Microsoft intends to radically increase the cash flow it generates from games. There will be no backward compatibility (meaning Xbox 360 games won’t work on the latest console, forcing Xbox One buyers to buy new games) and games will be tied to user profiles (meaning you have to pay a fee to Microsoft to play a game, so borrowing from friends or picking up cheap second hand versions is a thing of the past). The reason? Consoles are bad economics.

“The Red Eye of Death”, Microsoft’s worthy successor to its infamous
blue screen, has the same colour as the company’s numbers.
Source: Wikipedia.

The (old) advantage consoles had over PC’s was the price. Besides being cheaper than game-worthy desktop computers, consoles don’t need regular hardware updates to be able to play the newest releases. The reason for this is that consoles are actually sold at a loss, at a cost of between USD 70-130 per console for Xbox 360 and USD 18-36 for PlayStation 3. How do console-makers make their money, then?

According to their business model, they make money through software licenses. Console makers get a fee for every produced/sold game but struggle to make up for incurred costs, which include R&D on top of the expensive hardware of the actual machine. Microsoft recorded USD 3bn in accumulated losses for its gaming division the past 10 years and Sony’s PlayStation division posted a USD 2.8bn loss in 2012 alone. Microsoft’s solution: reorienting Xbox towards other media uses (mostly TV) and trying to increase payments from gamers. The huge margin retailers of second hand games get has always been a thorn in the eye of developers, and to avoid the eighth generation console becoming the last of the species, some money has to be siphoned off from the second hand market to sustain the developing side. The big question is if Sony is strong enough to not make the same decision and thus gain an edge over Microsoft in selling its new console. We will find out at the launch of PlayStation 4 later this year.

The presentation of PlayStation 4. A backdrop is all we got to see.
© 2013 Sony Computer Entertainment Europe, via PlayStation.com

Investors have never been impressed with gaming. Microsoft’s share price never recovered from the popping of the dotcom bubble, as their ventures into new media such as gaming and mobile technology (grouped under “Entertainment and Devices”) fail to generate the same profits as its competitors Apple, Samsung and Google. Sony’s picture looks even bleaker: it lost 80% of its stock market value since 2000 and its share price is back at the level of the 80’s. Microsoft’s latest Windows-update, Windows 8, has been coldly received and with CEO Steve Ballmer’s neck on the line it has made the rare move of backtracking on some of its innovations. However, unless the behemoths of the 90’s succeed in reorienting their output towards current demands, it won’t take strong activist shareholders to slay them.

Windows 8 pro’s and con’s. Mainly cons, or so we heard from analysts.
Our version 7 works just fine, thank you.
© Financial Times, via ft.com.

Peer Steinbrück, the Social Democratic Party’s candidate to challenge German Chancellor Angela Merkel in a general election this fall, was engulfed in controversy some weeks ago, after it emerged that he made more than one million Euros in speaking fees since stepping down as finance minister in 2009. Mr Steinbrück is also of the opinion that the chancellor’s job should be rewarded with a higher salary than the current combined total of almost 300,000 Euros a year. In France, former President Nicolas Sarkozy was completely honest in the way that we’re used to from him: after losing his re-election bid, he claimed it was time “to make money”. President “Bling-Bling” is having a slightly rocky road to riches though, when, never shy to speak his mind, he insulted a room full of Jewish businessmen over the Middle Eastern crisis for a flat fee of GBP 128,000.

Nicolas Sarkozy, making rain. © Reuters

In the ten years after he left the White House, Bill Clinton made $75 million in speaking fees, delivering a total of 417 paid speeches at an average of $181,000 per event. It’s not all about the man himself, though. Gaining prominence as a major do-gooder, President Clinton’s nonpartisan Global Initiative has raised $73.1 billion in commitments from major philanthropists, CEOs and heads of state to fund charitable action around the globe. Also, paying off debts from his wife’s failed Presidential campaign put a dent in the couple’s finances. Hillary herself is expected to start fetching 6-figure fees herself now that she’s stepped down as Foreign Secretary. Whether or not to finance her next Presidential bid, only time will tell.

Bill Clinton: enter the big Kahuna.
© Drew Angerer, via Standaard.be

Tony Blair, former British Prime Minister and Thatcher’s greatest achievement (according to the late Right Honourable Baroness herself), landed himself a $1m a year advisory position at JPMorgan Chase, in addition to links with other financial institutions and acting as a middle man for various Asian and Middle Eastern interests. He commands speaker fees of up to £250k per event and operates a boutique advisory service to sovereign wealth funds as well as Tony Blair Associates, which provides strategic advice on political and economic trends and governmental reform to various Arabic governments and business interests. All his activities have earned him more than GBP 60m, not including the GBP 5m for his book deal, which he donated to a sports centre for injured soldiers.

