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Interview: Kevin Bachus On The Fall Of The Phantom
Interview: Kevin Bachus On The Fall Of The Phantom Exclusive
April 17, 2009 | By Brandon Sheffield




Game executive Kevin Bachus rose to prominence as a product manager for DirectX, and wound up being one of the four major creatives behind the original Xbox console for Microsoft.

From Microsoft though, Bachus went on to become CEO of Infinium Labs, maker if the ill-fated and much-maligned Phantom console, which aimed to make PC gaming easier to bring into the living room, but which never came to market.

Former CEO and founder Timothy Roberts was accused by the SEC of stock manipulation, and the company diverted into creating a 'gaming lapboard' peripheral.

Recently though, the renamed Phantom Entertainment has been on the attempted rise, trying to get new investments and interest in a new iteration of the console/PC hybrid model.

At a recent event, and just before the launch of OnLive, which addresses some of the goals that the PC-based Phantom was aiming for at one point, Gamasutra caught up with Kevin Bachus.

Bachus actually resigned from the firm back in 2005, and in this interview, we find out what he's up to, and get a few more details about the many trials of Infinium Labs.

What have you been doing since your time with Infinium Labs?

Kevin Bachus: Well, I kind of have taken the last year off. So now, I'm kind of trying to reconnect with the industry and kind of get a sense of what's going on and what the big challenges are, that sort of thing.

I'm curious to know what you think, having previously been in charge of Xbox, how do you think the three consoles are sort of doing in terms of their online experiences because those seem to be the main differentiating factors right now?

KB: Well, I think that in general, what we're seeing is what you'd expect to see at this stage of any console cycle, which is that the three systems have matured and they have all sort of staked out their particular niche or their particular territory.

I think that Nintendo clearly has done a fabulous job of reaching and embracing a segment of the population that maybe historically hasn't thought about playing games. I think that's great for all of us.

It's driven a much healthier industry, financially speaking, that allows publishers to invest in bigger games and more compelling games that are enabled by this generation of hardware on the other systems. And so, I think that's fantastic.

I think Microsoft continues to innovate in the area of different types of online gameplay and enabling publishers to do things in a consistent way, in an easy to understand way, and in a way that's really focused on what the gamer wants.

I think that Sony has done a really admirable job of raising the bar from a technology standpoint. I suspect that -- although you can never really know for sure -- they were wounded when Xbox came out right after PlayStation 2 with arguably more powerful hardware. I think that they responded by trying to produce the best piece of hardware possible.

Along with that comes the challenge of the price point, the challenge of having sophisticated development tools. But there again, I think that all the criticism that was leveled against PlayStation 2 and all the praise that was given to the first Xbox because of the maturity of the development tools challenged them to do a better job this time around.

This is why I think you've seen very little griping from developers about the complexity of PlayStation 3 despite the very powerful Cell chip and the different architecture it poses.

I've actually seen some griping.

KB: Not as much as ... Remember how it was last time? It was off the charts.

How do you feel about [Phantom Entertainment] kind of trying to start up again? They sent out a PDF trying to get more funding again.

KB: Sure, that PDF has been sent to me about a hundred times by about a hundred different people. Well, it's hard to say. I've not really stayed in touch with anybody who's still at the company, and so I only know probably about as much about it as you do. I guess that on the whole, I wish them nothing but success.

I think that for me, there's kind of an empty place in our heart where Phantom should be because there was tremendous skepticism about the system and a lot of joke-telling and a lot of criticism.

In some cases, there was also some bitterness and nastiness that was directed at the product, which is unfortunate because for those who actually spent the time to get to understand what we were doing and looked at it, I think they saw something that probably was pretty cool.

Maybe in a way, it was a little bit ahead of its time because it was attempting to make the whole process of accessing games easier and therefore more accessible to a broader audience.

I'm not naive enough to think that it was on par with what Apple has done with the iTunes store and applications for iPhone, but on a much, much smaller scale, it was trying to address the same opportunity that Apple saw.

