Can Infinium Compete In The Game Console Market?

Joe Barr writes "IT Manager's Journal is running a story this morning by Robin Miller and Matt Moen on Infinium Labs, the controversial game console maker. The long promised console finally appears to be a reality, but there are serious questions about Infinium's longterm viability in the game console market. ITMJ, like Slashdot, is part of OSTG."

Comments

Woohoo!

[Capt_Insano_X]

Woot! Already downloading the torrent of Duke Nukem Forever pre-release for it!!!

Hard|OCP

[mrpuffypants]

Interestingly enough, on the 14th (last Saturday) at the same time that this conference with the Infinium Labs CEO was going on, Kyle Bennett from [H]ARD|OCP was on stage at Quakecon, smashing a Phantom console with a big fucking sledgehammer.

Pictures are up at qconpics.org in the Saturday gallery. The pictures of the smashing start here. It was pretty cool to see, and Kyle promised the crowd that next week they are going to have a story up all about the internals of what the Phantom REALLY has.

Re:Hard|OCP

[Anonymous Coward]

Basically, it is sad. How childish from kyle, even with all his problems with infinium, to do that. And who cares "about the internals of what the Phantom REALLY has". That misses the point so much that is isn't even funny.

I mean, the article is already ridiculous:

"The box, while cute, is essentially a mid-range PC without a CD drive " --- stupid comment. It doesn't have a scanner either. Nor a printer.

Then, there is the controller, which is:

"perfect for computing (or gaming) with your feet up or lounging on a sofa instead of sitting rigidly in front of a desk"
--- so yes, the phantom is not a PC, it is a console.

"If Infinium fails to sell many subscriptions, it will go out of business. If it sells a whole bunch, it will be heavily in debt. This is the problem faced by any company that needs to put out substantial amounts of money in front in order to generate long-term income. "
--- sure. Same for TiVO. That's the point with subscription based services bunling hardware.

"Also note that $50 million is enough to get about 138,000 subscribers going, assuming no investors who have already put money into Infinium demand a piece of this pie, and that the Operations Cash Fairy suddenly comes down from fairyland to pay all the company's operating expenses during its first year or two of full business activity. But eventually investors will want their money, the Operations Cash Fairy will run off with the Easter Bunny to Never-Never Land, and "up to $50 million" may turn out to be $42 million or $3 million or some other number between $0 million and $50 million, with the exact amount depending on the whims of the investing public and the country's general economic condition at the moment the shares are offered"
--- okay. This is stupid on so many level, that it is hard to start. First, this is not journalist. It is a rant. Second, investro can't "demand a piece of the pie" to a company that is not public and is heavily in debt. Third, if Infinium is too successfull and heavily in debt, it will have zero problem raising money.

"If Infinium delivered streaming games without the Phantom box and charged $14.95 per month for a base subscription, its only upfront cost per subscriber would be sales commissions and distribution costs for whatever piece of custom software it used to run its games on clients' computers."
--- This, coming from a slasdot founder is really funny. Rob don't understand anything about making money. Selling games subscription to PC will ensure 1/ support nightmares, 2/ direct competition with game publishers, 3/ extremely low barrier of entry for competitors, 4/ not beeing an entertainment company, 5/ service beeing hacked under a week. It would be something TOTALLY different from what they try to do. This is akin to 'Apple must port OS X to windows to make money'. Geezus.

I could go like that throught the whole article. There is that 'hard core gamer' friend of rob (hence definitely not in the target demographic), that believes phantoms sucks, but don't whant his name published because he really really want to stay on the beta program. It is so ironic...

It looks like rob hate infinium because of their product positioning ("on-demand game provider for the whole familiy"). It recalls me the Apple's iPod announcment on slasdot. "Lame", was the word used, because the hard drive was too small and it was not USB, and it was Mac only, while apple was selling a non-painfull music listening experience.

Anyway, the Phantom will most probably tank, but the idea is worthwhile anyway. Getting a game-on-demand console to the family (/not/ the hard-core gamer). Such a box could easily extend to video-on-demand (DiVX), and could be a fabulous hit.

Of course, beeing the first-mover here is really a disdvantage. And infiniumlabs have quite a bad track record.

Business plan summary

[Tx]

*Target market: people who have already grown out of games, and their wives! OK, so the kids might actually be vaguely interested.

*Subscription: $30/month for crap games, anything worth paying will be extra.

*Console cost: Free with 2 year sub, $??? with a 1 year sub.

Somehow I can't see this working. With your PC or conventional console, $30/month will get you a new game, or a couple of used/budget titles, which you get to keep for ever if you like, or you can trade them in/sell them. Plus you can rent a good few games for that money, without a monthly commitment.

If the $30/month actually gets you access to a constantly expanding list of decent games, or the premium games have a suitably small one-off fee (rather than pay per play, or limited time payment) then they might just pull it off. I'm not holding my breath though, I guess we'll see when they eventually list some publishers.