Tony Blair: the invoice is in the post.
©Jillian Edelstein, via The Financial Times.

The bickering brothers of the UK Labour party, Ed and David Miliband, offer an interesting opportunity to see what the perfect time is to cash in in the private sector. After being edged out/stabbed in the back for the Labour leadership in 2010 (depending on the point of view: Ed’s or the other one) and a reduced role in Parliament, David Miliband announced his stepping down as MP earlier this year to take up a £300k per year positions as Head of International Rescue Committee, a humanitarian charity in New York. Already earning about £1m on top of his MP’s salary since 2010, thanks to advisory roles at VantagePoint Capital Partners (California), Oxford Analytica (UK) Indus Basin Holdings (Pakistan), Sir Bani Yas academic forum (United Arab Emirates) and a Board Membership at Sunderland Football Club, David has a good head start before his brother can commence commanding speaker fees worthy of a senior Statesman.

David Miliband: as close as he’ll ever get to No 10. For now…
© PA, via The Telegraph

Paul Allen and Burt Rutan’s SpaceShipOne.
©Win McNamee/Getty Images, via seattlepi.com (Hearst Communications Inc).

Last year, the SpaceX Dragon capsule became the first private spacecraft to dock into the International Space Station (ISS). The company, which was founded by Paypal co-founder Elon Musk, is not resting on its laurels though: SpaceX intends to send a cargo flight to Mars in 2016 as a first step in its colonization project which aims to ship the first human colonists to the red planet in 2023.

If you are not looking for quasi-permanent residence in the great beyond, several other prominent individuals have been pouring time, money and other resources in the development of commercial spaceflight. Sir Richard Branson founded Virgin Galactic after buying Paul Allen and Burt Rutan’s SpaceShipOne’s technology following the aforementioned first private launch success. Sir Branson’s project will offer customers a flight into space where they can experience a couple of minutes of weightlessness before starting the descent back to Earth. However, at $200,000 a pop it makes for quite a steep price for an afternoon of floating fun.

Virgin Galactic: aiming to go slightly higher next time.
© 2009-2013 Virgin Galactic.

Sir Richard Branson, billionaire, businessman, space cadet.
©AFP, via yahoo.ca

Despite all these positive developments, all is not well in the space department though: the list of possible medical complications arising from human spaceflight is both endless and impressive: loss of muscle and bone mass, blindness, Alzheimer’s Disease, decompression sickness… a hypochondriac better think twice before giving NASA a call. In addition, space radiation greatly increases the risk of infertility, even with protective gear, which pretty much rules out any kind of romance involving the sirens of Titan.

Lookin’ up from down here. ©Joson Images, via ft.com

Luckily, there are plenty of safer options to enjoy the stars on a reasonable budget and allow for a return to civilization with a clean bill of health. At several spots around the world, tourism revolving around skygazing at night is greatly developing thanks to the internet. Specialized websites keep calendars and schedules for great skywatching events and more and more tour companies have started offering mixed tours, with a day trip to interesting sites on the ground (for instance safari in Africa or architecture at archaeological sites) and at night a stay at a location with a great view of constellations from a distant past.

 
Alisher Usmanov and Roman Abramovich having a private London derby.
© REUTERS, via The Telegraph.

Contrary to his compatriot Mr Usmanov, Mr Mikhail Prokhorov decided to try his hand at an NBA-team instead of a Premier League club. Well over 2 meters tall himself, the Russian became the first non-American owner of an NBA-team, having been owner of the New Jersey Nets since 2010. His tenure saw the team move from New Jersey to New York and a name change to Brooklyn Nets, related in no small part to the active involvement of Brooklyn-born rapper and minority shareholder Jay-Z. Sportive performance has been abysmal, with winning percentages of 14.6%, 29.3% and 33.3% in the last three years, failing to qualify for the playoffs. Regardless, according to Forbes, the value of the team has soared 48% during 2012, making the Nets the 9th most valuable team in the NBA, at USD 530m.

Jay-Z and the Brooklyn Nets. So far the team remains a sportive diamond in the rough.
©2013 Popdust Inc., via popdust.com

As reported last year in this publication, outside of India Mr Mukesh Ambani is mostly (in)famous for building the most expensive/expansive house in the world (in the process slightly losing sight of the aesthetic side of the project), but the Chairman and CEO of the Indian conglomerate Reliance Industries Limited also has a knack for sports. And when you say sports in India, this can only mean cricket. In 2008 his company bought Mumbai Indians in a deal worth the equivalent of USD 124m. Success has been rather limited, with one victory in the Champions League Twenty20 and one second place in the Indian Premier League.

