More woes for Gizmondo

Parent company Tiger gets an extension on shareholder loans as coffers run dry, bemoans "severe financial pressures."

The creditors are starting to come knocking on Tiger Telematics' door, but the Gizmondo maker's not quite ready for them, according to its latest filing with the Securities and Exchange Commission.

In the filing, Tiger admitted that its "Gizmondo Europe subsidiary has experienced severe financial pressures from various vendors as its cash flow has been unable to service the requirements. This has in part been aggravated by a lack of investor funding. The company has been actively negotiating for further funds from debt and equity sources to assist the cash flow needs of Gizmondo Europe but there can be no assurances that this will be achieved."

Now the company is attempting to secure a short-term loan of $5 million to keep it going until it can secure a planned $75 million in refinancing and further debt. That chunk of change will be used to pay off the short-term loan, as well as $21 million in loans to its shareholders that are already overdue. However, in order to get the extension on those loans, the company had to put up as collateral the intellectual property rights and patents of its Smart Adds service, which forces Gizmondo users to view a set number of ads each day in order to play games on the handheld.

The filing also mentions the settlement of a lawsuit brought against the company by HandHeld Games, developer of the Gizmondo street racing game Chicane. According to the filing, HandHeld had sued the company for more than $200,000 in damages and costs, and then upped its claim to more than $900,000. The settlement was reached for the sum of $175,000.

This is just the latest in a series of setbacks for Tiger. After delaying the US launch of the device several times, the company quietly launched it in a handful of mall-based kiosks around the country and through its Web site. It also had a handful of its executives connected to organized crime in Europe, and most recently, it failed to follow through on its promise to unveil a widescreen Gizmondo at CES 2006, with no reason given for the no-show.

As of press time, Tiger stock was trading at $1.65, down almost 20 percent from its $2.05 opening price.

44 Comments

  • sugreev2001

    Posted Feb 14, 2006 5:05 am PT

    No shocking news,expected from start .

  • winnazdaluza

    Posted Jan 18, 2006 8:11 am PT

    actually seraphim you got it ike everybody else WRONG it's not so much the hardware but rather the GAMES that make the systaem.As far as I am concerned the giz never got of the ground and has been crawling all along.

    The simply had a bad bussiness plan-It looks like they wanted to market it as a game machine, but failed to court good publishers --they then added expensive features.Which just continued to be more of a liabiltiy than a helpful feature(when it comes to manufacturing)

    To make it even worse it did not get it's start from a game friendly area such as japan where lots of developers and publishers reside and lots of customers are die hard there.It also did not have as much money to make mistakes like sony or microsoft.

    Even till the last minute they failed to court good publishers which ultimately killed them because video games is supposed to be it's prime software.They where then forced to hike prices and give out ads just to keep going, ever optimistic of better days ahead which never came.....I feel sad that it never got a chance to compete favourably with DS nor PSP, such a pity.....but better planning is what guarantees success.

  • Seraphim_24

    Posted Jan 18, 2006 7:55 am PT

    There are a few companies that can make this handheld thing work. Most companies should not even bother to encroach on Nintendo's territory here, everyone who has has been ceaten, and bad. The DS is even beating the mega hyped PSP (More because the DS games don't suck than anything else) and history has shown that even if your handheld is more powerful (GameGear, and Nomad both got clobbered by the weakling GameBoy, while NGage got clobbered by the GBA) it does not assure you success against Nintendo.
    I think that Microsoft could pull it off, because like Sony, they have near limitless resources to pump into it. I don't forsee that M$ will enter the handheld arena anytime soon though, not until their consoles are profitable at least. They're loosing billions a year on thier machines right now.
    Sony on the other hand has a handheld that has some great potential but some great draw backs as well. 1st, its way too expensive for the average consumer, especially since the DS and GBA games run about $30, and the PSP games are abour $50, and yet the hand held really can't do PS2 quality, more like Dreamcast quality, which is stll good, but the problem is that the refresh rate is to slow which causes a headache enducing blur to occure in just about every game the system has. Worse yet the system lacks quality original titles. This is similar to the problems the GameGear had back in the day.
    The better graphics the PSP offers do not compensate for the lack of both quality and quantity of titles for the platform. Unless Sony gets it's collective act together they won't beat Nintendo either.
    Getting to the point Tiger should have never bothered with Gizmondo, and NGage needs to admit defeat. With games as expensive to make as they are developers are only going to go where they can make money, and gamers are only going to go where the good games are. This pretty much means if you aren't Nintendo, Sony, or M$, don't bother with handhelds.

