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Blizzard Expands HQ, Others Follow Online Game Lead

Blizzard Entertainment Corp. is starting to resemble the old Interplay Entertainment Corp., the Irvine game maker that once ruled the cottage video game industry in Orange County.

The growth of the two is remarkably similar. But Interplay since has slipped into trouble, due to many missteps in the past several years.

Blizzard, on the other hand, recently detailed plans to boost the size of its Irvine headquarters. Company officials plan to combine Blizzard’s Northern California computer games unit with its Irvine studio, which mainly focuses on games for video game consoles such as Sony Corp.’s PlayStation.

Blizzard’s studio in San Mateo has 50 workers. The company plans to move those who want to come south. Blizzard employs about 600 in Irvine.

“We’re looking forward to having our PC development teams together in Irvine,” said Mike Morhaime, Blizzard’s president and cofounder. “In addition to improving our efficiency as a company, the relocation also represents an opportunity for all of our teams to have regular, direct input on each other’s projects.”

In May, Blizzard bought Swingin’ Ape Studios Inc., an Aliso Viejo-based game company Blizzard hired earlier to help develop a highly anticipated game.

Swingin’ Ape became part of Blizzard’s console team with Steve Ranck, Swingin’ Ape’s president and cofounder, becoming vice president of console development at Blizzard, reporting to Morhaime.

So why the consolidation in Irvine?

It could be to fill some of the open positions with the company. There are 50 positions posted on Blizzard’s Web site, up from 40 a few months ago.

Blizzard is in the throes of operating “World of Warcraft,” the company’s entry into the so-called “massively multiplayer game” market. In these games, players face off against each other via the Internet.

Other OC game companies are looking to get in on the action. Interplay is hoping to do a massively multiplayer game for its “Fallout” series. And InXile Entertainment Inc., the Newport Beach game maker from Interplay founder Brian Fargo, is looking to develop a massively multiplayer game.

But “World of Warcraft” looks to be in a league of its own. It sold 240,000 copies of the game in its first 24 hours of release in November and has been hot since. In June, Blizzard said it reached the 2 million-subscriber mark.

Thanks in part to the game, Blizzard is the star performer of struggling parent Los Angeles-based Vivendi Universal Games Inc., itself part of France’s Vivendi Universal SA. Blizzard’s Irvine design studio was spared in Vivendi’s latest round of layoffs last summer. The Business Journal estimates Blizzard’s yearly sales at $300 million, which puts it among the largest software makers in OC.


WiSpry’s Change of Address

Chip designer WiSpry Inc. is moving to another Irvine office, the company said recently. The new facility is 7,000 square feet and will house 20 people.

“The new location is centrally located in Orange County, with easy access for employees and customers from two major highways and is ideally located to attract the top talent that Orange County has to offer,” said Jeff Hilbert, chief executive and cofounder of WiSpry.

The maker of radio frequency components and modules for wireless phones raised $6 million in a first round of venture financing earlier this year.

South San Francisco’s Blueprint Ventures Partners led the round, which included investments from Roseville-based American River Ventures and San Diego-based Shepherd Ventures.

Its products are designed for wireless phones, handheld computers and game controllers. Wispry was formed in 2002 in a split off of the radio frequency and wireless business unit of Austin, Texas-based Coventor Inc.


M-Flex Fine?

Forget the dim outlook issued in May for Multi-Fineline Electronix Inc.

The Anaheim-based company recently said sales for the quarter ended June 30 rose 18% to $84.4 million versus a year earlier. Operating profit in the quarter fell 7% to $11.2 million. But net profit rose 1% to $8.8 million. Analysts had forecasted $7.5 million in net profit.

In May, the company lowered expectations for the quarter, telling investors it expected to post net profit of $7 million to $9 million in its third quarter on sales of $78 million to $85 million. Shares of the stock fell 26% on the news.

Since the recent financial report, shares have jumped roughly 20%. The quarter was a nice surprise for analysts.

M-Flex posted 17% growth in revenue from the wireless sector, including a 13% increase in sales to the company’s largest wireless phone customer, Motorola Inc.

The company’s non-wireless sales grew 25% in the period, including to makers of personal digital assistants, medical devices and electronic data storage gear.

While sales to wireless phone makers helped to drive the quarter, the profit decline was due to pricing pressure. And when you hear pricing pressure in the circuit board industry, you know there could be trouble.

In the past year and a half, circuit board makers such as M-Flex, TTM Technologies Inc. of Santa Ana and DDi Corp. of Anaheim have seen surging demand that’s strained capacity and driven normally slim profits higher.

But now, circuit board makers are seeing profits squeezed, as more capacity is available than demand requires.

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