I started blogging in late July of 2005, primarily to understand the blogging phenomenon, especially after my wife consulted for blogging pioneer SixApart, and after I attended the Casual Games Conference in Seattle. In that time, I have attempted to focus primarly on digital media, gaming, consumer technology, and a few other topics in hopefully related areas. So let's do a very brief year-end summary:
- Infinium Labs - home of the aptly named Phantom console - blogged about them here and here. In the last 6 months, the stock has dropped essentially to $.02, they've replaced the CEO, and it's clear it's going to Zero...
- Gizmondo - blogged about them here and here - my personal favorite, whose PR hack repeatedly emailed me asking "if I was part of the conspiracy against them". Stock has dropped to 2.5 from 10 since my October post . It's going to Zero...
- Loudeye - a good group of employees in a bad business. Stock has dropped to $.41 from $.80 since I blogged about them in August - will be sold for less than that at the end of the day - a victim of bad sector economics and a horrible Overpeer acquisition which they shut down last month.
- Digital Music Market and Competitors - Apple continues to utterly dominate the category, with Real, Napster and others bringing up the rear. Good news is that 75% market share brings incredible economies of scale to Apple in the player hardware business - Bad news is that the music labels still own the download category, and utterly control the economics. RealNetworks and Napster will fight it out in the subscription business until Apple enters it in 2006, and all competitors will focus on the new web/ad-supported sector.
- Ringtones/Dwango, etc. - An amazing global $5B+ business which outlasts the perpetual naysayers, and which delivers returns increasingly to music labels and to carriers vs the earlier outsized returns to aggregators such as Infospace, Moderati and Zingy, all of whose business models are starting to resemble the market dynamics of Sysco (that's the largest US food distributor, not the router company)
- Casual Games - an unsung, but quickly growing entertainment category which is about to be hit by standard consolidation economics, with many current players being bought or going away, with the others being relegated to "lifestyle" businesses. However, I believe the growth opportunities of this sector make it the most promising one of the entertainment category. The reason I invested into Puzzle Pirates is because I believe they are a key break-out player in the category.
- Next Gen Consoles - XBox 360 looks like a good box with a potentially phenomenal online business, but not a great software business since the initial games are weak. PS3 won't ship until Q4 2006, but will have great games and mediocre online support. Who knows what Nintendo Revolution will do, but their amazing success in Japan with non-standard games for the DS is a potential indicator.
- Consumer Bubble 2.0 - yes, it's arriving, meaning valutions are increasing for these companies, but it doesn't mean they're all over-valued, just that there is too much investment cash in the category - these new entertainment firms will redefine what is currently a traditional linear media company. E.g. if you're a newspaper company, what are you doing now as your current business inevitably declines?
- Donnerwood Media - we will launch a kick-ass new entertainment category in Q1 2006
Thanks for reading Sharkjumping this year - 2006 is looking like a very fun year....