Gizmondo paying Gizmondo for in-house games?
Let’s start with the fact that the report doesn’t actually reveal how many Gizmondo units have been sold. If you’d invested in the Gizmondo, wouldn’t you want to know how it was selling? Well sorry, you’re guess is as good as ours… let’s say anywhere between one and quite a few because, let’s face it, Gizmondo aren’t telling.
Now let’s have a look at who Gizmondo are doing business with… Oh, hang on… they were doing business with the Jordan F1 team but that seems to have gone belly up with Jordan suing and Gizmondo settling. Oh well, everyone has blips, and Gizmondo are no stranger to that as they appear to have settled another lawsuit with their landlords Christian and Timbers. But that’s ok, the Gizmondo lawyers can keep themselves busy with the USD$4.1 million dollars PR agency Ogilvy says it is owed for 2003 to 2004. Once they’re done with Ogilvy, the Gizmondo lawyers can then perhaps worry about MTV Europe who are “reserving their right to bring legal proceedings” for the non-payment of USD $1.5 million which was due last March. Or how about Handheld Games, who are suing over a development contract?
Perhaps Gizmondo are needing a bit of spare cash? Maybe they’re short of a few readies in the greenback department? After all, they have posted a loss of USD $99 million for 2004 and upped that to a whopping USD $210 million for the first half of 2005 with Gizmondo blaming development costs of the unit and “non-cash expenses associated with shares of restricted common stock issued for services” for the losses. However, they did manage to secure another USD $73.1 million in investment funding and a 24.7 million stock issues raised over USD $200 million.
So is that all there is to the financial report? An announcement of losses with an announcement of raising capital along with a few legal issues? Erm, no, there’s plenty more that makes some entertaining reading, if only because of what can best be described as ‘coincidences’ in where money has been shifted around… I’ll just tell you the facts and let you make your own assumptions.
Starting off with a few costs, let’s have a look at what Gizmondo have been spending on to generate that massive loss. Well there’s the USD $5.9million contract with Electronic Arts to develop FIFA and SSX games for the Gizmondo. Fair enough, if you want a successful franchise on your platform, you’ve got to pay for it. But how about the USD $3.5million paid to Northern Lights to develop Chicane and Colors? Or the USD $4 million to Games Factory Publishing for no less than 19 titles.
This latter contract with Games Factory Publishing is interesting in that some of the titles are what could be called… well, odd. Amongst the 19 titles paid for Gizmondo will be getting New Millennium Encyclopaedia, Outlaw Golf and, most bizarrely, Typing Tutor. That last one should be interesting as the Gizmondo has no keyboard or touch screen… so just what good a typing tutor would do is a mystery… unless it’s to help you spell properly when sending an SMS perhaps?
But let’s have a closer look at Northern Lights now after all Chicane and Colors are touted as being leading titles on the Giz. Except that the games aren’t being developed by Northern Lights, but by Warthog and Indie Studios, both in-house developers for Gizmondo. So let’s just get this straight, Gizmondo are paying Northern Lights to develop games that Gizmondo are developing in-house? A little delving and the co-owners of Northern Lights are revealed as Carl Freer and Stefan Eriksson. Nothing wrong there until you discover that Freer is Managing Director of Gizmondo Europe and Eriksson is Director of Gizmondo Europe. Given that Warthog and Indie Studios are in-house developers for Gizmondo, doesn’t that kind of leave Gizmondo paying Northern Lights for games Gizmondo are already working on, to the benefit of Freer and Eriksson?