Investment bank sues Infinium
by dsfsd · in General Discussion · 12/02/2004 (5:22 am) · 17 replies
As if their $20m debt wasn't enough, it may go up still. Sucks for the local developers (GG) included who were hoping the Phantom would some day come to light because of it's opportunities for indie developers.
[quote]Investment bank sues Infinium
By Tony Smith
Published Thursday 2nd December 2004 12:11 GMT
Phantom console maker Infinium Labs has been accused of fraud and breach of contract by investment bank SBI-USA - a claim it is backing with legal action against the videogame company.
Infinium immediately blasted SBI-USA's allegations as "frivolous, without merit and intended to interfere with Infinium's business and operations".
SBI-USA, the US arm of Japan's Softbank, was one of Infinium's original investors. In January this year, the console maker announced a $15m stock purchase from SBI-USA and Trilogy Capital Partners offshoot Infinium Investment Partners. The following April, it signed up HaDavar HaNachon as a third investor. At the same time it said SBI-USA had upped its stock purchase, bringing the total invested by the three companies to $44m.
At the time SBI-USA said it was increasing its funding as a sign of its confidence in the ability of Infinium's management.
Now, however, it claims that in return it was to take a cut from any other finance deals Infinium secured. It says the console maker managed to acquire $30m, but that none of that money has come its way.
Infinium countered by claiming SBI-USA has misrepresented the nature of the two firms' agreement - a deal it says has since been terminated - and inflated the sum of money it had managed to secure as investment capital.
"Infinium's agreement with SBI-USA provided that SBI-USA would be paid, under certain circumstances, for investments made by parties with whom SBI-USA had a pre-existing substantive relationship," Infinium CEO Tim Roberts said in a statement. "SBI-USA was wholly unsuccessful in its efforts and was unable to raise any funding whatsoever from such investors. As a result, Infinium terminated its agreement with SBI-USA.
"The Company will vigorously defend itself from these meritless allegations, and will consider all remedies available to it, including all counterclaims and causes of action arising from the lawsuit and the issuance of this inaccurate and malicious news release," he added.
Infinium is already embroiled in legal action with hardware-oriented website HardOCP. The threat of a further lawsuit and the prospect of a countersuit also comes at a time when the company's own Securities & Exchange Commission (SEC) filings show how much cash it still needs - $22.2m - to raise if it's to meet its current launch date and the marketing programme that will support that launch.
The Phantom console and associated broadband games service are currently due to ship some time in Q2 2005, after being delayed in September from the planned 18 November release date.
[quote]Investment bank sues Infinium
By Tony Smith
Published Thursday 2nd December 2004 12:11 GMT
Phantom console maker Infinium Labs has been accused of fraud and breach of contract by investment bank SBI-USA - a claim it is backing with legal action against the videogame company.
Infinium immediately blasted SBI-USA's allegations as "frivolous, without merit and intended to interfere with Infinium's business and operations".
SBI-USA, the US arm of Japan's Softbank, was one of Infinium's original investors. In January this year, the console maker announced a $15m stock purchase from SBI-USA and Trilogy Capital Partners offshoot Infinium Investment Partners. The following April, it signed up HaDavar HaNachon as a third investor. At the same time it said SBI-USA had upped its stock purchase, bringing the total invested by the three companies to $44m.
At the time SBI-USA said it was increasing its funding as a sign of its confidence in the ability of Infinium's management.
Now, however, it claims that in return it was to take a cut from any other finance deals Infinium secured. It says the console maker managed to acquire $30m, but that none of that money has come its way.
Infinium countered by claiming SBI-USA has misrepresented the nature of the two firms' agreement - a deal it says has since been terminated - and inflated the sum of money it had managed to secure as investment capital.
"Infinium's agreement with SBI-USA provided that SBI-USA would be paid, under certain circumstances, for investments made by parties with whom SBI-USA had a pre-existing substantive relationship," Infinium CEO Tim Roberts said in a statement. "SBI-USA was wholly unsuccessful in its efforts and was unable to raise any funding whatsoever from such investors. As a result, Infinium terminated its agreement with SBI-USA.
