Infinium opens the books

Prospectus details how would-be PC-game-console-maker lost $62.7 million in three years--and is putting the Phantom on hold.

Infinium Labs is focused on getting its Phantom Lapboard to market, but the cash-strapped company is in need of additional financing.

Last month, the company announced an arrangement for $5 million in funding from Golden Gate Investors. As part of that agreement, Infinium has filed a prospectus with the Securities and Exchange Commission detailing the company's unprofitable past and laying out its game plan for the future.

From its inception in December of 2002 through September of last year, Infinium racked up $62.7 million in losses. Of that, only $3.5 million has been lost to development costs. The company has spent more than half that in advertising, even though none of its products or services have been released yet. More of the company's money has been going toward consultants ($12.8 million), salaries ($11.9 million), and general and administrative expenses ($5.9 million).

As for how the company plans to reverse its fortunes, the prospectus indicates that, for now, the company is backing off of its Phantom Game Service and focusing on getting its Phantom Lapboard peripheral to market.

"We are developing and seeking to commercialize the Phantom Lapboard, a wireless, rotating custom keyboard/turntable with integrated mousepad," the prospectus reads. "After establishing the Phantom Lapboard, we may seek to develop and commercialize the Phantom Game Service."

And while Infinium has announced a second-quarter release for the Phantom Lapboard, the prospectus suggests that might not happen and is quite dependent on the company's attempts to secure more funding.

"Given our limited resources, and the delays experienced thus far, we are not in a position to anticipate a completion date for development of our product or a launch date for the Phantom Lapboard."

Should Infinium manage to release the Phantom Lapboard, it would do so first through an online store, possibly moving into brick-and-mortar retailers later on. The company said it will support the Lapboard release with a marketing campaign that relies heavily on viral advertising, apparently including message board moles.

"Tactics we intend to utilize are one-to-one and online/viral techniques to identify, communicate and drive hardcore gamers (who are the most likely early adopters) to the Phantom Internet website," according to the prospectus. "We also intend to infiltrate best-in-class video game communities with simple, easy to understand message and seeding on tech blogs, gaming sites and on-line player forums with compelling imagery and links to lapboard eye candy."

Infinium's filing also details a history of the company's broken agreements. It had signed royalty agreements with a number of publishers to provide games for its Phantom Game Service. Each publisher was guaranteed an advance royalty payment, and in each case mentioned, Infinium has so far failed to live up to its end of the bargain. It guaranteed advance royalties of $500,000 to Atari (publisher of the Dragon Ball Z and Driver series), $225,000 to Riverdeep (Carmen Sandiego, Reader Rabbit), $125,000 to Eidos (Tomb Raider, 25 to Life), $25,000 to Codemasters (TOCA Race Driver 3, RF Online), and $10,000 to Enlight (Bad Day L.A., Scrapland). Infinium is in default of its agreements with all of these companies.

The company also owes money to its landlord. With a monthly rent of more than $25,000 for its Seattle, Washington, headquarters, the company has defaulted on its lease to the tune of approximately $127,000. Infinium is currently negotiating with the landlord to leave the office space by the end of the month, six months before the end of its original lease. The company intends to find another facility in Seattle to serve as its headquarters going forward.

111 Comments

  • blackace

    Posted Oct 19, 2007 11:31 am PT

    Phantom was vaporware from the start and the founders of the company took the million and ran. They hired new CEO's and Vice President and then took off with the funds, leaving the new executive to answer all the hard questions. 67 million and only 3.5 used for development, marketing and advertising. I heard some of the top execs were getting 1 million a year. This is the main reason no product was ever produced or made it to retail. This is basically the same thing that happened with Ion Storm (John 'bonehead' Romero") and Daikatana. They got all these millions to make Daikatana and John and Tom Hall spent most of it on themselves (new cars, luxury house, partying, etc..) instead of working on the damn game. Daikatana got released, it sucked and Eidos closed Ion Storm and got rid of John and Tom. lol!!

  • CraigD

    Posted Mar 2, 2006 4:09 pm PT

    Infinium has hired Synpse for assisting and guidence in Lapboard manufacturing:

    Infinium Labs Selects Synapse to Guide Manufacturing of the Phantom Lapboard
    Thursday March 2, 8:16 am ET

    SEATTLE, March 2 /PRNewswire-FirstCall/ -- Infinium Labs, Inc. (OTC Bulletin Board: IFLB - News) announced today the Company has contracted with Synapse Product Development, LLC, a product and technology development consulting firm, for manufacturing development of the Phantom® Lapboard. Synapse previously was engaged to assist the Company with the Phantom Lapboard prototype development.

