Start-Up Unveils PC-Based Game Console

A Florida-based start-up that plans to take on Sony and Microsoft with its own computer gaming console announced preliminary specifications of the device over the weekend.

The Phantom game console will be based on a PC architecture, will download games via broadband networks to an internal hard drive, and should be available in the first quarter of 2004, said Infinium Labs. The company published details of the console on its Web site after a computer games show at which it had been planning to disclose the details was cancelled.

At the heart of the Phantom will be an Intel processor. Infinium Labs, which previously promised a processor running at 2 GHz or faster, still hasn't identified the processor but over the weekend said it would run at a speed up to 3 GHz. The console will also include 256MB of DDR DRAM, a graphics card from NVidia, and a hard drive with a capacity of at least 100GB, according to the specifications.

Those specifications won't stand still--one of the features of the Phantom is the ability to upgrade the unit as technology advances.

Device Details

A feature it doesn't have is an optical disc drive and that sets it apart from its competitors-- Sony's PlayStation 2, Microsoft's XBox, or Nintendo's Gamecube. That leaves customers without any physical media should the hard disk suffer a failure but Infinium says, should that happen, users will be able to redownload games they have purchased. When the disk drive is full, they will also be able to store games on network servers to make room for new games on their local drive.

Games for the Phantom, which is based on the Windows XP Embedded operating system, will be downloaded through a custom online service that will require a broadband Internet connection. The Phantomnet online service, which will also offer access to gaming content, demos of software, and online gaming, will be a subscription service and is currently projected to cost $9.95 per month, said David Frederick, chief marketing officer of Infinium Labs.

Downloaded games are expected to cost the same or less than current packaged games and users will also have an option to rent games, said Frederick.

Like other console makers Infinium Labs expects software and not hardware sales will be where it makes most of its profits. That's a classic business model for computer game console makers but one that demands resources.

"Microsoft will be the first to tell you that its incredibly difficult to break into this market," said Schelley Olhava, an analyst covering consumer products at IDC. "You need some great games and you need some developers. You need to pump out some great games, not just one or two."

Doing Things Differently

Infinium Labs is going about things differently, said Frederick.

"Sony and Microsoft are in a position to demand exclusivity on certain titles," he said. "We take a different approach. To us it doesn't matter if the title was originally created for Xbox or whatever. We make it easy to have content on the Phantom and unlike Sony and Microsoft, who charge a royalty to port and for the [software development kit], we provide the SDK virtually free and don't charge a royalty to have it on our platform."

Relying on games ported from other platforms to the Phantom might not be enough, said Olhava. "If you are a gamer and have a PlayStation 2, why would you go out and buy another box to play Madden Football."

Olhava also worries about the upgrade option that Infinium says it will offer.

"Consoles are fixed and there is commonality," she said. A game developed in year one will still work in year five. When you start being able to upgrade it changes the equation and makes it more like a PC."

Price Points

Looking ahead, Frederick said the company is planning to begin a beta testing program limited to the U.S. in October. He said the company has received more than 40,000 applications for the beta testing program ever since it began advertising it on its Web site. Sales are not expected to begin until the first quarter of next year in the U.S. and the company is targeting a price of around $400 for the console. International sales are planned but no schedule has been fixed.

The $400 price tag is more than that of both the PlayStation 2 and the Xbox, which each cost around $180 online, and a price that analyst Olhava thinks could prove too high.

"Gamers have shown time and time again that $299 is the threshold," she said. "I think it will be a very niche product. All three companies are very well established and those are the killer platforms."

Infinium's Frederick, not surprisingly, feels differently about his company's prospects.

"We don't feel that there is any major competition," he said. "It is a game console and there are two huge players in that space but we feel very strongly that we have been able to differentiate enough between static game consoles and dynamic platforms."

Infinium Labs has faced some hurdles in coming this far. When it first disclosed it was developing a game console, online gaming message boards were filled with messages from users casting doubt on the company's plans and even on whether Infinium Labs was a real company.

"I can tell you flat out, not only is Phantom real but it's coming and it's coming real soon," said Frederick. "For people who don't think it's real, they will be in for a huge shock."