There's a large number of people who have a passion for games but don't consider themselves to be gamers, don't check out the web sites, and don't haunt Best Buy. They don't know what's worth their money.

I think the idea still is very sound. I think that it's unfortunate because one of the things that I really reflected on when I left the company was that to some extent the business was unfinished. And more than that, I realized that if the product never came to market, there would probably be a lot of people that would have said, "Well see, that just goes to show you. It was never serious, it was never real; there was never anything there."

The truth is quite the opposite. The product was tantalizingly close to coming to market. But there was so much momentum that was difficult ultimately to overcome. I think that it sort of was a case of self-fulfilling prophecy.

A lot of people looked at it and said, "Well, there's gotta be something else going on. There must be something behind the scenes, something nefarious."

And so, they looked at evidence selectively, including the fact that the product still hasn't come to market as evidence to prove their point. In fact, what they were doing was continuing to make it harder and harder for us to actually ship the product that we had already designed, built, and lined up content for with retailers and all that.

Although, there were a couple of quirks involved, ultimately, and the founder being brought up on various charges. He was kind of a crook.

KB: So, you're talking specifically about the company's founder (Timothy Roberts), and I don't have enough insight... You know, almost all of that played out after I left the company. While I was there, there were initial allegations. He left the company, and we certainly did everything we could to respond to the request that the FCC was making, but I really honestly don't know very much about how that played out.

Somebody told me that there was a fine and some other restrictions that were imposed, which doesn't necessarily imply that he was ever guilty because if there was a settlement -- often times you reach a settlement because it's just easier to do that than to go through the hassle, costs, and time of a trial.

So, I don't know what to say about that. It's also difficult... It's easy to throw around the term... I don't want to defend Tim either. I'm in an awkward situation here trying to explain my removed perception of it, and I don't want to be an apologist for him because I just don't know the situation.

But just to give you an alternative perspective, you'd have to kind of dig into what his motives were for the things he was accused of doing. Was he doing it simply for self-benefit? Was he doing it because he thought that it would in some strange way help the company?

Was he doing it in a way because it would help the company and also enrich himself? I don't know. But I think without really knowing the details of the situation, it's kind of inappropriate to jump in and say, "Well, the guy was a crook."

Again, it goes back to what I was saying that there was this perception long before I even jumped the company that the company must be a swindle -- "it has to be; it can't possible be doing what it was doing."

From my perspective, it absolutely was doing... You know, we built the product, we built the network, we acquired the games. Like, all the stuff that we talked about, it was all real. You could touch it, you could try it, it was ready to be manufactured.

But our funding situation was made complicated by a number of things, not the least of which was this lingering perception that, "Well, you know, they must be crooks." So, it's not as easy as just saying, "Well, he was accused of these things, and he settled, so he's a crook."

There's a lot of stuff that you have to look at, which is why I've tried to move on from that and not really try to figure that out.

So, I guess the Phantom is not something that you would be interested in revisiting necessarily?

KB: Me personally?

Yeah.

KB: Well, how do I answer that? I would really love to see it come out. I would really love to see it come to market. From a personal satisfaction standpoint, I would love to see that happen. But on the other hand, I've sort of imparted that already.

And so, to some extent, I'd have to go backwards in order to go forwards. For me personally, to try to answer your question, I feel like I've sort of already tried to tackle that mountain, and I don't really feel like I had to sort of reach the summit to feel fulfilled. I'd love to see it come to market.

And also, the company has changed. It's not even the same people anymore. So, you can't really go back to a moment in time. If I could go back to a moment in time and say, "Okay, well, look, here's a check for however many millions to start the assembly line." Would I do that? Oh, I'd do that in a second. You bet. But would I do that now, that's a complicated question to answer.

What are you looking to get into, going forward?

KB: Well, there are two things I've done ever since I left Microsoft in one form or another. One is to try and figure out a way to reduce the cost of production without affecting quality. You've heard about it constantly at DICE.