  • killa-k

    Posted Jan 18, 2006 7:47 am PT

    that's no good i was really lookin' orward 2 this hand held 2 give the PSP a run 4 it's money

  • Jaster_DCX

    Posted Jan 18, 2006 3:38 am PT

    The gizmondo completeley wiped floor with psp and ds... dannnng

  • mickbradley

    Posted Jan 18, 2006 3:26 am PT

    did the jiz mondo..... i mean giz ever have a chance reminds me of the lynx but even worse

  • ocdog45

    Posted Jan 18, 2006 3:18 am PT

    what is this.........

  • Drizzle

    Posted Jan 18, 2006 1:13 am PT

    No planning, lack of promotion, very little interest. I am not surprised.

  • mithund

    Posted Jan 18, 2006 12:10 am PT

    shocking ! ... i mean c'mon, did Tiger actually think that something called the 'Gizmondo' & a device designed like that would actually sell in a world of Nintendo & Sony ?!?!

  • Mp5slipknot

    Posted Jan 17, 2006 9:10 pm PT

    With the DS and PSP out and both doing well for nearly a year for both, there is no real reason to even bother with this thing.

  • Nintendo_Man

    Posted Jan 17, 2006 6:44 pm PT

    If you can't beat them then join them.

  • jakeboudville

    Posted Jan 17, 2006 6:04 pm PT

    What is Tiger trying to do? Overtake Sony?

  • KREEPYKRAWLLY

    Posted Jan 17, 2006 5:56 pm PT

    TIGER SHOULD NOT HAVE ATTEMPTED THE GIZMONDO PROJECT (THEY HAVE LEARNT FROM SEGA).

  • secily

    Posted Jan 17, 2006 5:05 pm PT

    give it up there tiger, noone will dethrone nintendo and sony from the handheld wars, NOONE will.

  • frogiggy323

    Posted Jan 17, 2006 4:21 pm PT

    At least tiger tried, lost millions in the prosses, bu still tried.

  • mrimkeit

    Posted Jan 17, 2006 3:36 pm PT

    So lame Tiger. Did anyone at Tiger REALLY think that they could out spend Nintendo and Sony? It is laughable!

  • Corvin

    Posted Jan 17, 2006 3:17 pm PT

    Wasn't Tiger the company that used to make those cheap LCD handheld games back around/before the time of the original Game Boy? Anyway, nothing suprising here. Handheld market is still too small and niche to have so many low-profile companies running around with expensive, unproven devices that also make you watch advertisements.

  • evil_dracula

    Posted Jan 17, 2006 3:03 pm PT

    hmm.. I guess here's one more for the island of misfit handhelds.. right next to the Tapwave zodiac and the n-gage.. hope they save some room for the iRiver G10.

  • Joshua250

    Posted Jan 17, 2006 2:46 pm PT

    o.O I forgot that the Gizmondo was released. I didn't want one though, it has a lot of useless features and some cool ones, but nothing I would really want to buy.

  • Ballistic90

    Posted Jan 17, 2006 2:43 pm PT

    Correction, it's the DS, PSP, AND the GBA that killed that thing. Surprisingly enough, the GBA still makes pretty inpressive sales. I have to say though, that the Tapwave Zodiac and the N-Gage lasted so much longer.

  • goatblower

    Posted Jan 17, 2006 2:37 pm PT

    Let's face it with the DS and the PSP. There really isn't a need to buy this system.

  • matttrd

    Posted Jan 17, 2006 2:33 pm PT

    When will they learn?

    You just can't decide to try and play with the big boys.

  • bj91x

    Posted Jan 17, 2006 2:15 pm PT

    So, considering I play my PSP on average of about 30 minutes per week, does that mean that I'd be forced to watch more ads than play games on the Gizmondo?

