April when he took up the same position at Zynga. Mr Cottle was head of Interactive at EA, covering the mobile and social gaming areas where EA is in direct competition with Zynga. Read more

Tech news from around the web:

Microsoft, a 20-year stalwart of the annual Consumer Electronics Show in Las Vegas, has decided to pull out of the event after the 2012 show in January, the Los Angeles Times reports. The company, whose keynote address has been one of the main highlights of the show, said it felt that it would be better to make announcements on its own time. Read more

Zynga employees showed up for work in their hundreds at least three hours early on Friday – encouragement perhaps for all its new shareholders on its opening day on the market that the social gaming company is already working hard to provide a return on their investment.

However, the 5am start was more of an excuse to celebrate Zynga’s IPO – the Nasdaq had moved its “opening bell” button for the start of trading to Zynga HQ – the first time it had come to San Francisco for such a ceremony. Read more