    "We are ready to take the Phantom Lapboard into production and have re-engaged Synapse to assist the Company in manufacturer selection, tooling development, documentation control and process development," stated Greg Koler, Infinium Labs' CEO and President. "The Company is reducing its operating costs by restructuring and outsourcing hardware and software development."

    "We are focused on working with Synapse to get the Phantom Lapboard to market as quickly as possible," Koler said. "We have been in discussions with several peripheral manufacturers and have redefined Synapse's role to help us with the contract manufacturer selection. Based on our initial discussions with manufacturers, Infinium Labs is on track to hit our 2006 distribution goals for the Phantom Lapboard. We will be announcing our contract manufacturer as soon as possible."

    The Phantom Lapboard was nominated at the Electronic Entertainment Expo (E3) alongside Nintendo's DS (Dual Screen) and Sony's PSP (PlayStation Portable) for the conference's Game Critics Awards in the "Best of Show Hardware/Peripheral" category. The Phantom Lapboard is an extremely innovative peripheral that enables players to control games designed for keyboard and mouse usage with as much agility as they are used to in the office, from the comfort of the couch or easy chair. The Lapboard rotates for left- and right-handed users and also inclines on a 90-degree angle with a hard surface below for the Phantom Mouse. The device comes either wired or wireless and provides USB ports and headphone/microphone ports.

    http://finance.yahoo.com/q?s=iflb.ob&d=t


    Will the Lapboard make it to market before PS3?

  • darcybaston

    Posted Feb 27, 2006 10:47 am PT

    toward consultants ($12.8 million), salaries ($11.9 million), and general and administrative expenses ($5.9 million) This result is very easy to dramatize: A bunch of people get together and come up with an idea. They sell it to an investor and score the dough, "Woohoo! We all get 250k salaries and can advertise like crazy! Let's do it! PAAAAAARRRRRTTTYYYYY!" Instead of doing any work, they get consultants, "dude, we're rich, forget the whole working thing. Let's contract out 20 people to do the research on this for us. Let's pay em 100k each, and we're bound to get the best results right? Sweet!" So, bedazzled by the promises of consultants, they in turn bedazzle the investors with their promises. One day, coming in hung over, each original founding member tells their 12 assistants (each on salaries of 60k) to take the day off, "man, this partying stuff is killing me. I need a new car to perk me up. Get me the sports-car petty cash box. Oh no! It's empty! Damn. Did we get a product out yet? Sheesh, I haven't been to a meeting in months, what the heck happened? Crap, now we'd better scramble and make a keyboard...or something!" THE END

  • foxhound421

    Posted Feb 27, 2006 6:42 am PT

    the phantom reminds me of the Atari Jaguar or the 3DO. i mean the phantom's looking to bridge the gap between console and PC gamers right? that's their proposed market. i just don't see them doing that any better than the MS's 360.

  • Autolycus

    Posted Feb 27, 2006 5:32 am PT

    I still dont understand how they convinced banks/people to invest 67million bucks. Just because you have an idea and a outline doesnt mean its going to work. Think before giving your money away

  • Silverblade-GR

    Posted Feb 27, 2006 12:38 am PT

    Well I think everyone more or less expected this to happen. Phantom was never anything more than... a ghost

  • Arewex

    Posted Feb 26, 2006 10:07 am PT

    i wish i could take troubled companies such as Infinium into my deep man-bosom and rock them gently to the sound of my voice, and say "everything is gonna be alright (child), everything is gonna be alright.
    But i cant cause i'm not a full-blown god yet and most of my money is kept in a fossil watch tin box. Its just sounds so brutal to be a company with an idea they have to fight their possible consumers to believe in. Ppl well no gamers these days are not so friendly towards gaming companies selling them something.

  • halo2maniak

    Posted Feb 26, 2006 7:28 am PT

    who cares it is a keyboard!

  • nick582003

    Posted Feb 25, 2006 6:10 pm PT

    If i remember correctly they were gonna get sued if they released it.

