RE: SW's 10Q (Jamie Westock)
> New management made the decision to narrow its focus and concentrate
> on the curriculum education software market vs. entertainment side
> where fad and big marketing bucks are needed to make an impact and
> compete against very deep pocketed competitors.
I'm going to have to disagree with you here. The entertainment market is filled with some very deep-pocketed competitors, but the educational/kids market is filled with the _deepest_-pocketed competitors and the market is so small that it is easily dominated by one big company. And, the educational market is just as guilty of being a slave to fad and big marketing bucks - why else would SW pay the kind of money needed to obtain the Major League Baseball and NFL licenses. If you take a look at who's making money in the kid's market, it's Disney, Broderbund and Humungous. Disney especially is spending millions to promote their software, and it's always tied to the latest thing. Take a look at the Toy Story Animated Storybook rollout. Millions of bucks spent there.
> Although SW is still a risky investment, I think under the current
> operational setup/expenses and market/product focus, it has a much
> better chance of recovering than it would have had staying the
> previous course, or (even worse) deciding to pursue entertainment.
I'm going to have to disagree again. SW has a chance of temporary recovery (ie. at least long enough to squeeze out a few more dollars) but it's long term viability is non-existant. You can look at the paperwork for this company until you're blue in the face, but if you take a look at the reality of the situation, you'll see that there's some fishy stuff going on here. Remember, SW no longer has any type of proprietary technology so they'll always be dependent on companies like Macromind, and therefore will always, always be on the trailing edge of technology by at least a year if not more. If you don't believe me, put Major League Math side-by-side with The Toy Story Animated Storybook. Sure, Toy Story isn't a curriculum educational prouduct, but it is the direct competitor of Major League Math. The technological differences between these two products are staggering. So, while companies like Disney and Broderbund are always coming out with the latest thing and making a pile of money at the outset, SW will be coming out a year later to pick up the scraps.
Bart. |
