A blog mostly about MGS4, PS3 and PSP

• 2May 06

  The Gizmondo Story

  don't think that the technology sector, and certainly not videogaming in particular, has ever had quite a colourful company as Tiger Telematics, makers of the Gizmondo handheld, flash through the pan. The story of Gizmondo has it all: A great business concept, millions of dollars in investments followed by huge debts, fugitive executives with convictions for fraud and apparent connections to the mafia... it doesn't get much more interesting around here than this.

  As Gizmondo Europe files for bankruptcy in the UK and the Tiger Telematics empire is falling down around its investor's ears we have an interesting year to review. The 128-bit handheld console at the centre of the business is (or was) an interesting piece of kit. Somewhere between a PlayStation Portable and a Nokia nGage, the Gizmondo promised games, movies and even GPS navigation.

  The company had some interesting ways of financing the handheld as well, including the beaming of advertisements into your handheld. The company first started to become erratic during the summer of 2005 when it was gearing up after its European launch to break the US market. It proposed "streamlining" its operation in Britain by moving their jobs to Los Angeles, in one of the odder outsourcing stories of the year.

  Then come Autumn 2005 we got the first really big signs of trouble when the company posted delayed financial results which showed not only a $99 million net loss for 2004, but a $210 million operating loss for the first half of 2005. Troubling enough that these losses may have seemed on their own, when one took a closer look at the companies spending habits an investor might have reason for quiet contemplation of their decision to invest in the venture.

  As well as purchasing a racehorse, company executives treated themselves to combined millions of dollars in expenses for cars and other perks whilst being on very large, seven figures, base salaries for a start-up company. Family members and close friends too received thousands of dollars in "consultancy" pay.

  For example company CTO Steve Carroll ended the year with a company-purchased luxury set of wheels worth $231,324, and the spouse of Carl Freer, Anneli Freer, received over $170,000 for consultancy services to Gizmondo Europe.

  This lavish taste in cars and fondness for consultancy work wasn't the only thing to raise a few eyebrows that September. $4 million was paid to Games Factory Publishing for producing a number of concepts for the handheld, one of which included a typing tutor. Incidentally, the Gizmondo has no keyboard.

  Delving deeper into the Twilight Zone and we find independent developer Northern Lights, paid $3.5 million to develop two games for the handheld. The two games were then developed by Warthog and Indie Studios, both of which were owned by Gizmondo Europe. Draw the circle even wider and you find that Northern was owned by Gizmondo Europe director Carl Freer and executive officer Stefan Eriksson.

  Interesting though all this is (and I'm only giving you the truncated numbers...) the real coup de grace didn't come until an expose by Swedish newspaper Aftonbladet. This alleged that Stefan Eriksson was involved in counterfeiting in the "Uppsala Mafia", a criminal enterprise which led to him being convicted in Sweden in the early 1990's.

  Eriksson resigned shortly afterwards along with Carl Freer and two other employee's, one of whom it was reported by Aftonbladet is wanted by Swedish police.

  What are we left with after all of this? Well, a pretty useless handheld for one. Though Gizmondo Europe intends to keep trading while the administrators move in its future is uncertain, and certainly the company won't be doing anything big even if it does survive its huge run of debts and angry investors intact.

  The investors will be screaming for blood, no doubt, though at least the bosses have good getaway cars (some of them have since reimbursed the company for some of their more outlandish expenses.)

  With alarmists in this world talking about terrorists planning attacks using videogames and suchlike I suppose it is only a matter of time until we hear the first stories of money being laundered through MMORPG's. As for formerly suspected criminals running companies into the ground, well I suppose Gizmondo is only exceptional in its class for that incidental detail. Anyone can screw up a business, after all.

  I personally wouldn't say that money has been flowing through underhand channels out of the company and into corrupt management's pockets. I would say that Gizmondo is probably one of the worlds worst run technology companies since we entered the modern information age.

  In the past dot-com's were criticised for lavish spending on frivolous items, but rarely have we seen a company then and since that has had so much dodgy cash flying about.

  The Gizmondo itself probably isn't that big a loss to gaming. Handhelds are becoming a leading segment of the industry, holding it up financially through the rocky transition year that was 2005, and the likes of the PSP and Nintendo DS are on the whole superior products. They may not try as much as the Gizmondo, but they at least have companies behind them that can carry through on their promises.

  • Posted May 2, 2006 11:02 pm GMT
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• 2May 06

  XBox Portable

  Here's a fun question to chew on for the weekend. If Microsoft were to launch a handheld device, when would they attempt to do so, and what preconditions would need to be satisfied first?

  To be clear: Microsoft has repeatedly noted that they've got no interest in launching a handheld gaming device at this time and that they're wholly focused on the Xbox 360. However, if they were to establish a solid position for the Xbox 360, might they turn their attention to growing the empire?

  
  
  

  Is the handheld market large and attractive enough? Probably. Are trends moving in the right direction and do people desire mobile entertainment? Yes. It seems that the only reason it’s not a Microsoft priority is that they’re preoccupied with not losing another $4 billion on the Xbox 360.

  Let’s therefore assume that companies (even Microsoft) are constrained in the number of products that they can build, launch and support at once. It follows that a company with such constraints will seek to stagger the release of their stationary and handheld consoles so that the development, manufacturing, marketing and distribution phases of the work don’t bunch up and create bottlenecks.

  Here’s a brief history of handheld releases. The first number is the approximate date of the system’s release. The number after the plus sign is the number of months after the release of the company’s previous major console:

  • Nintendo Game Boy (1989.04, NES + 42 months)

  • Nintendo Game Boy Color (1998.11, N64 + 22 months)

  • Nintendo Game Boy Advance (2001.06, N64 + 54 months)

  • Nintendo DS (2004.11, GameCube + 34 months)

  • Sega Game Gear (1990.10, Genesis + 24 months)

  • Sony PSP (2005.03, PS2 + 54 months)

  Assuming this pattern holds, one might begin to look for an Xbox handheld around 2005.11 +22 to +54 months, which would put it between fall 2007 and spring 2010. 

  What do you think?

  • Posted May 2, 2006 10:59 pm GMT
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• 2May 06

  Ps3 price?

  Sony has been silent as far as the price of its future console is concerned, thus encouraging the spreading of rumors. According to the latest “unofficial information” of this sort, PlayStation 3 is supposed to cost $399 and will have a 60 GB HDD.

  Also, PSM (the independent PlayStation magazine who started the new rumor) says PlayStation 3 will ship in the first half of November

  An earlier statement on the subject came from vice president of Sony Computer Entertainment Europe George Fornay, who said the next-gen console would come with a price tag of 499 euros. Later, Sony claimed that Fornay’s comments have been “mistranslated or misunderstood”.

  Earlier this month, a Sony spokeswoman said that further details on pricing or launch would become available at a press event ahead of the E3, on May 8

  A PlayStation 3 costing only $399 would be a serious blow for Microsoft’s Xbox 360, which also costs $399. The price aside, Sony console comes equipped with a high-definition Blu-Ray drive, while the Xbox 360 could (eventually) match this up with a $100 HD disc drive.

  • Posted May 2, 2006 8:17 am GMT
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