    And considering that I sometimes go weeks not playing my PSP, saving the games for a trip or something, when I do go on a trip, I'd be forced to watch the ads for all the days that I haven't played? Meaning that if it's a short trip, I may be spending the entire time watching the ads, and not be able to play the game til it's time for me to head back?

    Why did I not buy a Gizmondo?

  • Agreb91

    Posted Jan 17, 2006 1:57 pm PT

    Ok... and they would try to make a handheld with the handheld giant Nintendo and the new comer but yet awsome PSP.

  • JodoMcFatty

    Posted Jan 17, 2006 1:54 pm PT

    WMP does not own AVC but anyhow. It's too bad, I don't really understand why the small companies do this(ie Infinium Lab with the Phantom)

  • AA7

    Posted Jan 17, 2006 1:49 pm PT

    Poor Giz. Cool ideas but it never stood a chance. RIP.

  • Petri87

    Posted Jan 17, 2006 1:30 pm PT

    Gizmondo is great(have one, got it for only 150bucks) but it needs more games. The multi media features are far superior of the ones found in the PSP since its WMP based. Its great for watching movies and so on.

  • Donkeljohn

    Posted Jan 17, 2006 1:26 pm PT

    All hands. . . abanDON ship!

  • darth-revan

    Posted Jan 17, 2006 1:25 pm PT

    well its official, go against nintendo and your shooting yourself in the head. the only companies who really have a right to go into handhelds are the big console makers like sony, microsoft, and nintendo and even sony is ahving a really ahrd time fighting nintendo in the handheld turf....

  • ghsacidman

    Posted Jan 17, 2006 1:15 pm PT

    So, what you mean to tell me is.... people aren't interested in a GBA wanna be with a GPS that costs way too much even though it forces you to watch ads? Why would anybody not want that? Oh yea, thats right. Because DS and PSP don't do any of that and actually have games worth playing. My bad. What really gets me is, has anyone seen this thing for sale..... ANYWHERE??? I mean, besides online? Has anyone seen an ad on TV for it? Most people don't even know this exists. It's just a shame that a company like Tiger, whos been around for a good minute, could make a huge mistake like this.

  • katriv2

    Posted Jan 17, 2006 1:08 pm PT

    [This message was deleted at the request of the original poster]

  • katriv2

    Posted Jan 17, 2006 1:08 pm PT

    mistake to introduce a new gaming system at this stage in the console/ handheld wars. Kinda funny that tiger would introduce gizmondo at this time, with no real experience in videogames. LCD games don't count as experience in the current market.

  • mattxavier

    Posted Jan 17, 2006 1:06 pm PT

    The Gizmondo suffered against the N-gage, the PSP knocked it out.

  • THF2

    Posted Jan 17, 2006 1:04 pm PT

    this thing still exists?

  • mhder

    Posted Jan 17, 2006 12:56 pm PT

    It's out? Why did they even bother.... How's the Ngage Doing BTW?

  • diggyzoom

    Posted Jan 17, 2006 12:55 pm PT

    the psp killed the gizmondo

  • prvtTucker

    Posted Jan 17, 2006 12:48 pm PT

    the what?!?! hasn't that thing been in the dog house for like 3 years?

  • bizsumpark182

    Posted Jan 17, 2006 12:40 pm PT

    They really should just give up while Tiger still has a company. If they keep all this up their going to end up going under.

  • CluelessOne

    Posted Jan 17, 2006 12:37 pm PT

    nope considering your paying hundreds to have ads forced down your throat

  • nibbleyDUDE

    Posted Jan 17, 2006 12:37 pm PT

    lol

  • trj156

    Posted Jan 17, 2006 12:32 pm PT

    argh ads are bad, especially on a handheld...and i dont like how it "forces" people to look at them

  • Formula_50

    Posted Jan 17, 2006 12:31 pm PT

    LOL...LMAO...ROFL

  • NeoJedi

    Posted Jan 17, 2006 12:29 pm PT

    Man.... things are not looking well for Tiger. They should file for bankrupcy right away before things get even worse (if they can get worse...)

  • ian_fisher

    Posted Jan 17, 2006 12:28 pm PT

    Should any of this come as a surprise?

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