Mukesh Ambani cheering on his Mumbai Indians.
© 2013 HT Media Limited, via hindustantimes.com

The family of Mr Ambani’s fellow countryman Lakshmi Mittal appeared to have scored a far better deal for their stake in Queens Park Rangers Football Club. Acquiring 20% in the club for just GBP 0.2m in 2007, the family increased their stake to 27% over the years. Since winning the 2010–11 Football League Championship, the club plays in the Premier League, arguably the most prestigious league in the world, but are struggling to keep up with the pace. From a business point of view the news is not good either, despite the small initial investment: the club has posted an operating loss in every season since 2005.

Now, tell us what you think about wealthy foreign investors buying into sports teams.

Map data © Google

By the time the 70s arrived, the area was mostly known for its semi-conductor industry which attracted computer and hardware companies. In 1980, the IPO of Apple Computer created more millionaires (around 300) than any other company in history. During the 80s and 90s, software development and IT boomed, creating billionaires such as Larry Page and Sergey Brin (Google), and Jerry Yang and David Filo (Yahoo).

In other countries, attempts were made to try to emulate this success by shaping government policy in ways that would attract technological investments to certain areas. Notable examples from around the world are Silicon Wadi (Israel), Cwm Silicon (Wales), Silicon Sloboda (Moscow), Silicon Savannah (Kenya) and Silicon Welly New Zealand.

Silicon Roundabout, London: more dynamic looking than sounding.
© Jeff Blackler/Rex Features, via The Guardian

Closer to home, the less than inspired name of London’s “Silicon Roundabout” springs to mind, which has brought us start-ups like TweetDeck, Dopplr and Last.fm, acquired by Twitter (for GBP 30m, in 2011), Nokia (for GBP 20m, in 2009) and CBS (for GBP 140m, in 2007) respectively. Respectable amounts, but far behind the sums being paid for Californian start-ups. This is evident in that most of the members of the Sunday Times’ top 10 of the Social Media Millionaires only moved to the UK after founding their business. For instance, Michael and Xochi Birch founded their social networking site Bebo, the sixth most popular site overall in the UK which was bought by AOL for USD 850m in 2008, in their home in sunny San Francisco.

© Copyright 2011 Bebo

Lack of funding and exit possibilities are often mentioned sores for tech start-ups in Europe. The European common market might be a political dream, for small technology businesses liquidity remains illiquid. And when infinite pools of venture capital or IPO subscribers gleam over the horizon, who wouldn’t dream of californication?

We’ll start the year by having a little look at one of the most influential category of UNWIs: the Saudi billionaires. Let’s see what those folks have been up to…

According to the online newspaper Al Arabiya News, the world counts four Saudis among its top 200 billionaires whose net worth totals $2.7 trillion. Prince Alwaleed bin Talal Al Saud, CEO of Kingdom Holding company, topped the Forbes rich list of Saudi billionaires, with $18 billion, ranking 29th in the world.

source: http://apninews.com

The Prince, 57 years old, is the richest man in the Middle East and a nephew of the king of Saudi Arabia. His fortune is based in Middle East real estate, mostly in Saudi Arabia, and his Kingdom Holding investment vehicle which has had long-term stakes in Citibank ($950 million), News Corp. and Apple. He bought $300 million of Twitter in December.  He also owns luxury hotels like The Savoy in London, the Fairmont in San Francisco, the Plaza in New York and the Four Seasons.

As a new year treat, Mr. Alwaleed Talal al-Saud spent $500 Million on the “Flying Palace“, a custom Airbus A380 with impressive basic features:

- Parking space for his Rolls Royce
- Concert hall with grand piano, seating for 10 and stage for private entertainment
- Marble tiled steam room with spa treatments
- Five master bedroom with king sized beds, private bathrooms and showers
- A prayer room with computer monitored prayer mats that automatically adjust to face Mecca

source: thefastbabe.com

source: alfaisal.edu

Mohammed al-Amoudi, active in the energy field, is second among Saudis, with $12.5 billion  ranking 61st among the world’s wealthiest. Born in Ethiopia to a Yemeni father but raised in Saudi Arabia, he is one of the largest foreign investors in Sweden and North Africa. He is in oil, mining, agriculture, hotels, hospitals, finance and real estate, mostly through his operating companies Corral Group and Midroc Group. He also bankrolls the national soccer team in Ethiopia. This year, he has been investing in different charities to satisfy his strong interest for philanthropy.

source: arabianbusiness.com

The third Saudi billionaire is Mohamed bin Issa Al Jaber,  ranking 133rd, with a wealth estimated at $7bn. He owns real-estate, oil and food companies throughout the world. His empire includes Jadawel International, JJW Hotels & Resorts, and the AJWA Group, one of the largest food companies in the Middle East. It also includes Continentoil, and oilfield services and management company with offices in the U.S. and U.K.

