<<< 1) Is GTIS primarily a distribution company or do they develop lot of their own games. It seems to me that they do both but I don't know what the split is in terms of the company focus/resource.>>>
To understand their business it helps to know some of the history. Typically GT was primarily a distributor and they were very good at it. They were the guys who arranged the shelves at your local Walmart and the like. They had a lot of pull with the retailers they worked with. They even stocked Win95 on some retail shelves back when it was released. Then Walmart decides to cut out the middle man and GT realizes it is time to shift focus. They had already began that process before Walmart announced moving away from hiring a shelf stocker. That's when they began acquiring and supporting shops like Cavedog, Wizard Works and Humongous. They want to be the creators of the title. Has worked out successfully in some instances and miserably in others.
<<< 2) The new Disney guy --- was he brought in to bring some professional mgmt in general, beef up the distribution or straighten out their Product Development side? Or all three? I imagine he will be able to license Disney characters through his connection?>>>
I don't know why people are tying this guy to Disney. He used to work for Disney. In the Magic Kingdom, those who abdicate are usually sent to the gallows. If he licenses Disney characters he is probably going to be paying the same premium everyone pays.
<<<3) Why is the GTIS Receivable & Inventory figures look so terrible?>>>
Tradition? That's all we've been able to figure out. However, estimating supply and demand in this biz is tough. You never know exactly how something is really going to sell and whether the customer is going to want to keep it.
<<< Is there a big write-off potential here which will kill future
earnings? For a company that made good profit last quarter (over 30 million I believe, their cashflow sucks --- where is it all going?)>>>
It's easy. They spend every dime they make to acquire someone or something. This doesn't help you when you're bleeding red ink. As for a big write-off...it's anyone's guess but if it happened I would not be surprised.
<<<4) I looked at Midway (MWY) and this company appears to be bette managed.>>>
Sigh...I don't want to go into this. GT and Midway just got through slugging it out in the courtroom.
<<<Certainly their receivables & inventory is lot cleaner than GTIS
and their valuation is quite reasonable. What do you think of MWY?>>>
That their games suck...
<<<Are they mostly creative/product development shop? Or do they also directly distribute/sell games?>>>
I would say the former.
<<<<My last & perhaps most important question to raise concerns Inte rnet & distribution. It seems to me that Games are a perfect product to demo & sell on-line through e-commece oriented Web Portals like Amazon.Com. Is GTIS pouring $$$$ to create their own Web Site to market their (and other licenced games) software games? Or are they actively trying to engage in strategic alliances with companies like Amazon, Egghead, etc. that can drive their sales through the Internet.>>>
Demo, yes but buying...not so fast. Most of the retailers still have pretty liberal return policies and games have a very big turnover ratio. I don't know about anyone else but when it comes to spending $40-$60 on a game I want to be able to return it easily. Mailing it back etc. is just a pain. I know Amazon does sell computer games but their really is no price break from shopping with them and going to your local retailer.
<<<Right now there is a big push towards more bandwidth (witness AT&T/Cable deal, ADSL, @Home, Wireless etc.). Everyone will eventually have broadband access to the WWW and when this happens, I see incredible opportunities for game developers as all kinds of new markets open up.>>>>
It depends. I for one would not pay $50 a month so that I can push Duke around a little bit faster on the internet. If they can bring ADSL to current single line POTS pricing then you're right. However, even at 56K there is a lot game developers can do. Witness Everquest.
<<<I imagine 90% of GTIS's revenue is still coming from the Bricks & Mortal retail stores?>>>
Probably. But that's ok. GT doesn't pay for the overhead so who cares. The game is either going to sell or it isn't regardless of how they distribute.
<<<How many of their own stores do they operate & what % of revenue is derived from their own stores?>>>
GT has not nor ever has owned their own stores.
<<<I sense a seismic shift & ballooning market opportunity (primarily as the result of Internet technology) and there may be some BIG winners among the players you & I have mentioned.>>>>
Well, we've heard it all before. Internet gaming has been going pretty strong for years and we've yet seen the game sector run itself very well. Did you know that you can actually release a really crappy multiplayer game? Yep, it's possible.
<<<The key is to pick the right MicroCap which will win out.>>>
The key is to sweep out the deadwood as fast as possible. The big players such as LucasArts, GT, Sony, Activision and a couple of others are eventually going to have to "duke" it out. Too much crap and too few buyers for it. |