Re:Whoohoo!

[phatlipmojo]

Capitalism is the perfect system that fits human nature -- human nature is competition.

Sez you.
I say human nature is cooperation. And, hey, look, I presnted just as much evidence as you did.

I talked to them at E3

[Groo Wanderer]

I have been following this company from the initial reports that they are a scam to the lawsuit to E3. I sat down with their head rep at E3 and had a long chat with them.

My short take is a low-end PC with a pay-per play rental model for old games. Yee-friggin haw, sign me up. There was nothing there that I couln't do myself with only spending a little money on a plastics prototype shop and a flash interface for the UI. Oh yeah, an auto body shop for a spiffy paint job also.

Then there is the more troubling aspect. They sued Kyle/HOCP for a negative report. From my perspective, it looks like they picked a fight for no reason. The story on HOCP was 6 months old and pretty much forgotten. If they had come up with a prototype and sent it to Kyle and said 'see, we are real, print a retraction please', I would bet good money that Kyle would have done so.

No, these morons, and I use the term with no disrepect meant toward anyone who is a clinical moron, sued HOCP. There is nothing in my mind that cemented the fact that they are indeed a scam with a lot to cover up than this fact.

Then it gets better. Read the letters that their lawyers sent Kyle, they are laughable. They are typo ridden, somewhat contradictory, and leave you with the distinct impression that the Infinium legal squad is a bunch of chucklefscks. Go read Kyles account of it, and the legalish stuff he was sent. Then go check out www.whereisphantom.com for a more up to date list.

I think the lawsuit will obliterate them, not that they were real to begin with, they are acting WAY to much like they have a mass grave full of skeletons, and the Iraqi WMDs to hide.

So, moving right along, back to E3. I write for The Inquirer, and I went to the Infinium booth at E3. I told them my concerns, and as a writer I told them I would never write something objective about them, IE no coverage for anything but news about the lawsuit, until they dropped the lawsuit AND apologized to Kyle.

Why? Simple, they sued Kyle for in my opinion, a well researched, fair article about their state of being. Imagine you get a review copy, could you be honest under those circumstances? If they sue for negative reviews, how can you be sure any review is even close to honest? Think about that as a chilling effect.

No, the short answer is Infinium by its actions and inactions appears to be a scam. I said roughly the same thing about CDs when the RIAA launched the Napster suit, no purchases until it is resolved. If it is resolved in the favor of Napster, I would buy again. If it isn't, no more music sales. I have not missed the music I no longer buy. The other analogy is SCO, would you buy a copy of Openserver knowing they sue their clients? Same with Infinium. Drop the suit guys, and backpedal hard, or you get no lovin from me.

Sadly, I don't think you will live long enough to ever make a purchasable product, the HOCP article says most of what I need to know, and your confirmation of it's accuracy with your actions tells the rest. Stick a fork in Infinium, they are done.

-Charlie

Here's Why Infinium will succeed

[rfc1394]

Let's see:

1. Specs of machine inadequate to play DOOM 3 which means it's not even a reasonably high enough grade machine.
2. No CD or DVD drive means you can't play other games on it and also means its limited to finite capacity (internal disk space) meaning eventually some games you paid for have to be be erased to fit new ones on it. If those become unavailable you're out of luck.
3. System design makes it essentially useless for any other purpose except playing games (you can use a Nintendo 64 as an expensive DVD Player out of the box as well as a game machine, and you can with an XBOX if you buy a remote for it).
4. Company believes its system is unhackable which means they are in for a shock when people figure a way to hack it.
5. System runs off of a modified version of Windows XP, which not only means they're paying a fortune for licensing fees, and their supplier is one of their competitors, it also means it's vulnerable to all of the typical problems of a common PC.
6. Service charge is a whopping $29.95 a month, not including premium games, which are an extra charge.
7. Can only play games bought for a machine on that machine, you can't take the game someplace else, like you can with a Nintendo or XBox
8. If you stop your subscription the games no longer work and all of them that you 'bought' go bye-bye
9. If the company goes out of business, all the games you 'bought' will no longer work and all of them go bye-bye
10. I think if you don't have an Internet connection you can't use the machine at all.
11. (This one is from personal knowledge, not the article) A system like this called 'The Game Channel', which I think was from Sega, tried this a few years ago over Cable, for $9.95 a month. It went bust
12. If they get less than 200,000 subscribers they will be losing money and probably go under, fast; if they get more they will be deeply in debt, and based on the numbers, there is exactly $0 available to pay back that debt after deducting costs.
13. Competitors not giving away hardware can undercut them on price, operate a system much cheaper and will make a profit.
14. System depends upon access to broadband (access via dial-up would be agonizingly slow and probably unusable) which means the customer is going to have problems with others if the other people's uses (net phone, downloading, telecommuting) mean there isn't enough bandwidth available.

In short, there are so many advantages to this system I can't see how it can possibly succeed^h^h^h^h^h^h^h^h fail!