Nintendo's planned video-on-demand service--reportedly called "Wiinoma"--has some obvious disappointments. It is so far only slated for launch in Japan, potentially excluding a large chunk of Wii owners. Even if the service spreads to Europe and the United States later in 2009, don't expect to be watching favorites like Lost or The Wire straight away. Only videos exclusively made for the Wii will be available, with media firms like Fuji Television (other-otc: FJTNF - news - people ) and Nippon Television (other-otc: NPTVF - news - people ) reportedly planning cartoons, entertainment shows and other original programming for the launch.

The Wii console itself has its limitations when it comes to video playback, a sign that Nintendo (nasdaq: NTDOY - news - people ) never really intended to sell it as a mixed-media box. You can't play DVDs on the Wii, and its puny 512-megabyte storage memory is barely enough to store game downloads and save positions--let alone video footage. Trying to sell the Wii as a video-focused console will therefore be tough, no matter how many Japanese cartoons or cookery shows are available for streaming.

Compare this with the Sony (nyse: SNE - news - people ) Playstation 3 and Microsoft (nasdaq: MSFT - news - people )'s Xbox 360, which have trailed the Wii in worldwide sales since 2007. Both consoles can play DVDs, both offer movie downloads and both have online video stores selling television shows from the likes of Fox and TimeWarner. Hard-drive space varies, but customers can upgrade at their leisure or fork out for a big-memory bundle: the Xbox 360 offers a 120-gigabyte model, while the Playstation 3 can be bought with 160 gigabytes of storage space. Wii users are stuck with their 512 megabytes.

But Nintendo is no fool, and the company might find a different kind of advantage in a stripped-down, exclusive-for-Wii video service. Advertisers are already interested by the Wii's success, given that advertising agency Dentsu is launching the channel with Nintendo, and free-to-watch videos may end up doing more for the Nintendo brand and its products than pay-per-view movies and television shows would.

"Nintendo could have an advertising advantage," said Michael McGuire, an analyst with Gartner Research. "With the interactive nature of the games, you've got Wiis that are in homes and exercise classes, and that's a pretty interesting demographic."

Electronics maker's new TV model can pull movies off the Internet all by itself.

Automakers finish 2008 on a bleak note. Expect 2009 to be worse.

Fixing IT

What should be on the ''to do'' list of CIOs in the new year.

Ed Sperling

Crystal-ball forecasts for the coming year ignore one of the most fundamental truths about people deeply engaged in information technology: Real IT folks don't just dream about IT, they fix things.

In keeping with that spirit, I'd like to offer up a "to do" list for CIOs and other technology-driven workers, based on some ideas of what technologists want from technology--and what it will take to get there.

Better Connectivity

It's relatively easy to look at Japan or even Europe and say connectivity is better because, well, it simply is better.

Sure, those geographies are smaller, which helps the infrastructure more economically serve a great number of people. But connectivity in China is typically better than what we get in the U.S. (The New York Times' Thomas Friedman makes this point painfully well here.)

Connectivity needs to be radically improved everywhere in the U.S., including in densely populated centers where calls are still dropped or filled with static. The fact that we even know how to read bar charts for reception is a stark sign of the problems. The solution will involve a much bigger investment in infrastructure, which means a collaboration between private enterprise and government--something that has been lost since the breakup of AT&T.

More Bandwidth

Much of the fiber backbone laid during the dot-com bubble is still dark, because the "last mile" connections to businesses and homes never happened. These digital dirt roads are slowing down the adoption of all sorts of services that demand high bandwidth, as well as new ones, such as Internet TV and streaming high-definition movies.

More Research

Innovations don't happen overnight. (Longtime entrepreneur Judy Estrin has written vividly about this problem.

Research groups such as Xerox's (nyse: XRX - news - people ) Palo Alto Research Center (PARC) and AT&T's (nyse: T - news - people ) Bell Labs brought us the graphical user interface (best exploited by Apple (nasdaq: AAPL - news - people ) in the Macintosh and later by Microsoft (nasdaq: MSFT - news - people ) with Windows); the six-way pointer (Nintendo Wii); wireless LANs; cellphones; Unix (Mac OSX and all versions from Windows NT onward); the C programming language; Internet switching; laser printers; e-mail and many more developments we take for granted.

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Such programs, however, are increasingly scarce. IBM (nyse: IBM - news - people ) has some, as do university labs. Microsoft and Google (nasdaq: GOOG - news - people ) contribute a bit. As a nation, we have to find ways to encourage pre-competitive research as a foundation for many efforts.