  • NICKnPSL

    Posted Feb 25, 2006 7:32 am PT

    wow who would have "thunk" it, they are running out of money did you guys look at how much money they spent in salaries i know they dont have like a 200 man crew so it sounds like they are tring to pay themselves way to much money

  • The_Fat_Zebra

    Posted Feb 25, 2006 7:20 am PT

    The next GS news release on this will feature two words: Infinium and bankruptcy...

  • shaunLEGEND

    Posted Feb 25, 2006 3:24 am PT

    Does anyone actually believe the Phantom will ever come out? I mean Microsoft and Nintendo already took their business model away (downloadable games) with X-Box Live Arcade & the upcoming Virtual Console on Revolution. They should just move on.

  • deleteuser

    Posted Feb 25, 2006 12:11 am PT

    The Phantom will go the way of the Indrema.

  • psychorealm11

    Posted Feb 24, 2006 11:44 pm PT

    Well this is interesting. Can you say ENRON? I love their way of thinking. Spend less than 6 million on the product but spend 5 times more on the advertising because that will bing in the dollars. It is not the actual product that sells which will give you the money. I wish I had thought of this scam before. Manke money by pretending to make a product. 12 million on employee salaries and they can not even pay their rent. The CEO gets 9 million which is 3 million per year and the rest goes to everyone else. What a joke. The law makers are more worried about violence in games where they should be focusing more on fraud cases of this type. Long live PONG.

  • Merl57

    Posted Feb 24, 2006 9:23 pm PT

    Yeah it was so in the dark for a long time. Does it exist? Yes it does. What does ti do. O its kinda like gametap. is it worth the money? can you actually buy it? no what is the point. I agree with the kid that said hey theres a keyboard that came out of 67 million dollars haha.

  • abe2cool4u

    Posted Feb 24, 2006 8:56 pm PT

    the phantom seems 2 just be a waste of money, invest in some product that seems interesting.

  • jgon_9

    Posted Feb 24, 2006 8:55 pm PT

    The Phantom is still being made? Wow I guess the name makes sense, since it's basically a ghost console that'll never be released. How they managed to blow $30 million on advertising when I've never seen any ads for The Phantom is beyond me. I've heard about this system a couple of years ago and I thought it was a joke.

  • LanceSummerhous

    Posted Feb 24, 2006 7:22 pm PT

    Man, Phantom news is always great for a laugh.

  • CheatRZ

    Posted Feb 24, 2006 12:09 pm PT

    Long Live Indrema!!!!!!!!!!!!!... oops, wrong company.. Infinium will end up like the Indrema anyway.

  • jjenkins78

    Posted Feb 24, 2006 12:02 pm PT

    They've got it all wrong. They should put ALL of thier focus on marketing that keyboard/mouse/board combo thing. Even they must know by now that they don't have a chance of competing against Microsoft, Sony, and Nintendo combined.

  • hart704

    Posted Feb 24, 2006 8:31 am PT

    Why are we all still bothering to talk about this vaporware? All talk about it should cease until it's release, which isn't likely anyway.

  • theyhunger

    Posted Feb 24, 2006 6:23 am PT

    I'm shocked.

  • Merus_Draconis

    Posted Feb 24, 2006 2:33 am PT

    Hahahahaha! They've going to use message board shells to sell something from Infinium Labs. Is that the most transparent ad campaign I've seen so far or what?

  • ericchia620

    Posted Feb 23, 2006 5:39 pm PT

    huh??? Is that news?

  • soulessjay

    Posted Feb 23, 2006 1:51 pm PT

    Not surprised at all.

  • molivers7

    Posted Feb 23, 2006 11:38 am PT

    Yikes, the game industry is going down.

  • Briantb_2008

    Posted Feb 23, 2006 9:14 am PT

    They have some bad management to be spending that much money on advertising on things THAT ARE NOT OUT YET

  • knofou

    Posted Feb 23, 2006 6:20 am PT

    To Infinium Labs investors: Can I have some money also? I will not make any product but at least I am not lying to you

  • Bl4ckAdDer

    Posted Feb 23, 2006 12:31 am PT

    ..... who really cares about "the Phantom," that was bound to fail and a waste of time and the company's money.

  • Bl4ckAdDer

    Posted Feb 23, 2006 12:31 am PT

    ..... who really cares about "the Phantom," that was bound to fail and a waste of time and the company's money.