John Riccitiello said it well -- the only thing that's increasing faster than this industry's revenues are its costs. And I've seen that for more than a decade. I think that it's not healthy, and I've done a lot of things over the last several years to try in one form or another to provide solutions to that.

The other thing that I've done, and Phantom certainly fits into this category, is to increase the audience for games, for the reasons that I told you earlier. I think that an industry with a large and diverse audience is an important industry, it's a powerful industry, it's a stable industry, it's an industry that we can all be proud of without challenging the nature of having hardcore gamer's games.

And so, whatever I do, I'm going to continue probably for the rest of my career to try and find a way to do one or both of those things -- to reduce the cost of production without affecting quality, and to increase the audience for games. I think therein lies the key to growth for our industry. And hopefully, I'm not alone in that. Hopefully, there are a lot of people who feel that those are the two big pressing issues for the industry.

What do you think about the future of digital download?

KB: Well, clearly, it's the way forward for the industry. Will it entirely replace physical packaged goods? Probably eventually. But the challenge that we have is that as human beings, we're kind of hard-wired to value tangible things. It's just in our DNA, it's in our base monkey brains.

You look at a chair, and it has value. You think about a song or a story, and we're just not wired to think about that thing as having the same kind of value that a physical objects has.

This is why you hear over and over and over and over about how people who would never in a million years even think about shoplifting a CD, think nothing about downloading the music that's on that CD illegally. It's because the physical form has value.

And so, to really make the packaged goods software industry disappear, you'd have to sort of assume that there's a segment of the population that no longer feels that that's valuable. That said, there's no question that that time is coming, and you will start to see retailers transition away from software sales to hardware sales.

They'll become the primary distributors of hardware. And even then, hardware will potentially fade into the background as well at some point. It's very, very hard to say. The one thing that I can tell you is that whatever most people in the industry think that the industry is going to look like in five years, it's not going to look like that.

I don't know how it's going to look, but it will be different than what we think. And that's the cool thing about it; you go along and see an idea, and you improve on that, and somebody else improves on that. It's a constantly evolving, very, very dynamic, very innovative industry. That's what I love about it.

Anything else you want to say about Infinium?

KB: Being inside the company, I think we were all very, very surprised by how intensely some people followed the company, really examining things.

What was really remarkable about it was that when I would read certain things that people would forward to me or web postings or things like that, what was really remarkable was how extremely good at finding details and how extremely poor they were at analyzing them.

So, somebody would find some little tiny nugget of information buried somewhere -- which was amazing that they found this tiny nugget of information -- but they would look at it in isolation and draw conclusions from it that were completely wrong, which was often times amusing, sometimes irritating, generally just baffling.

But, I certainly learned a lot from them. You know, I don't regret being part of that company. I regret how things turned out. I really feel that they should have and could have turned out a very different way, but you know, it just is what it is.


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Comments


Yannick Boucher
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Looks like SOMEone hasn't had enough kicking back and burning venture capital ! :)

Kevin Bachus
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Thanks, Yannick. You illustrate one of my points perfectly.

M. Smith
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I think the bitterness towards the Phantom was due to promises that seemed too high combined with the lack of any big, beefy company with tons of capital behind it. Hell, the Xbox had its fair-share of pot-shots taken at it and in its day, and you had Microsoft's infinite money-train behind that project. Gamers love to rag on stuff, and companies trying without a track record trying to debut ground-breaking products are a good target.



OnLive is a great recent example. There is a ton of negativity about that service right now because people feel that OnLive is trying to pull one over on them, that what they want to do isn't really going to work like they say.



But I'd say I agree with that, actually - I think that OnLive is making a lot of promises that are, uh, exaggerated, and they deserve some hostility for that.

Brian Harris
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"This is why I think you've seen very little griping from developers about the complexity of PlayStation 3 despite the very powerful Cell chip and the different architecture it poses."



You and I must be talking to two completely different sets of developers. Everyone I've talked to who has worked with both systems say, "why bother?" with the PS3... then they look at the 21.3 million install base and say, "damn, I guess that's why :-("

Jake Romigh
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Interesting article.



