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History
Part 1 – The Buyout
The story of the Gizmondo is a shady one. At the forefront of this story is Stefan Eriksson, the head of a Swedish mafia group known as the Uppsala Mafia, who was brought in as co-executive of Tiger Telematics in 2002. But the story of Gizmondo is even darker than it appears.
Before plunging into the heart of the matter, we need to talk about Floor Décor LLC, the parent company of Gizmondo. The story behind it is a fairly complex series of buyouts, bankruptcies and shady deals, so I will only scratch the surface here.
In May 2001, Floor Décor LLC, a flooring retail and installation company, was bought out by Media Communications Group, Inc. (“MCGI”), a shell company with no previous assets. Led by A.J. Nassar, a businessman who worked in the flooring business, the group bought 40% of the common stock and took over control of the company.
This transaction was not suspicious, but less than seven months after the takeover, Floor Decor announced that it had signed a definitive agreement to purchase Eagle Eye Scandinavia Distribution Ltd, a company that specialized in the marketing and distribution of automotive telematics systems. Eagle Eye Scandinavia Distribution Ltd had been founded by Carl Freer in 2000. The buyout by Floor Decor gave Christopher Sturm and Carl Freer, the two managing partners of Eagle Eye Scandinavia Distribution Ltd, about 13% of Floor Decor’s ownership.
A.J. Nassar claimed that the purchase was meant to diversify the company’s activity while remaining strongly committed to growing Floor Decor’s Superstore Big Box Chain, but he quickly changed the name of the company to Tiger Telematics. On June 5, 2002, just three months after the acquisition was completed, he announced that they had entered a plan to dispose of the flooring business. The flooring business was sold to a newly formed company called M.I.N.I.M.E., INC., which was coincidentally located at the same address as Tiger Telematics, for $100. The deal included all of the assets and the debts, and Floor Decor declared bankruptcy soon after.
On June 13, 2002, Tiger Telematics made another deal by acquiring Comworxx, a US mobile telematics solutions company, through another shell company called Tiger USA, which also ended up being closed shortly after.
On July 24, 2002, the CEO and two prominent directors of the company, including A.J. Nassar, resigned, while Comworxx’s CEO was fired. Michael W. Carrender, the CFO of the company, was appointed CEO of Tiger Telematics.
In less than a year, a complex and somewhat shady financial scheme had transformed a flooring company into a leading telematics company. But this was only the beginning.
Part 2 – Gametrac
In 2002, Tiger Telematics’ core business had switched from flooring to being a telematics provider for large fleets in England, including the rental car market. But the company was also exploring a new idea: child tracking devices. In its 2002 end-of-year financial statement, Tiger Telematics estimated that about two million units could be sold in the first year.
Since no child would want to carry a GPS device at all times unless they got something in return, Tiger Telematics decided to create a device that would incorporate state-of-the-art Java games and SMS texting capability, to make it an easy sell from parent to child or teenager. This would also secure other revenue streams, such as payments for downloading new games and advertising through MMS.
To make the Gametrac, Tiger Telematics formed a UK subsidiary called Gizmondo Europe, which was run by Carl Freer, the founder of Eagle Eye Scandinavia Distribution, on which the whole company now rested. Carl Freer brought on board his friend Stefan Eriksson, whom he had known during the ’80s when Eriksson was a nightclub owner. Officially, Stefan Eriksson was brought in to provide strategic introductions to high-profile car racing contacts. Stefan delivered on this promise by securing sponsorship from the Jordan Grand Prix team.
In 2003, Tiger Telematics signed numerous strategic partnerships and started to create a buzz around the Gametrac. Tiger hoped for a release date in early 2004, but due to various problems it was not able to deliver. The Jordan Grand Prix team, which had placed Gametrac ads on its race car, then sued Tiger Telematics because Tiger refused to pay before the release.
Part 3 – The Money
In 2004, Tiger Telematics decided to change the name from Gametrac to Gizmondo because of trademark issues in the UK. On paper, the Gizmondo had impressive specs for the time, and hopes were very high among the video game community. Tiger continued signing strategic and marketing partnerships but, using the potential value of the company as money, it paid almost everyone with restricted shares that could not be sold for two years. Almost everyone, because Freer and Eriksson found ways to funnel money out of Tiger Telematics and into their own pockets. Freer received a generous $2.2 million compensation package for his first year piloting the new entity, and his wife received $174,000 from Gizmondo for “consultancy services”.
