Although the release date for the Phantom has been pushed back to spring 2005, the first on-demand gaming console system continues to gather steam with a new retail strategy and a robust roster of publishing partners that bring hundreds of game titles to the table.
Originally slated to launch in November, Infinium Labs made the decision to postpone Phantom’s rollout until spring in order to benefit from a less crowded retail market and a cheaper ad-buying quarter. The move is also designed to more effectively play into consumer spending plans. According to Infinium president Kevin Bachus, in-house research shows that most folks are planning to buy the system for themselves or their family, rather than giving it as a gift.
Interestingly, Sony is adopting the same strategy for its PlayStation Portable handheld system. The PSP will roll out in March so as not to go head-to-head with Nintendo’s DS model, which is likely to score higher on the gift-giving charts since it targets kids.
Building for the launch, Infinium plans to beef up on the content side, adding to a list of 22 publishing partners that already includes heavy-hitters such as Vivendi Universal, Atari, Legacy Interactive, Eidos and educational software giant Riverdeep. Several more deals are in the works, but it’s slower going than the company originally anticipated because Infinium is spending a lot of time working through distribution rights. With so much of the industry’s output stemming from licenses, particularly in the kids arena, it’s been a challenge to work out who has the rights to distribute the games for an on-demand service since many of the original licenses were signed before these kinds of systems had hit the mainstream.
Because the Phantom is a subscription-based system with no inventory or overhead, Bachus says it will be much easier to offer kids titles that often don’t get a lot of shelf space at retail. Although game purchases will still take place in a password-protected parent area, the Phantom has a kids-only corner that spotlights E-rated and educational titles and offers free game trials.
The Phantom will initially be distributed exclusively in one mass-market chain and one specialty gaming outlet, and retailers will receive incremental revenue on the consoles, subscriptions and games.
Retailers have traditionally refused to stock on-demand games while the titles are still available for consoles, meaning a lag time from six months to a year. ‘What we’ve done to combat this problem is follow the cell phone model,’ says Bachus. ‘So if a retailer activates a subscription, they get a piece of everything that customer does. It’s very exciting for them because it’s recurring revenue, and it’s predictable. And getting the thumbs-up from the retailers means the publishing community can give us their new stuff when it’s released at retail.’
Phantom’s pricing model also borrows from the cell phone world. The US$199 purchase price for the hardware is free with a two-year contract. A monthly fee of US$29.95 gives customers access to a basic set of games (similar to basic cable), as well as demos, community features like message boards and a broadband library for both timed rental and permanent purchase.