He was awarded a Honorary Fellowship by UCL (University College London) on 3rd September 2012 and previously engaged himself in the work of UNESCO – as special envoy for Education, Human Rights, Tolerance and Culture – and for the UN as  spokesperson for Global Forums and Reinventing Government.

source: timesofummah.com

Sulaiman Bin Abdul Aziz Al-Rajhi, chairman of Al-Rajhi bank, international is the last Saudi on the list with $ 5.9 billion, and ranking 169th.
Alongside his brother, he began his business by changing money for pilgrims taking camel caravans across the desert to the cities of Mecca and Medina. Today, Al Rajhi Bank is one of the largest joint stock companies in the Middle East.

Let’s hope 2013 will be as prosperous as 2012!

source: leportaildesantiquaires.com

Dear readers, Wealthmonitor wishes you and your family a Merry Christmas. We hope you’ll enjoy reading about the extravagant gifts some of the world’s wealthiest are going to offer their loved ones in a couple of hours.

Christmas is supposed to be a magical time of year, when every one of us shows our love to family and friends. The wealthy may show love in expensive ways and show their appreciation by spending crazily on funky Christmas gifts.

With the Average American Parents Spending $271 on Christmas gifts per child last year,  Tom Cruise’s gift to his little princess Suri went a bit over the top as he spent $130,000 worth of diamond earrings and designer dresses. Other couples like Jay-Z and Beyonce wisely offered to one of their child a solid gold rocking horse worth $1.5 million.

source: allhiphop.com

Mike Tyson bought his ex-wife a $2 million bathtub one year while Paris Hilton bought herself an extravagant $285,000 pink Bentley Continental GT with a diamond-encrusted dashboard.

One of the trendiest gifts HNWIs would offer is a trip to space. Ashton Kutcher, Brad Pitt, and Tom Hanks are among those who have put down deposits for Virgin Galactic’s trips, which start at a cost of $200,000.

Other gifts HNWIs might get this Christmas include for ladies, a Neiman Marcus charm bracelet priced around $250,000 or for PC fanatics, the Zana Design Apophis. The USB drive is worth £2,000 and made of 200-year-old African Black Wood, 18-carat gold and a meteorite.

source: squidoo.com

Some HNWIs on the other hand remember that Christmas is not all about consumerism and will shop less than usual this winter! According to a survey of Millionaire Corner, 8 per cent of millionaires plan on spending less than last year as 29 per cent indicate the holidays are “too commercialized and should not be about gifts”.

source: abduzeedo.com

We’re experiencing a sudden drop in temperature in London at the moment, so to help us get in the mood for the winter season, let’s take a look at the winter activities some of the individuals tracked by wealthmonitor enjoy. Many of the HNWIs in our database have a keen interest in sliding down the slopes. Some of them simply enjoy mountain biking and skiing as their main hobbies, like a very casual director from the Swedish Information Infrastructure Management Group Nordic AB, in contrast to a slightly more competitive director from Heineken N.V. who participated in the 1972 Olympic Winter Games as luger.

The weather forecasts are announcing a new record year of snowfall for the 2013 season, wealthmonitor predicts that our wealthy shareholders will be jetting off very shortly to one the following luxury ski resort:

The Courchevel resort in France boasts two Michelin starred restaurants and is the place to be for the European elite. Expect even more rich holidaymakers to be present at the resort this winter as newly built suites are being inaugurated at hotel Le Cheval Blanc. The suites not only offer a hammam shower with chromotherapy features but also brings the latest technology, enabling hosts to operate the sound system, lighting and television from their iPad.

St Moritz, in Switzerland is the place to be for the young and fun-seeking HNWIs who wish to race their horses on the frozen lake, or even try their hand at skijoring (skiing dragged behind horses on the lake at high speeds).

source: gopackup.com

Whistler, in Canada where bowl skiing is a popular pastime. Hollywood stars including Tom Cruise, Hugh Jackman and Heidi Klum are likely to enjoy once more this year the unbroken snow as they heli-ski.