I'd like to put my two-cents in on the whole "digital download" bit. I know this was NOT an article on digital theft and only had a small section on it, so I'm going to try to keep that discussion to a minimum so the comments aren't flooded with the usual debate this brings.



Digital downloads (or some form of it) are is really the step forward in game ownership, I agree with Kevin. I do agree that hardware has a tangible value to it that is reassuring to an owner. Through college, I didn't use digital downloads because I feared the loss of my hard backups. Nowadays, though, buying digital software makes it easy to re-install and keep upgraded, amongst other incentives, so I usually tend to only buy digital downloads now.



What I disagree with, though, is that this "value" is what is preventing software pirates from stealing from brick and mortar stores. It's the ease of getting caught. Stores are much more easy to be caught in than Bittorrent sites. It is so easy to steal digitally that it is alluring to do so.

steve roger
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You say nothing, but you tell me everything.

Kevin Bachus
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Brian, it's a question of degrees, not absolutes. As I told Brandon, my point was not that the PS3 is EASY to develop for ... just that's it's EASIER than PS2, thanks in no small part to better tools, better code samples and better support programs that were not in place for the launch of PS2. Sony has historically had a different philosophy and approach to platform development that prizes raw horsepower over easy of development -- the assumption being that if you're skilled enough to develop a AAA console title you'll figure out a way around the hurdles. We recognized that Microsoft had an opportunity to exploit a mature, robust, well-documented architecture, programming interfaces and toolset in order to appeal to the technical side of the major developers and publishers and help overcome the skepticism on the business side of the house around the launch of Xbox.



Jake, you raise an interesting point but I guess I'd like to think that most people are motivated by an internal moral compass that helps them distinguish right from wrong, not by a fear of being caught. I just don't believe that moral compass is developed enough to encompass intangible things like digital data. I think it's somewhat cynical to say that shoppers might steal packaged software if they thought they could get away with in. In my own experience, I find that most people who download warez or MP3s really don't believe they're doing anything wrong -- even when presented with the possibility that they might get caught by the MPAA, RIAA, etc. They just don't see it as stealing -- more like copying, since the "original" still exists on a server somewhere -- whereas taking a physical disc from a store IS stealing in their minds.



Edgar, you're just too cool for words.

Jake Romigh
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Kevin,



Very good point with the "original still exists" comment, which I have also seen as a motivation (or, if you're cynical, as an excuse). I have also seen the other side of the argument. This issue is very complex, for sure. I'm still in the camp of "If you use something you didn't pay for the right of using, that's called 'theft'", but I know for a fact that is not the only viewpoint out there.



I think you're implying the same thing, if you are to mean that a digital copy has the same "value" as a disc from a store. Couldn't agree more, if that's the case.

Kevin Bachus
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Yes, I'm certainly saying that. But I'm also saying that there are many people who don't see it that way -- and it has to do, I believe, with the way that we as human beings view the tangible vs. the intangible. For them, "stealing" a digital copy of something is like stealing the air. They can't see it, they can't touch it... it's not the same as stealing a physical object in their minds.

Brian Harris
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The basic problem is that product costs consist of 3 major components: R&D, production, and shipping. Consumers place high value on production and shipping, but pretty much 0 value on R&D. To use the car analogy, pirating a game or downloading a song is like building an exact replica of a Honda Civic using all of your own parts. Nobody in their right mind would do such a thing because the raw materials, tools, and time required would not make it worthwhile. On the other hand, if someone were to offer a 'kit car' that would allow you to build a brand new Honda Civic in your garage for $3000 in parts plus 10 hours of time, I guarantee you many thousands of people would do it. The entire point of DRM is to raise the cost of 'parts tools and time' above the cost of the product itself.

jaime kuroiwa
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@Kevin



I hope you can clear this up for me. Are OnLive and The Phantom similar products? The Phantom seemed to be a digital download service with a dedicated PC, while OnLive is a realtime streaming service. They are both very different approaches to digital distribution, and I don't think they can be placed in the same category.



