2006 Predictions 5 and 6

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5. Ringtones implosion accelerates, as one of the shortest boom and bust cycles becomes clear to all.

6. Gizmondo withdraws from handheld gaming sector.

Gizmondo must be one of the big failures of 2005 and I’m really, really (no, really!) puzzled as to what the hell’s going on there and why they seem to have access to so much money.

Firstly, they want to take on incredibly strong incumbents in the handheld sector, Nintendo’s GameBoy and Sony’s PSP. Not to mention N-Gage, that was patently struggling, despite the might and distribution strength of Nokia behind them. Why on earth would any company want to try this with limited resources?

Well, if the product was competitively priced, had a bunch of extra features and crucially, a range of great must-have, exclusive games, they may just stand a chance. But no, the games portfolio was shite and limited and it was more expensive than the entrenched incumbents.

And their distribution strategy in the US was laughably to hang out in a few malls.

Were their senior execs contrite and modest in their demands while overseeing this fiasco? Did they hold back their salaries for when they could demonstrate that this unpromising approach had worked? Not a bit of it! Salaries included several million dollars of cash and options and luxury $250,000 dollar cars.

Then we have loads of corporate shenanigans including buying companies owned by directors and paying off privately incurred legal bills. Admittedly, some of these actions were corrected, but why were they allowed to happen in the first place?

And did we mention “legal, accounting and consulting costs” in the first six months of 2005 of $75 million? And a net loss of $220 million in that period?

Pretty bad stuff – what next? Maybe some of the directors were a bunch of convicted white collar crooks that investors has entrusted their money to? Err, yes actually. On this discovery, they resigned.

Someone do the decent thing and put them out of their misery. No one can really believe that this mess can be saved. Can they?

So, Prediction 6 – Gizmondo must die.

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