>We do not see on-line in the same way as Bill Gate's has to.
>We see it as yet another distribution channel and medium
>on which to distribute our content.
Ok, I can appreciate that you don't have as high aspirations for the internet as Bill *Gates* does. And, I wasn't aware that you were planning on using the internet as a distribution channel. However, with that said, it will still be years before the internet is ready to handle the datarates required for this sort of operation.
The point that I'm trying to make is that you guys are now hyping "on-line" just as Brian Beninger hyped "multimedia" years ago. The hard cold fact of life that must be faced is that you guys have NO choice but to be successful in traditional retail channels and to a smaller extent the educational channels (which it appears Broderbund, Humungous and Disney have all set their sights on as well) in the short term. You aren't going to make enough money to stay afloat long enough for the internet to become a distribution channel unless you are selling at retail RIGHT NOW. You obviously can set up a web site just as well as the next company and you can wait around for the internet to "happen" just as well as the next company. What's going to keep you alive long enough to see your internet plans come to fruition?
I see by your latest 10-Q that you have a total of 32 employees, of which only *6* are working on titles! The other 26 are all administrative, tech support, sales, etc. A little top heavy, wouldn't you say? I think having the option to download new modules for your software is a good idea, but first you must have the actual piece of software in which the modules will work, and it appears that you guys just don't have the horsepower to make that happen.
>To us it is the transition from 8-bit to 16-bit to 32-bit to...
Oh please. You know, it's not the number of bits that you have, it's what you do with those bits that's important. Witness the retrogaming phenomenon. When we programmed on 8 bit processors, we were *required* to write tight code. When I was 14, I wrote a text processor for the Apple ][ in assembly that fit into 14k and it supported hidden formatting characters, word wrap and file compares and it was wicked fast. The current lumbering elephant called MS Office is what, 300 Megs? If you want to impress me with your technology analogies, tell me that to you it's like the transition from sequential to parallel processing. That will demonstrate to me that you've actually spent some time investigating what the current state of technology is rather than leaving me with the impression that you've just read the latest issue of Next Generation magazine.
>Remember, the cost of technology and communications is
>going down fast and the availability of reliable systems for
>the net is going up fast.
The cost of technology and communications is going down fast? Tell that to MCI, please. And reliable systems on the internet? Come on, TCP/IP is barely surviving as a standard and you're suggesting that the internet is becoming more reliable? The internet is going to become less and less reliable until it either implodes or adopts a strictly controlled set of standards.
>This is good for company's like ours as long as we do not
>invest too far ahead of the curve.
It's just not possible for you to invest too far ahead of the curve because the technology that you would be investing in is beyond your scope as a content provider.
> In short, we do not have to be all that successful in order to
> make money on the net.
You're assuming that the cost of the technology will remain constant, and therefore *any* revenue that you receive via the internet is gravy. It's cheap enough to set up a website right now, but what about a year from now? How long will it be before the FCC steps in for real? You'll be paying licensing costs, your access costs will rise as your service provider is taxed and licensed, etc. etc.
> If we are successful, it will be very profitable for us.
No, if the internet gets to the point where it could be profitable for you, it will more than likely be profitable for the telecommunication companies and service providers. You are just like many other CEOs of small technology companies. You see the internet as a free ride, and it isn't.
I know that all this seems very negative, and I've been very negative towards your company for a long while now (as the other readers of this group will attest.) However, you have been asking investors for money for years now, and I think that you should belly up to the bar and show what it is that you've really got to invest in, rather than this nebulous thing that you're pushing now. What products have you got? Who have you got working for you in production? What other titles have your production people worked on? If you're asking for venture capital yet again, fill us in on the concrete assets that we'll be investing in. Brian wanted us to invest in the abstract thing called "multimedia" and now you want us to invest in the equally abstract thing called "online." Show us what you've got for real, and then I promise I'll back off.
Bart. |