New Compensation Schemes

The trouble with pure research is it doesn’t mesh well with corporate mandates to meet quarterly numbers and squeeze every last penny of profitability from a company. That may suit current shareholders, but it doesn't build much for the future. We've heard calls for research tax breaks and incentives for years--and those are useful measures, but corporate management needs to revamp its perspective, too. C-level executives should be compensated for superb management as well as visionary planning that will last well beyond their corporate tenures. Executives who get that mix right should be handsomely rewarded--that takes a lot more thought and talent than just cutting costs and shifting jobs to lower-cost areas.

More Openness

CIOs have love-hate relationships with open communication schemes. On one hand, they allow ideas to be freely exchanged on a global basis, which always produces better results. On the other, they create security problems that must be fixed swiftly, disrupting or competing with dozens of other pressing mandates put on CIOs.

The smartest CIOs I speak with live with the problems; they quickly fix any issues that arise so their companies can benefit from a free exchange of ideas. And guess what tools help fix those kinds of problems most efficiently? More data connectivity, better bandwidth, more agile researchers who can see and solve problems well, and executives motivated to find innovative answers with positive repercussions, quarter after quarter.

'Gears Of War' Creator On Gaming's Future

Epic Games' Cliff Bleszinski chats about his inspirations and innovations.

A chainsaw revs. The heavily armored Marcus Fenix lumbers forward, ripping through a Locust soldier as if he were shredding turkey with an electric carving knife. The combination assault rifle and mechanized saw blade, known as a Lancer, is one of the most recognizable components of "Gears of War," the Xbox 360 shooter that asks players to save humanity from an alien horde.

The most recognizable man behind the franchise happens to be Cliff Bleszinski. The 33-year-old design director of Epic Games has cultivated a rock star aura, despite the videogame industry's general lack of celebrity. He started out in the business when he was 17. Now he is in charge of one of the largest franchises on Microsoft's (nasdaq: MSFT - news - people ) console. "Gears of War 2," his latest title, launched in early November and sold 2 million copies its opening weekend. The game is expected to be one of the best-selling games this holiday season. 

Bleszinski, who recently unleashed a new pack of multiplayer maps for "Gears 2" over Xbox Live, talked to Forbes.com about the impact downloadable content has on games, making hardcore shooters appeal to casual audiences and his love for "Super Mario Brothers."

Forbes.com: What game inspired you to make games?

Cliff Bleszinski: The first game I ever played was "Space Invaders" on the Atari 2600. I was instantly hooked by the idea of manipulating images on my television screen but wasn't quite old enough or aware that this could be a possible career. The title that inspired me the most would have to be the original "Super Mario Brothers" on the Nintendo Entertainment System. There was something about these cartoony worlds that unfolded before me that were filled with secrets that, at the time, I believed were not meant to be discovered by the designers.

What is the defining moment of your career, so far?

I'd have to say presenting the original "Gears of War" at the Electronic Entertainment Expo in 2006 to a crowd that was incredibly impressed is right at the top of the list. I hope that there are many more exciting moments like that in store.

Street Slacks After Dow Deal Crumbles

Kuwait bailed on a $17.4B joint venture with the company, dragging the major indexes down.

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U.S. markets wobbled Monday, as investors weighed the impact of a collapsed petrochemical deal against good news for a failed bank.

Dow Chemical (nyse: DOW - news - people ) was reeling, after Kuwait said it was pulling out of a $17.4 billion joint venture, which was scheduled to begin at the start of the New Year. By scrapping the deal before Jan. 1, Kuwait dodged having to pay a $2.5 billion breakup fee.

Investors were pondering the impact of the collapsed venture on Dow's acquisition of rival Rohm and Haas (nyse: ROH - news - people ). Dow had planned to use proceeds from the Kuwait deal to finance part of its $15.0 billion purchase of Rohm & Haas. Citigroup analyst P.J. Juvekar said the collapse of the Kuwait deal was a huge negative for Dow investors, and that the company should try to protect its shareholders by renegotiating the Rohm and Haas takeover, or walking away and paying a termination fee. (See "Kuwait, Dow Chemical Deal Fizzles.")

Dow shares slumped $3.45, or 18.7%, to $15.05, Monday morning; Rohm and Haas tumbled $11.91, or 18.7%, to $51.65.

On a broader scale, the Dow Jones industrial average was off 92 points, or 1.1%, to 8,424 by midday; while the S&P 500 fell 10 points, or 1.2%, to 862; and the Nasdaq sank 28 points, or 1.8%, to 1,503.

