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Technology Stocks : GTIS - Will it be a Phoenix or not ?

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To: Robert Floyd who wrote (1797)3/17/1998 1:55:00 PM
From: Scott Miller  Read Replies (1) of 2319
 
>>> 1. Wouldn't game producers always be pumped-up about their projects. Are they objective enough? <<<

It's pretty easy to read between the lines of what they're saying. Plus, most producers I know are quite frank with me, in an off-the-record way.

>>> 2. Would these producers be honest with you if they were able to acknowledge problems? <<<

Yes, as has happened many times.

>>> Would you be able to share any of those problems with us without violating your insider trading rule, or would you only share the good news (or more probably just your impressions that things are going well)? <<<

I could share some problems, but I'm friends with these game companies and will not express these problems publicly. If I do that to their games, they will be more inclined to bad mouth our games. Professional respect for competitors comes into play here.

>>> 3. Do good "vibes" about a product usually translate into success?

Good vibes are certainly a better indication of success than bad vibes. ;)

>>> Are you confident these producers know what will be a successful program?

The producers I know at GT are very good--I don't know them all though, so I can't make a blanket statement.

>>> Do they typically run these games buy a test sample...

Test groups are used.

>>> 4. How many successful programs (let's say top 20) do you think GTIS needs to be a successful and profitable company?

This is not a reliable way to look at things. One ultra-super-mega hit, like a Myst, can keep a company afloat for years (depending on the size of the company and how wisely they spend their profits). But there are simply too many variables involved to boil it down to a number of top 20 hits.

>>> What fraction of these need to be produced in-house at GTIS? When making your determination, please consider G.O.D. will be making the profit margins on out-of-house products shrink. <<<

Since the first part of your question cannot be answered to any reliable degree (without many more parameters), this second part is equally tough to answer.

However, I will say that a publisher that owns brands is better off than one that doesn't. This is common sense. A publisher is better off owning properties that it can continually exploit (without fear of losing the brand, such as when Activision lost the MechWarrior brand), and GT is definitely making business moves with that in mind.

Scott Miller
Apogee
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