Perhaps this is the sort of "nugget gazing" that resulted in The Phantom's downfall, but I really didn't understand the question that The Phantom was answering at the time. I wasn't concerned about ownership of the games as much as the reason for having a system that behaves very much like a PC.

Kevin Bachus
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Hi, Jaime. What a great question.



I've been amused by the occasional comparison between Phantom and OnLive, because like you I see very few similarities other than a shared effort to augment traditional packaged goods distribution. But I guess the industry likes shorthand.



You are entirely correct. Phantom was designed to run games locally -- to download and cache the games on an embedded hard drive in the device, not to execute the games remotely and stream the audio and video in a "dumb terminal" type approach.



When we first demonstrated Phantom in 2004, broadband speeds would have made remote rendering impossible. As it was, we were somewhat concerned about the penetration of broadband in any flavor, let alone speeds measured in Mbps.



As I understand it, OnLive is primarily trying to break the console upgrade model and to essentially "future-proof" your gaming experience by ensuring that as technology evolves their servers -- and not your local device -- improve to keep pace.



What we were trying to do -- and hopefully this answers your second question -- was to provide an alternative for the millions of folks who at one point had been active gamers but just didn't have the time to pursue (or a lifestyle that allows for) gaming as a hobby. I can't tell you how many people I know who used to play tons of games but just don't hang out at Best Buy, don't read Game Informer, don't check out Kotaku -- so they don't feel comfortable buying consoles or spending $50 on a game anymore. But they WOULD play if they whole process were more convenient.



As a result, Phantom probably wouldn't be for you. But I bet you could think of a bunch of people who WOULD subscribe to a service that let them try out and buy games they liked without even leaving home.



Remember, this was five years ago. Before the casual games explosion. Before the Wii. Before Facebook apps. At that time, the industry was almost 100% focused on hard-core console gamers, but I think a lot of folks in the industry, including us, saw a huge untapped market among non-traditional gamers that eventually exploded into the wide variety of content you see now. We were just trying to move it into the living room, where most people prefer to be entertained.



And no, that's not the sort of "nugget gazing" that made our jobs harder. The problem we had was that certain segments of the gaming population were so certain it was all a scam -- and they made their opinions known so loudly -- that every time we met someone new (retailers, publishers, etc.) we had to work twice as hard to rebut all the nonsense before we could actually get down to business. Questions about our potential for success were entirely reasonable. Questions about our intentions or our motivations -- backed up by so-called "evidence" -- ultimately became a self-fulfilling prophecy by just weighing us down that much more.

steve roger
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You say you don't know much about the PDF as "anybody." You don't have "enough insight" about the company's founder. But you did leave the company after only three months as the CEO to "pursue other interests." This is why I said you say nothing, but you tell me everything.



I think you had good reason to leave Infinium Labs. I am willing to bet you broke your back trying to get the Phantom to market. However, the wreckage you inherited from Roberts was too great to overcome. You even had to sue the company for unpaid wages.



So when, I said that you say nothing and you tell me everything. I mean that you probably can't say much legally, and worse you don't want to recall all the horrific details of your experience with this company. Surely, the idea of this Phantom PC was dream, but living it was a nightmare.



And you say that all new people have come into the company, but we can tell that not much has actually changed. Millions of dollars have been raised based on promises that have not been delivered. Just like the pc/console was aptly named so has the lapboardmouse and game service been branded--devices and services that have never materialized.



However, I think that the idea yellow journalism was what broke this camel's back is really stretching it. The history of this company reveals what can only be called a financial wasteland and despite all the bad press, it still finds investors.

Kevin Bachus
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I'm sorry you feel that I was somehow evasive. If there's a specific question you have, by all means ask it. If I know the answer, I'll give it to you. But if I don't, I'm not going to conjecture.