Financial stocks softened, despite encouraging news regarding one of their fallen brethren. The Federal Deposit Insurance Corp. is nearing a deal to sell assets of failed bank IndyMac to a group composed of private equity firms J.C. Flowers and Dune Capital Management, and hedge fund Paulson & Co. According to reports cited by TradeTheNews.com, the consortium is close to buying the bank, its 33 branches, its reverse-mortgage unit and a $176.0 billion loan-servicing portfolio. The FDIC seized the assets of IndyMac, which had massive exposure to the subprime mortgage meltdown, in July.

Oil prices were on the rise, as Israel's air strikes against Hamas in Gaza jogged geopolitical fears. Crude came off its highs despite the turmoil, but traded up 35 cents, at $38.06 a barrel, heading toward the afternoon. United States Oil Fund (nyse: USO - news - people ), an exchange-traded vehicle that invests in crude and other products, gained 15 cents, or 0.5%, to $29.25.

GMAC stays mum on debt swap

The financing arm of General Motors Corp. remained silent Monday on whether it had raised enough capital to become a bank-holding company and eligible for access to billions in federal bailout money.

Analysts have speculated that if GMAC (nyse: GJM - news - people ) Financial Services LLC doesn't obtain financial help it would have to file for bankruptcy protection or shut down, which would be a serious blow to parent GM's own chances for survival.

GMAC had received the Federal Reserve's approval to become a bank holding company last week, but the approval was contingent on the auto and home loan provider raising at least $30 billion in regulatory capital. The company had been attempting to raise the needed funds through a complicated debt-for-equity exchange that expired at 11:59 p.m. EST Friday.

In an e-mail Monday, GMAC spokeswoman Gina Proia said GMAC still had no news to announce regarding the debt swap. That came after Saturday e-mails that did not provide any specifics but said that GMAC planned to announce the results of the debt swap soon.

"The offer did expire yesterday at 11:59 p.m. as planned. We have not yet issued final results but intend to in the near term. I have no further comment on the exchange until then," Proia wrote Saturday.

Becoming a bank-holding company would both qualify GMAC to access the government's bank rescue funds and support GMAC loans to car buyers and GM dealerships. GM owns 49 percent of GMAC.

The Federal Reserve apparently needed to see that bondholders were willing to inject more capital into GMAC. The bondholders needed reassurance that the Fed would approve GMAC's application to qualify for federal aid.

If the financing company fails to become a bank holding company, it could mean severe consequences for automaker GM.

General Motors (nyse: GM - news - people )' ownership of GMAC has kept the finance arm lending to dealers and car buyers, even as credit from traditional banks has dried up. If GMAC goes under, other institutions aren't likely to step in to replace the credit lost by GM's dealers and customers.

The Fed's action Wednesday came as GMAC was struggling to get bondholders to convert 75 percent of their debt into equity of the company. It's been nearly two weeks since GMAC has released any information about the amount of participation so far.

As of Dec. 17, only about 16.9 billion, or 58 percent, of its GMAC notes had been tendered, along with about $3.5 billion, or 38 percent, of the notes issued by its Residential Capital LLC mortgage business.

GMAC's goal is to reach $30 billion in capital, the majority of which would come from the exchange of debt. Another part of the equity requirement included a demand from the Fed that $2 billion of the total come from new equity. So far, GMAC has received a commitment of $750 million from GM and private-equity firm Cerberus Capital Management, which owns the majority stake in GMAC.

It's unclear whether that funding would come from the $17.4 billion in bridge loans the U.S. Treasury granted GM and Chrysler LLC - which is owned by Cerberus_ earlier this month.

Some of the rescue money will be available this month and next - $9.4 billion for GM and $4 billion for Chrysler, which have said they could be facing bankruptcy soon without government help. GM is set to receive the remaining $4 billion in loans after more money is released from the financial rescue account.

It was unclear Monday exactly when the Treasury Department planned to release the first set of loans.

"We're making good progress finalizing the automaker loans and are committed to closing them on a timeline that will meet their individual near term funding needs," Treasury spokeswoman Brookly McLaughlin said in a statement.

GMAC has not said publicly how much it was requesting from the $700 billion bank bailout fund. CreditSights analyst Richard Hoffman estimated in a research note Friday that GMAC "could have applied for up to about $6.3 billion."

The Fed order says GM will reduce its stake to less than 10 percent of the voting and total equity interest of GMAC. GM's remaining equity interest in GMAC will be transferred to an independent government-accepted trustee who must dispose of the equity held in the trust within three years of the trust's creation.