But this was only the compensation approved by the board of directors. What the board didn’t know is that the two men were making deals between Gizmondo and various entities to which they were related, including $3.5 million to a software company called Northern Lights for the development of Chicane and Colours, two games that were officially developed by Indie Studios and Warthog respectively. It should come as no surprise that Eriksson and Freer were co-owners of Northern Lights. In another deal, the two men paid $4 million to a company named Game Factory Publishing to develop games that were never delivered. That company was directed by a close friend of Freer’s.
Release
The Gizmondo was finally unveiled in spring 2005, but manufacturing issues were still plaguing production speed. For example, a lack of silicon orders left Tiger unable to get enough NVIDIA graphics chips to fulfill the pre-orders. This did not stop Tiger Telematics from throwing an extravagant launch party at the Park Lane Hotel in London, with performers such as Dannii Minogue, Tom Green, Sting, Pharrell Williams and Busta Rhymes.
But shortly after the release, the first official reviews came in, and they were brutal. The device cost £229 for the normal version, which was twice the price of the recently released Nintendo DS. Although Tiger tried to justify the price with the ability to play MP3s and its messaging capability, critics were not impressed by the device, and even less impressed by the game line-up. A Smart Ad-enabled version was also available for £129, but it would push advertising onto your device from time to time.
At this point, Tiger had lost more than $380 million and was being sued by various partners, such as Ogilvy and MTV Networks Europe. Tiger remained confident that the North American launch would be a success and planned a US release in September 2005. But in August 2005, Tiger Telematics announced that it was working on an upgraded version of the Gizmondo with a larger screen. This, along with next to no marketing in the US, resulted in another disastrous release.
Demise
News of the shady deals began to emerge in the media, and Eriksson and Freer were forced out the door. But it was too little, too late, as the company was heavily in debt and had to declare bankruptcy. Of the $382.5 million in net losses preceding the resignations of Freer and Eriksson, half was still unaccounted for.
By February 6, 2006, the company had gone bankrupt and the Gizmondo was officially discontinued, with fewer than 25,000 units sold. It should be noted that, by that point, Gizmondo had never sent any Smart Ads to the lower-tier devices, which means that anyone who purchased the “cheaper” ad-enabled device had the same experience as with the normal one in the end.
Games
A total of 14 games were released in Europe, while only 8 made it to the U.S.A. before the console was discontinued.
U.S.A and European Release
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| Classic Compendium | Classic Compendium 2 | Gizmondo Motocross 2005 | Point of Destruction | ||||
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| Richard Burns Rally | Sticky Balls | Toy Golf | Trailblazer |
European Exclusive
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| Fathammer Classics Pack | FIFA Football 2005 | Hockey Rage 2005 | Interstellar Flames 2 |
Other Cartridges
Only one other type of cartridge exists for the console: a GPS navigation system that came bundled with the maps of a region. The most common one is the United Kingdom version. A West Coast US version was also confirmed to exist, with maps of Oregon, Idaho, California, Utah, Arizona, Alaska and Hawaii. Three other regions were announced but haven’t been found yet (East Coast, Mid-West and South West). Each of the US regional versions had a suggested retail price of $169, and an entire-USA option had a suggested retail price of $249.
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| Gizmondo Navigator 2006 CoPilot – West Coast US | Gizmondo Navigator 2006 CoPilot – United Kingdom Version |
Unreleased Cartridges
As the console was cancelled very early, a lot of games were still in development. A few of them even had pre-release demos. Below is a list of known pre-release cartridges floating around.
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| Colors | Agaju | Catapult | |||
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| Carmageddon | Hit and Myth | Chicane | |||
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| Supernaturals | Kiosk Demo (USA) | Pre-Release Game Demo |
Technical Specification
- Display: 72 mm (2.8 inch) TFT screen
- Resolution: 320 × 240 pixels
- CPU: Samsung ARM9 processor running at 400 MHz
- Graphics: Nvidia GoForce 3D 4500 with 1.2 MB 128-bit SRAM
- RAM: 128 MB 16-bit DDR
- ROM: 64 MB
- OS: Windows CE 4.2
External Reference
As I mentioned in the history section, this story is very complex, and although I tried to capture the important events, there is still a lot that can be said about this saga. The full details of this story from a financial perspective, “Gizmondo – Inside The Eye Of The Tiger”, were published on Game Set Watch by Simon Carless. I highly encourage you to read the full article, as it includes a ton of information not presented here.
Another excellent article is the interview of Carl Freer by Ellie Gibson, “A horse named Gizmondo: The inside story of the world’s greatest failed console”, on Eurogamer.
The rest of the information came from SEC filings and various press releases.
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