I rarely comment on console games, but in a continuing laugh track-worthy sequence, Infinium Labs (OTCBB: IFLB), home of the amusingly and aptly named Phantom console, today announced that Kevin Bachus, one of the original Xbox executives and current Infinium President, had been promoted to CEO, and that the company was moving to Seattle from Florida - I could go on and on about this company, but it's really too easy (recent 10Q here, including mention of going concern problems, content license defaults, inability to raise money, etc.) and it's impossible to short the stock anyway, so I'll leave it to a brief article about the company here.
General consensus is that Tiger Telematics will be in a similar state soon with its Gizmondo mobile gaming device and an astounding current $800M market cap, but it's too early to tell for sure on that one. However, a basic analysis over the entire life of console gaming would show that successfully launching and sustaining a console has been done by legacy players Nintendo and Sega (made it 3 generations, but is no longer in the hardware business) and by large companies Sony and Microsoft - every single other one (list is long, but includes Atari, Intellivision, Coleco, Philips, Bandai, Tapwave, etc.) has failed, including arguably, the Nokia N-Gage at a cost of more than $1B, which will presumably be discontinued as a separate hardware platform as they continue their announced transition to Series 60 content in 2006. The idea of a smaller company or start-up successfully launching a console is just not a realistic proposition - one needs to work with the existing platforms, whether they are open ones such as a PC or phone, or more closed ones such as a console, or set top box, in order to be successful. Therefore, do not own stock in start-up console hardware companies.