"The Company will vigorously defend itself from these meritless allegations, and will consider all remedies available to it, including all counterclaims and causes of action arising from the lawsuit and the issuance of this inaccurate and malicious news release," he added.
Infinium is already embroiled in legal action with hardware-oriented website HardOCP. The threat of a further lawsuit and the prospect of a countersuit also comes at a time when the company's own Securities & Exchange Commission (SEC) filings show how much cash it still needs - $22.2m - to raise if it's to meet its current launch date and the marketing programme that will support that launch.
The Phantom console and associated broadband games service are currently due to ship some time in Q2 2005, after being delayed in September from the planned 18 November release date.
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#2
12/02/2004 (5:44 am)
Tim, what do you mean by "opportunities for indie developers"? Are you saying "there would be another platform for indies to design for" or was Infinium/Phantom catering to to indie developers? 
#3
I see this as just an inevitable thing. After all who would have purchase a Phantom in the first place?
An intelligent company would have touted it as a replacement set top box to handle satelite recording (as per tivo and sky+) as well as online multiplayer sports, racing games (maybe decent email and video messaging too). Then they would have been able to get investment from satelite TV broadcasters and eventually a buy-out from the likes of panasonic or sony.
Touting it as the next big games console was just plain stupid in my book.
12/02/2004 (6:00 am)
The life or death of the Phantom makes zero difference to Indies as it isn't a concrete platform. I see this as just an inevitable thing. After all who would have purchase a Phantom in the first place?
An intelligent company would have touted it as a replacement set top box to handle satelite recording (as per tivo and sky+) as well as online multiplayer sports, racing games (maybe decent email and video messaging too). Then they would have been able to get investment from satelite TV broadcasters and eventually a buy-out from the likes of panasonic or sony.
Touting it as the next big games console was just plain stupid in my book.
#4
Where have you been man? Phantom is going to ship with Dark Horizons Lore, Orbz, Think Tanks and Marble Bast on it as part of the initial games package. Its an awesome opportunity for us indies to get a chance in the mainstream light for once.
@Peter
I guess the difference here is that you don't have a product thats on the market nor even remotely close to being ready and those of us in the trenches and pioneering this shit for guys like you are busting our asses off to get recognition and adoption for our work. So I hope you will understand that I am a bit miffed and thinking "what rock did this guy crawl out from under" with your comments about it being "...zero difference to Indies...". The Phantom is an opportunity for everyone here, if you are too short sighted to see it as one then I feel sorry for you and your team for not seeing the painfully obvious.
In regards to who would purchase it the answer is simple. Not someone like you. Their target market are the moms and dads who want an affordable PC/Console that can play the latest games that their kids want without having to drag them to the store and buy it or worry about what their kids are playing. I can see how you wouldn't understand this angle since you are not its target market but even still it doesn't take a genius to see that there is a market for it.
In regards to their marketing, that is their choice and they are attacking the particular market that they feel that they need to compete in (ie. against Xbox, PS2 and Gamecube).
12/02/2004 (6:46 am)
@AdamWhere have you been man? Phantom is going to ship with Dark Horizons Lore, Orbz, Think Tanks and Marble Bast on it as part of the initial games package. Its an awesome opportunity for us indies to get a chance in the mainstream light for once.
@Peter
I guess the difference here is that you don't have a product thats on the market nor even remotely close to being ready and those of us in the trenches and pioneering this shit for guys like you are busting our asses off to get recognition and adoption for our work. So I hope you will understand that I am a bit miffed and thinking "what rock did this guy crawl out from under" with your comments about it being "...zero difference to Indies...". The Phantom is an opportunity for everyone here, if you are too short sighted to see it as one then I feel sorry for you and your team for not seeing the painfully obvious.
In regards to who would purchase it the answer is simple. Not someone like you. Their target market are the moms and dads who want an affordable PC/Console that can play the latest games that their kids want without having to drag them to the store and buy it or worry about what their kids are playing. I can see how you wouldn't understand this angle since you are not its target market but even still it doesn't take a genius to see that there is a market for it.