The fact is, I've had no interaction with the company since I left 3 1/2 years ago. The PDF Brandon was referring to only started circulating last fall and I only knew about it because mutual acquaintances thought it would be amusing to send it to me. So yes, I only know exactly as much about the company's current plans as Brandon does. I didn't say I had no insight into the company's founder -- I said I didn't have enough insight into the charges leveled against him and how they were eventually resolved because 90% of that drama played out after I left. And while I did take a job with another company three months after being promoted to CEO, that was almost TWO YEARS after I joined Infinium in the first place.



I'm not going to argue on behalf of the company -- I CAN'T argue on behalf of the company. It's been years since I talked to anyone there. And while I'm not sure why you're implying otherwise I can tell you it's simply a matter of fact that as far as I can tell no one I worked with at the company is still there.



But if you think I was saying that "yellow journalism was what broke this camel's back", you need to go back and re-read the interview. I never said that innuendo and speculation was solely to blame for the company's inability to get hardware to market. But I lived through a professional challenge that was made immeasurably harder by that innuendo and speculation.



All start-ups face difficulties. At Infinium, we knew we were taking on a big challenge from the outset. That's part of what I was attracted to. But every day I saw how that challenge was multiplied by reckless assertions from people who were not in a position to understand the implications of what they were alleging.

steve roger
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I wasn't saying you were evasive. I meant you were being prudent by not saying the obvious: this company shouldn't be touched with a ten foot pole. I wasn't asking you to argue on behalf of the company. In fact, I totally feel the opposite of that. I basically wrote that you were in a tough situation and were in a no win situation before you started. Read it again. I know you were COO before you were CEO. I said that on purpse, you left hastily after getting into the driver's seat, seemingly just before the Phantom should have been released. I even remember you on G4 with it. The only actual criticism I had was when I said "however." The interview does make it seem like the press killed funding opportunities. Do you really want to answer this question: did you leave because you couldn't get the company to deliver on its promises due to things beyond your control? I don't think you have too. But it seems like you are trying real hard to get me to ask you. You totally misread what I wrote.

Paschalis Agnostos
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"For them, "stealing" a digital copy of something is like stealing the air. They can't see it, they can't touch it... it's not the same as stealing a physical object in their minds."



Well, "stealing" in my mind implies that the one who got something stolen doesn't have it in his posession and cannot use it anymore. So getting a digital copy of a game without paying is illegal and illegitimate but it is not the same as stealing a physical object. There has to be a difference in our viewpoint regarding this things, otherwise you get all tangled up when it comes to selling used games and lending bought games to friends etc.

Kevin Bachus
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I'm sorry if I misread what you wrote. A forum thread is hardly the most ideal place for conversation. But you are most definitely saying I've been evasive -- you're just being exceedingly kind now about the reasons behind the presumed evasion. And I'm telling you I'm happy to answer a direct question with a direct answer.



Brandon asked me a few very broad questions that touched primarily on how I FELT about certain things, and I answered his particular questions to the best of my ability. If he had asked me, "Why do you think Infinium failed to bring a product to market?" or, "Would you advise someone to invest in the company now?" I would have made an honest effort to answer those questions as well (although being completely candid, aside from a fair amount of skepticism myself I don't know enough about what's going on there now to answer the second question really truthfully). But that's not where this particular interview happened to go.



But back to my feelings, one of the things (but not the only thing) I do feel about Infinium is that it never truly got a fair shot because of the cloud of suspicion that hung over the company from before we even joined. And yes, I'm telling you without a doubt that the press did in fact kill some funding opportunities that could have started production. Let me say again: the press was not the only problem the company had, and some of the negative press may have been well and truly warranted. But make no mistake, there were funding opportunities that failed to materialize because unfounded accusations gave some institutional investors pause. Raising money is hard. Investors are by nature very cautious. Inappropriate speculation can make a difficult challenge just that much more impossible.



You challenge me to answer the question, "Did you leave because you couldn't get the company to deliver on its promises due to things beyond your control?"



The answer, in a word, is: no.