Cerberus, which led an investment group that bought a 51 percent stake in GMAC from the automaker for $14 billion in 2006, will reduce its stake in GMAC to no more than 33 percent of total equity.

In afternoon trading, GM shares fell 27 cents, or 7.4 percent, to $3.39.

Associated Press Economics Writer Christopher S. Rugaber in Washington contributed to this report.

The interest rate on six-month U.S. Treasury bills dropped to its lowest level on record at the weekly Treasury auction, the government said Monday.

The Treasury Department said it auctioned $27 billion in six-month bills at a yield of 0.25 percent, an all-time low. That's down from a rate of 0.285 percent last week.

Treasury rates have fallen to historic lows as the worst financial crisis in 70 years has triggered a rush by investors to the safety of government securities. Higher demand for such securities pushes their yield, or interest rate, down.

The lower rates make it cheaper for the government to borrow money, just as the federal deficit is set to balloon due to the rising cost of aid to banks, increased spending on unemployment insurance and lower tax revenues.

The department also auctioned $26 billion in three-month bills at a yield of 0.05 percent, up slightly from last week's 0.04 percent. That matches the rate from two weeks ago and is the highest since three-month bills averaged 0.15 percent on Nov. 24.

Earlier this month, rates on the three-month bill fell to a record low of 0.005 percent.

The rates are known as discount rates because the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.75 while a six-month bill sold for $9,987.43. That equals an annualized rate of 0.051 percent for three-month bills and 0.254 percent for the six-month securities.

Wall Street retreated Monday on concerns that Israel's attack on Gaza might disrupt oil production and shipments from the Middle East, driving oil prices higher.

Investors remained cautious in a holiday-shortened week, unwilling to make many big bets in the final three days of trading for 2008. Israel's escalating attacks against Gaza's Hamas rulers made traders more hesitant to buy.

The tensions pushed oil prices above $40 a barrel during the session, though crude was up just 37 cents at $38.03 a barrel on the New York Mercantile Exchange at midday. Oil has fallen more than $100 from its peak of $147.27 a barrel on July 11 as a slowing economy curbed demand.

Todd Leone, managing director of equity trading at Cowen & Co., said volume is extremely light and that is contributing to the market's swings. Low volume tends to skew price movements.

"What's going on in Israel didn't read well over the weekend," Leone said. "Beyond that, it is an incredibly quiet session. It's really not taking much to move the markets."

Investors also digested a potential blow to dealmaking on Wall Street. On Sunday, Kuwait's government canceled its $17.4 billion K-Dow Petrochemicals joint venture with Dow Chemical Co., saying it was "very risky" because of the global financial crisis and low oil prices. The joint venture was set to begin Thursday.

Rohm & Haas Co. maintains that its proposed $15.3 billion takeover by Dow Chemical won't be affected by Dow's substantial loss of income from the venture. But investors punished shares, driving them down $10.76, or 17 percent, to $10.76. Dow Chemical shares lost $3.89, or 21 percent, to $15.03.

In early afternoon trading, the Dow Jones industrial average fell 121.55, or 1.43 percent, to 8,394.00.

Broader indexes also declined. The Standard & Poor's 500 index fell 14.21, or 1.63 percent, to 858.59; the Nasdaq composite index fell 34.20, or 2.23 percent, to 1,496.04.

Declining issues were ahead of advancers by nearly 2 to 1 on the New York Stock Exchange, where volume came to 353.1 million shares.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.06 percent from 2.14 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from 0.01 percent late Friday.

The dollar was lower against other major currencies, while gold prices edged higher.

Wall Street has largely written off the final three trading days of 2008, the worst year since Herbert Hoover was president. The Dow has fallen 36.2 percent, the biggest drop since 1931 when the Great Depression sent stocks reeling 40.6 percent. And the Standard & Poor's 500 index is set to record the biggest drop since its creation in 1957. The index of America's biggest companies is down 40.9 percent for the year.

Dave Rovelli, managing director of trading at brokerage Canaccord Adams, said investors will be waiting to make big moves until after the Jan. 20 inauguration of President-elect Barack Obama. Wall Street is eager for details on his proposed stimulus package for the economy.

"No one is going to do anything until the New Year," he said.

However, if companies release earnings warnings early in January, or if the first wave of fourth-quarter reports are disappointing, the market could see a return of heavy selling. Investors will be focusing on any word from companies deemed critical to the economy, especially from the beleaguered financial and retail sectors.

This week, investors will also be looking for insight into how retailers fared after the weak Christmas selling season. Stores have slashed prices even further to entice post-holiday shoppers but with many consumers nervous about the economy they're reluctant to open their wallets. That's a troubling prospect for investors, since consumer spending accounts for more than two-thirds of U.S. economic activity.