In regards to their marketing, that is their choice and they are attacking the particular market that they feel that they need to compete in (ie. against Xbox, PS2 and Gamecube).
#5
ARE YOU SERIOUS?!?!? WHERE *HAVE* I BEEN!
I certainly feel concern for those involved... I have no idea what else to say. Damn, that sucks. Man, that just sucks.
12/02/2004 (4:54 pm)
@ LoganARE YOU SERIOUS?!?!? WHERE *HAVE* I BEEN!
I certainly feel concern for those involved... I have no idea what else to say. Damn, that sucks. Man, that just sucks.
#6
@Infinium Labs: Ouch. Though, I can't help but feel you deserve some of this...
12/02/2004 (5:34 pm)
@Tim Aste: Dude, I don't think you are supposed to duplicate copyrighted material like that ;)@Infinium Labs: Ouch. Though, I can't help but feel you deserve some of this...
#7
Logan pretty much summed up the indie connection there to Infinium Labs
@Josh
Yeah good point, I have a bad habit of copy & paste & quote, next time I'll just link drop. :)
12/02/2004 (6:08 pm)
@AdamLogan pretty much summed up the indie connection there to Infinium Labs
@Josh
Yeah good point, I have a bad habit of copy & paste & quote, next time I'll just link drop. :)
#8
I had no idea that the Phantom was going to ship with all those games but now that I do, I wish I didnt because it makes me cry :(
12/02/2004 (6:47 pm)
*cries for the indies*I had no idea that the Phantom was going to ship with all those games but now that I do, I wish I didnt because it makes me cry :(
#9
That said, if this lawsuit takes Infinium down, someone else will step up to replace them. The buzz behind the Phantom did prove that there's room for something like this out there, and if it goes away, the interest won't, and neither will the willingness of someone to provide it.
12/02/2004 (6:53 pm)
Yeah, as nice as it would have been to see a bunch of indie games on Phantom, I've been hearing lots of shady things about it and the guy behind it since he announced the platform some time ago. Not that noone should have made a deal with him(I would have), but it's one of those things that, when it happens, you shake your head and say "figures"...That said, if this lawsuit takes Infinium down, someone else will step up to replace them. The buzz behind the Phantom did prove that there's room for something like this out there, and if it goes away, the interest won't, and neither will the willingness of someone to provide it.
#10
12/03/2004 (12:40 am)
I wonder how much their e3 booth cost... what ever happened to keeping low overhead until you were actually making money?
#12
Also, not all bad press is bad press
12/03/2004 (1:47 am)
I've been watching The Phantom for a long time. It seems to always pull through. Guess all we can do is wait and see.Also, not all bad press is bad press
#13
12/03/2004 (7:18 am)
@Charlie: I'd agree except for one part... If their investment bank leaves them this publicly, it'll scare other venture firms that may have otherwise wanted to get in on that action. Potential customers may still wait for the box, but Infinium may have a hard time getting new investors to cough up cash. 
#14
12/03/2004 (8:42 am)
It'll scare consumers too, if they are afraid this new console will join their old DivX player in the trash bin.
#16
Seriously though, Jay's got a point. People don't want to have another Beta VCR laying around...
12/03/2004 (1:50 pm)
There was a hardware DivX player? I think I may have slept in that day ;)Seriously though, Jay's got a point. People don't want to have another Beta VCR laying around...
#17
all the BUZZ about the Phantom, which is a pretty apt name . . . was not about what it was or was supposed to do, but about all the shady business practices and lies and contradictions they guy pushing the thing was famous for. Kinda like Kimble in a way.
12/03/2004 (4:57 pm)
This was predicted long time ago on these very forums . . . not a suprise and not something that was really going to make any money anyway. if what they were pushing had any merit at all you would see Sony, MS and Nintendo all over it as a business plan . . . all the BUZZ about the Phantom, which is a pretty apt name . . . was not about what it was or was supposed to do, but about all the shady business practices and lies and contradictions they guy pushing the thing was famous for. Kinda like Kimble in a way.
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