  • trancejeremy

    Posted Feb 22, 2006 11:14 pm PT

    This seems to me to have been nothing more than a scam to begin with (IMHO). Bilk some gullible investors out of lots of money.

  • thechosenone827

    Posted Feb 22, 2006 10:14 pm PT

    They don't need to put it on hold, they need to just give up. The Phantom sounds more like a scam than a game system.

  • ironside20

    Posted Feb 22, 2006 7:27 pm PT

    its a good idea because people dont want to three grand on a new computer every year or two.

  • yboucher

    Posted Feb 22, 2006 6:38 pm PT

    Why didn't anybody underline the fact that this was a fraud FROM THE VERY BEGINNING ? I mean, it's called the PHANTOM for crying out loud !! Laughing right in people's faces is half of their fun !!!

  • mierdahp

    Posted Feb 22, 2006 5:53 pm PT

    Patience is a virtue, they should have waited a little more and studied the market better, besides, many people (including me) have been waiting for the Phantom for years (2004-2006), they should deliver.

  • barnold81

    Posted Feb 22, 2006 5:01 pm PT

    The console system market is already sufficiently saturated. I haven't even heard of Phantom before.

    There's always a stupid venture capitalist out their willing to fuel failure.

    Why would someone need a console PC game system when they need a desktop or laptop anyway for basic needs (word processing, etc.)? I think the market for these systems would be very small and only appeal to the most hardcore of PC gamers. It's just not practical. . .

  • DDX2

    Posted Feb 22, 2006 4:55 pm PT

    i remember when i thought the phantom game service looked really cool.

  • mrgio69

    Posted Feb 22, 2006 4:25 pm PT

    the phantom is a hoak its just a way for them to rip there investors off this system was announced way back when the dreamcast launched and its still hasnt seen the light of day

  • G_balla

    Posted Feb 22, 2006 3:51 pm PT

    ya this thing is just a WASTE of money and is stupid. Just buy the next gen stuff, that is worth wayyyyyyy more.

  • capnpetch

    Posted Feb 22, 2006 3:23 pm PT

    The funniest thing about this article is not the vapor ware or the sunk costs. No, what is really funny is the lead in the article which indicates that they managed to get someone to give them 5 million more dollars even with the long track record... Blah, I wish had thought up the phantom "phantom" first."

  • blackwing837

    Posted Feb 22, 2006 2:57 pm PT

    The phantom- vaporware at its finest.

  • cloudstrife75

    Posted Feb 22, 2006 2:38 pm PT

    i think my baby sister manages money better when buying candy then this company... how do you lose 60 some odd million bucks and have nothing to show for it?? pfff good marketing losers

  • dronearm

    Posted Feb 22, 2006 2:37 pm PT

    Phantom on hold...."so" gutted.....NOT!

  • the411monkey

    Posted Feb 22, 2006 2:15 pm PT

    You cant put something on hold that was never in the process anyways. I've heard about this for to long, a couple of years now I think, just give up, and move on

  • mystereojones

    Posted Feb 22, 2006 2:12 pm PT

    Response to jrueda1: Unfortunately, no one cares. Stop wasting time developing for a platform that is the laughingstock of the industry.

  • mystereojones

    Posted Feb 22, 2006 2:09 pm PT

    I don't know which is worse and more painful...this Phantom game console or Duke Nukem Forever?

  • jrueda1

    Posted Feb 22, 2006 1:06 pm PT

    Comment to mgoalie01:
    Hi. It is not true that there aren't any game specific for the Phantom Game Service. Our company is developing one of them (and I don't know if there is any other company doing so). We have it 'parked' in the development stage, as teh original specs had been modified by Infinium. In fact we were 1 of the first development teams in contact Infinium in order to develop games 'Only playable on' their system. I assure it to all of you: the game will be playable on their platform and only on their platform. Thank you.

  • slife_basic

    Posted Feb 22, 2006 12:57 pm PT

    My question is whose money did they lose?

  • Tranceplant

    Posted Feb 22, 2006 10:59 am PT

    Hmmm... i'll say like some other said...
    HOAX! HOAX! HOAX!

  • bossjimbob

    Posted Feb 22, 2006 9:54 am PT

    The lapboard might be cool for console MMOs...

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