If that had been the case, I would have left the company a year earlier when the company first failed to deliver on its promises due to things beyond my control. Instead I spent more than a full year doing everything in my power (and even some things not in my power) to make something happen -- out of a sense of obligation to the team that I'd recruited, to the shareholders who'd been enticed by my reputation, and to the product itself.



Deciding whether to leave or stay at a company is always an intensely personal decision and my reasons for leaving the company were certainly highly personal, including (but not exclusively) the fact that I'd been approached independently with another opportunity that I found more personally satisfying.



So what else can I tell you?

steve roger
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My first comment was just a play on the first comment of this comment section. If I had put a :) at the end of it maybe you would not have misinterpreted what I wrote. It must have been enormously frustrating not to be able to ever get the Phantom out the door. If it did, I wonder if I would have bought one? Maybe, because I am an early adopter and buy everything else. Regarding the press, I think you need to point the finger at Roberts. It was his checkered history that drove that bus. Once that initial story hit there was no going back. That plus the unfortunate product name. I realize you are saying that the negative story interferred with funding but I took a look at the history of released financials and it seems like the company, despite the press, was able to garrner a sizable amount of money. It seems like a combination of things, a perfect storm, perhaps resulted in not having the money to pay for manufacturing and distribution just before you left. Was there a make or break moment that you came to where you realized: this just isn't going to happen? Because it seems like all of the sudden the Phantom console disappeared and the keyboard thing was born. Did the company abandon the console before you left? What was the reason for that, if you know? Also, what was your plan on how to manage the problem of obsolescence; was that problem going to be built into the price point (by keeping the console low in price, taking a loss and counting on the income from the software service)?

Kevin Bachus
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Good questions.



The financials are a prime example of people seeing but not understanding. Because the company is public, it has an obligation to take into account the market value of all stock issued, not just cash raised and actually spent for operations. I'm with you on this one -- it is confusing. I'm not an accountant (but thankfully we had very good accountants who did understand how these things had to be presented) but I can tell you as a product guy that the amount of actual cash we raised and spent on operations was a tiny, tiny fraction of the losses reported.



Regarding your second question, actually believe it or not there never was a "make or break moment" where I ever thought, "It's all over" for the company -- there was just a moment when I decided it was time for me to move on. Quite honestly when I left the company I know it still intended to produce the hardware system at some point (I really object to the term "console", btw). It was just a question of timing.



My decision to offer the lapboard separately was a means to an end, not an end in itself. I recognized that fundraising for the full service was taking longer than we hoped and I thought that since the capital required to build just the lapboard would be smaller and probably easier to raise, selling the lapboard would generate revenue that could help fund the launch of the service, restore investor confidence in the company, and demonstrate that we could execute (albeit in a limited fashion). Whether people loved or hated the concept of the service, they all seemed to like the lapboard. So after wrestling with my belief that we needed to keeping it proprietary as an additional incentive for people to buy the hardware and subscribe to the service, we ultimately decided to offer the lapboard first and then introduce the service later since the audience for a lapboard by itself was probably different from the audience for a games on demand service anyway.



After I left it did seem that the company forgot the whole "means to an end" thing and focused entirely on the lapboard as its product. I'm not sure why that was or when that happened. I'm also not sure why it took so long after I left to launch the lapboard. Things seemed pretty much on track when I left.



As for obsolescence, remember that we were drawing product from the PC and the PC world tends to manage "obsolescence" pretty well with scalable content that encompasses a pretty wide scope of hardware. Our expectation, based on our introductory spec, was that we would be able to offer an extremely broad range of content and that over time the user's experience with only the most demanding brand-new applications would gradually degrade in a way that didn't compromise gameplay -- just like buying a home PC -- but that the back catalog library would have continued to be compelling particularly for our target audience. At some point we probably would have introduced a higher-spec system and users could have traded up if they desired. My guess is that the experience would have been fine for most of our potential target audience for many years.

steve roger
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Sorry for being flippant. I appreciate your candor and thank you for answering my questions.


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