The Russell 2000 index of smaller companies fell 14.35, or 3.01 percent, to 462.42.

Overseas, Japan's Nikkei stock average rose 0.09 percent. In afternoon trading, Britain's FTSE 100 rose 2.44 percent, Germany's DAX index rose 1.63 percent, and France's CAC-40 rose 0.47 percent.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Crude prices rose above $40 a barrel Monday as Israel and Palestinian militants exchanged rocket fire and the death toll mounted in the oil-rich region.

Light trading contributed to market volatility in the final days of 2008, with price swings of close to $5 a barrel.

Light, sweet crude for February delivery rose $2.31 cents to settle at $40.02 a barrel on the New York Mercantile Exchange, the first time crude has ended the day above $40 in a week. Nymex will be closed Thursday for the New Year's Day holiday.

Retail gasoline prices in the U.S. continued to fall and neared $1.60 per gallon nationally Monday.

In the Middle East, Israel destroyed symbols of Hamas power on the third day of what the defense minister described Monday as a "war to the bitter end." The three-day death toll rose to at least 364 on Monday, with some 1,400 reported wounded. Israel launched its campaign, the deadliest against Palestinians in decades, on Saturday in retaliation for rocket fire aimed at civilians in southern Israeli towns.

Israel obliterated symbols of Hamas power, with missiles striking next to the Hamas premier's home, and devastating a security compound and a university building.

Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, called oil's initial run-up "an emotional reaction to what was going on in Israel," and said similar, short-lived spikes have occurred during other clashes in the region.

"In reality, the likelihood the conflict is going to interrupt oil supply in any way, shape or form is highly unlikely," Flynn said. "Obviously, if the conflict widens, and other countries get involved directly, you might have a different situation."

There were also hints from China the government could go on a crude-buying spree to take advantage of prices below $40 a barrel. A senior government official writing in the People's Daily said China wants to increase its oil reserves to cushion supply shocks that it believes are inevitable.

China is encouraging companies to use all spare petroleum storage capacity to take advantage of the current low prices, the official said.

Asia's biggest refiner, the state-owned China Petroleum & Chemical Corp., recently completed construction of its largest storage project, a 38-tank facility with a total capacity of 32.4 million barrels.

The Organization of Petroleum Exporting Countries, which accounts for about 40 percent of global supply, has announced crude production cuts totaling more than 4 million barrels per day as it tries to stop the decline in prices. OPEC members, however, have a history of ignoring announced quotas and crude traders are looking for evidence the 13-nation group is tightening the spigot.

In Vienna, JBC Energy, in its daily newsletter, said "the UAE has decided to reduce crude supplies in January and February in line with the OPEC production cuts." The United Arab Emirates are the fourth-largest producers in the 13-nation cartel.

Analysts at the U.S. firm Cameron Hanover noted Monday the UAE, unlike a number of other OPEC members, typically abides by planned cuts. "If OPEC countries actually cut all of the output they have agreed to cut, global supplies of crude will be tighter come spring," Cameron Hanover said.

Oil prices have fallen 73 percent since peaking at $147.27 a barrel on July 11 as a credit crisis in the U.S. sparked a steep drop-off in consumer demand and corporate earnings. Analysts expect more dismal economic news from the fourth quarter over the next few weeks.

"More bad profit reports, jobs reports, housing results will put pressure on prices," said Gerard Rigby, energy analyst with Fuel First Consulting in Sydney. "Once Obama comes in, that might start changing sentiment and generate more optimism." Barack Obama is scheduled to be sworn in as U.S. president Jan. 20.

Tumbling crude prices have led to enormous declines in the price of retail gasoline.

At the pump, retail gas prices fell eight-tenths of a penny overnight to a new national average of $1.619 a gallon Monday, well below the year-ago average of $3.039 a gallon, according to AAA and the Oil Price Information Service.

A Shell station in suburban Houston was selling regular unleaded for $1.19 a gallon on Monday.

In other Nymex trading, gasoline futures rose 3 cents to settle at 87.45 cents a gallon. Heating oil rose 4 cents to settle at $1.2853 a gallon, while natural gas for January delivery jumped 31 cents to settled at $6.136 per 1,000 cubic feet, well above the technically important $6 level.

In London, February Brent crude rose $2.18 to settle at $40.55 a barrel on the ICE Futures exchange.

Associated Press writers George Jahn in Vienna, Austria, and Alex Kennedy in Singapore contributed to this article.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed