Infinium Labs Owes $4 Million, Requires $68 Million to Stay Afloat

nz17 writes "Looks like Infinium Labs, 'maker' of the Phantom game console, can't manage its debt. According to GameSpot, the company's recently filed Securities and Exchange Commission papers show that Infinium currently owes $4 million as a capital deficiency, but requires an estimated additional $68 million to continue work until the end of 2006. However, Infinium remains chipper in the face of oppression, as it estimates its first year of sales will garner $35 million in revenue. Will the Phantom console launch on the projected date of November 18th, 2004, or will the system live up to its name?"

Comments

$35mill?

[obeythefist]

Let's play with the numbers. $35,000,000 in one year. Let's say they're selling PC's that play games for about $500 each (reasonable price for a desktop gaming PC on the very low end). So, game sales and royalties aside, they'd need to sell 70,000 consoles to make up that revenue.

That's not a totally unreaslitic figure - I guess there are at least 70,000 suckers in the world, although I imagine that there will be fewer sales and more revenue from subscriptions or whatever model the Phantom is supposed to use for gaming.

The problem is that I can't see $35M revenue (not profit) paying Infiniums costs or paying any of that $68M debt. How exactly do you rack up $68M in debt developing a PC anyway? The personal computer is pretty straightforward as it is... most of the work has already been done.

Needless to say, they also have a poor reputation from that legal fight with Kyle earlier on, that won't help them get sales because reputation counts for a lot in the gaming industry.

Re:$35mill?

[rsilvergun]

How exactly do you rack up $68M in debt developing a PC anyway? The personal computer is pretty straightforward as it is... most of the work has already been done.

Licensing fees. Games don't grow on trees after all, and Infinium probably had to cough up major dough for the right to market PC games. That, and I have no doubt the owners are drawing a hefty salary. Oh, and developing and mass producing a custom piece of hardware, even one based on off the shelf components, is pricey too. Microsoft pulled it off with cheap Mexican labor and bribing the local officials to ignore little things like safey and environmental regulations. I doubt Infinium has that kind of skill/money.

Re:$35mill?

[obeythefist]

True, Infinium would be screwed if they didn't have some decent publishers/titles available for Phantom when the time comes. So instead they had better hope that $68M got them some decent publishers or they're really stuffed. And some of the bigger game houses are already "owned" by MS, Sony, Nintendo. They won't be very obliging about helping more competition into their market. I wouldn't suggest people invest in Infinium right now.

Re:$35mill?

[clambake]

The problem is that I can't see $35M revenue (not profit) paying Infiniums costs or paying any of that $68M debt. How exactly do you rack up $68M in debt developing a PC anyway? The personal computer is pretty straightforward as it is... most of the work has already been done.

You weren't around in the dot com days, I take it. I worked at a company that blew $250M in six months just buying rights to pop star's websites. Not the rights to any of the SALES or AD REVENUE, mind you, just the right to host and the website... that's right, PAYING to eat the costs of high bandwith sites without any of the possible benifit.

Re:$35mill?

[rudy_wayne]

and developing and mass producing a custom piece of hardware, even one based on off the shelf components, is pricey

Huh??

The only thing "custom" is the case. It takes some money to design and mass produce the case, but after that, it's just a matter of paying people to stuff standard off-the-self parts into it.

Re:$35mill?

[gl4ss]

they dont have 68m in debt, they would need 68 million to operate for those couple of years.

(to buy those consoles before selling them for example, it takes a lot of mone up front)

Re:$35mill?

[Ayaress]

The thing is, they don't have the rights to any games that they can verify yet. So far, they've claimed that Starcraft: Ghost, Fallout BOS, UT2k4, Doom 3, Diablo 2, and probably a dozen other games were to be in their launch lineup. The catch is, you send an email to id, Interplay (when it was still around), or Blizzard, and they say they don't have plans to release their games on the Phantom (usually with the "at this time" qualification attached).

Phantom Launch

[Anonymous Coward]

I'd be very, very surprised if the Phantom launched in November as anything approaching what we'd recognise as a games console. The idea of it having a proper games library at launch, or indeed at any point in the short-to-mid-term future is preposterous. As I understand it, the idea is that you'll be able to download and play PC games on it, paying both a monthly subscription and the cost of the actual PC game to do so. Leaving aside all the obvious problems that potential customers are going to have with this, I just don't see how the system can work.

After spending several years in a pretty much static state, the minimum specs for PC games have finally resumed their upwards march. Farcry, Unreal Tournament 2004 and, in particular, Doom 3, have finally forced many people into upgrading PCs which hadn't needed it since soon after Quake 3 came out. From what I've seen, the Phantom's hardware is inferior to that needed to run any of the above games well on a current PC. Admittedly, the resolution will be a lot lower, as you'll presumably be playing on a TV, but even so, the Phantom's going to be obsolete with regards to mainstream PC games pretty much as soon as it's released.

Then we have the issue of bugs and hardware compatibility. The X-Box is also built on PC hardware, and it's not really suffered from these. A console game having a major bug generally warrents a slashdot games story devoted to it; a PC game NOT having major bugs at release probably warrents the same. Will the Phantom be clever enough to be able to automatically patch any games the user has bought for it? Moreover, while the X-Box can count on its developers making games specifically for its hardware, the Phantom, which will apparently run full-blown PC games, has no such guarantee. Any PC gamer will at some point come across the situation where he gets a game that doesn't like a specific bit of his hardware, necessitating a specific patch, driver update or even hardware change. With the battle between ATI and Nvidia really getting into swing, it's perfectly possible that we'll see deliberate hardware incompatibilities starting to crop up. How is the Phantom going to react to this?

If the Phantom ever does actually appear, the only role I can see for it is as a kind of extension of current "digiboxes" and the like, running simple games that will be covered in the montly subscription price. How many people will be willing to pay for this? I know I wouldn't...

preorder?

[Anonymous Coward]

Is it too late to preorder? I can't find any sales information so I guess it must be sold out. :P

Re:preorder?

[Ayaress]

I registered to reserve the opportunity to preorder about a year ago. They asked a lot of funny questions, though. I had to list all the games I'd bought in the last year, how much money I make, my social security number, credit report, father's maiden name, and it had a section at the bottom with a check box and a line saying, "I hereby certify that I ceremoniously killed a domestic companion animal at some time after beginning to fill out this form," and wouldn't let me continue until I checked it. I sure hope I get mine in time for Duke Nukem Forever.

Look at the equation

[tod_miller]

SCO

Have nothing of real value
Sue people
Lacking money

Infinium

Have nothing of real value
Sue people
Lacking money

Oooooh one at a time please, there are plenty of stocks to go around.

Prediction: Infinium can suck my balls.

How many game developers have voiced support?

0

I think it is a hyped up PC with gfx card and a subscription to a games download server - sounds pants to me.

Gotta link:

Timothy Roberts, CEO of infinium labs

Gotta love penny arcade.

Explain to me...

[Silverlancer]

Explain to me... why does Infinium believe that people will buy a console made by a company about to go bankrupt to play games that don't exist?

Appearantly...

[C0rinthian]

Their console isn't the only thing thats vaporware...

Infinium hires new spokesperson

[SimianOverlord]

Press Room, 09/09/04

Muhammed Saeed al-Sahaf: We have much, much money. Many games for console. Console has already appeared in shops, and we have made many millions out of it.

Muhammed Saeed al-Sahaf: Nintendo and Microsoft pigdogs are running for the cover. We will crush them like a snake, and burn their machines in the streets.

Muhammed Saeed al-Sahaf: Our console can fly, hoover and tidy your bedroom whilst making dinner for 4 and creating virtual reality world where you are the One, with boomboom magic powers.

$Four Million? BFD

[Anonymous Coward]

Infinium currently owes $4 million

This would probably be shocking to mw if I hadn't just sent my daughter off to college this weekend. To me, $4m is just "eh."

It's the CEO

[solitarian]

No one seems to be pointing out that the "brains" behind the company has a history of creating then bankrupting companies. I assume he is an excellent marketer, or knows a lot of rich morons, who are willing to fund his ideas.
He probably knew that Infinium would go belly-up, but he gets a nice paycheck until it does.

How exactly are they planning on attractin anyone?

[Moo Moo Cow of Death]

So let me get this straight...

-They have NO hype for commercials, internet advertisements or even the occasional popup.
-They have NO credibility in the gaming community overall
-No major, minor or even INDEPENDENT names that I know of have backed them or stated they're planning to in the future
-Their CEO is known to be, by and large, an asshat and possibly the only person the company
-They have a couple million in debt with all the above and their plan is to produce a console which in order for us to keep playing on they HAVE to stay in business

So how exactly did they plan on going anywhere except to perhaps Cuba? Africa? Some other country that won't export them?

I've garnered most of my opinions on this from hardocp, PA and other misc sources btw

Re:Careful

[WormholeFiend]

yea, but they're already out of money, and lawyers don't work for free.

Whereisphantom.com

[Torgo's Pizza]

Not to toot my own horn, but Whereisphantom.com has posted detailed information about this last month. If you want the latest news about Infinium Labs, you need to start visiting WIP regularly. Already today we have breaking news of another company suing them in small claims court and their CFO threatning harm to the owner over a small billing issue.

Just because Gamespot finally gets around to posting information doesn't mean that it's news. It's rather old news to be sure.