The Tirolean “Ski Jewel” in Austria. The new resort is set to open on 14^th of December. Expect to meet daring and sporty wealthy businessmen who will be taking a break from the office routine by dangerously sliding down the 90 miles of piste available.

source: ifyouski.com

On Tuesday night, the internally flawless 76-carat Archduke Joseph diamond from India’s Golconda mines was sold at Christie’s auction in Geneva for a record price of $21.5 million. Less than 24 hours later, the London luxury jeweller Laurence Graff bought a flawless deep-blue diamond for $10.86 million yesterday night at Sotheby’s.  The jeweller paid more than twice the gem’s pre-sale estimate and broke the world record price paid for a blue diamond per carat at the same time.

Why diamonds fascinate us so much? Putting aside their association with love, romance and glamour, the answer is simple: they are remarkably rare. This is due both to the fact that they require unique conditions to be created and that the strength of their chemical makeup maintains their sharp edges and corners almost eternally when most other stones suffer breaks, giving its full meaning to the expression “diamonds are forever”.

The wealthiest use diamonds for various purposes: some express their style by wearing dazzling dresses like the 50 two carat black diamond gown sewed by the British designer Debbie Wingham while others stick to the more old-fashion ring tailoring business.

Wealthmonitor gathered a list of the top 5 most expensive diamonds in history:

Coming first, the priceless Koh-I-Noor which is India’s most famous diamond and now a part of British crown jewel.

source: primestyle.com

The Sancy Diamond is not valued at any price either and believed to be of Indian origin; you can admire it at Apollo Gallery of the Louvre Museum located in France.

source: mostexpensivediamond.org

The Cullinan Diamond also known as the Star of Africa with an estimate of$400m is also part of British crown jewels.

source: diamondrocks.co.uk

The Hope Diamond, priced at $350m is placed for Smithsonian Museum of Natural History located in Washington D.C., United States of America.

source: mnh.si.edu

Last but not least, the De Beers Centenary Diamond valued at $100m which was found in a premier De Beers mine has no internal and external flaws.

source: amodmag.com

To learn more about those surprising gems, click here.

One thing is certain though, the sun is shining somewhere in the world, and the European wealthy will be jetting down to soak up the rays and enjoy the warmer climate whilst Europe faces yet another winter.

Here are wealthmonitor top holiday destinations for 2012 (and some nice beach photos for you to day dream)

1.      The Maldives

The group of islands off the coast of India is a challenging trip but worth the long haul. Flat, sandy beaches decorate the coral atoll visible through the water surface. One of the most exclusive resort is the Conrad Hotel, featuring water villas, 2 spas and 7 world-class restaurants — all surrounded by coral reefs and a lagoon plus its unique Ithaa restaurant, which sits 16 feet underwater and has a glass-domed ceiling. Maldives caters for all the needs of the rich and famous and is our number 1 destination for 2012.

source: xaxor.com

2.      St Barts, Caribbean
Tucked away in the West Indies, the yachting paradise is also known as the playground of the rich and is undoubtedly the celebrity spotter dream come true. The most expensive yachts in the world can be seen sailing on the crystal clear waters.

source: fodors.com

3.      Tuckers Town, Bermuda
Small and secluded community on the Island of Bermuda, preferred by the likes of Michael Bloomberg, owner of $10 million Victorian townhouse in London’s Cadogan Square. Ross Perot and Silvio Berlusconi are also said to own mansions on the island and frequent the golf course located in the Millionaire’s row of the island.

source: worldgolf.com

4.      Mustique, The West Indies

The island is one of a group called the Grenadines, most of which are part of St Vincent and the Grenadines, in the West Indies.

The island is owned by the Mustique Company and very few are able to visit it. Those who could include Mick Jagger, Bill Gates, Queen Elizabeth II, Tommy Hilfiger, David Bowie, David Duchovny and Noel Gallagher. The island is fiercely protected to maintain its unspoilt beauty. In the past, it was inaccessible unless you owned a property there and all planes had to have permission to land at the airport. There is only one luxury hotel on the island.

source: i.telegraph.co.uk

5.      Fiji

Last but not least, this paradise group of islands lost in the middle of the Pacific. Fiji is considered one of the best tropical holiday destinations and is a favourite of the rich and famous. This group of 322 islands offers wide variety of beautiful sights and luxury activities such as snorkelling, hiking, kayaking, surfing, sailing and scuba diving, which are available to visitors all year-round.

source: cloudfront.net