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Technology Stocks : 7th Level

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To: Ron Wargo who wrote (343)6/28/1997 11:33:00 AM
From: Pei-Hwa Ho   of 1019
 
I have owned SEVL for quite some time now, bought in when their Monty Pythons was doing great and I like the graphics quality of their games. But, they didn't come up with more popular games and, all that is history now (stock was at $22 then). The cruel fact in the game industry is that the top 3 to 5 games collect the majority of the revenues (like 85 to 90%, saw an analysis a while back). So a company needs to come up with one popular game after another to stay on top or have a business model that brings them continuous cash inflow. We've seen a lot of consolidations in this sector and this may continue. Price will have to come down to spur sales. The bottom line for SEVL is that if they could develop a couple of good games, sell them thru retail channels or other brand name (Disney,...) and be profitable then they have a chance. Otherwise evolution will take care of it.

-Pei-Hwa
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