In late February I spoke with Steve Race about the potential OEM of Ultimate Race. He has been opposed in the past to doing OEM sales, fearing they would "cannibalize" sales in stores. He said he's no longer sure that is a good reason to avoid OEM deals because the money flows directly to the bottom line and it increases the visibility of the titles.
I asked him about doing OEM a month or two after a game comes out, and he said the buyers have their choice of many brand new games, so often they have no incentive to bundle a title that is already out. He is not leaning to bundling everything, given the fact that "a buck" is what the typical OEM deal is worth per title. (Coy, that can go into your profit model!) Sometimes even less than a buck. Race said he was interested in giving OEM a try, and noted to me that MPRS now has a person in Alameda exclusively responsible for OEM deals.
Am I the only one who thinks we've really turned a corner this week? I don't mean the stock won't be volatile, but that for the first time we have a multitude of evidence pointing directly to a strong F1999, rather than just the potential for it. I think the stock is priced as if the company is in jeopardy of filing for bankruptcy, while the news points to the likelihood of significant positive cash flow before the company runs out of funds. When cash flow turns positive, with enough titles coming out to give visibility forward, the stock is going up to a reasonable valuation of at least 1.5 times anticipated revenue for F1999... which looks to beat 80 million if games come out on time.
Truly Optomistically for the first time since Pearl Harbor Day,
Snake |
