Firstly and foremost, this is not financialadvise or an attempt at ramping. I have looked into what has been happeningwith EM1, in particular around Miggster platform launch and have made up my ownmind and I am simply sharing what is my opinion.
I have recently emailed Bert Mondello and GregStevens regarding recent events and he has provided a brief reply whichbasically boils down to:
We are working through the queries currentlyand will be providing the market with an update over the coming days.
Thanks for your continued Support.
This is obviously not addressing what I hadasked however I understand they have their hands full right now with ASX andthe fact they have bothered to answer provides some degree of care factor.
Now onto EM1 and Miggster / Crowd1 and what Ithink is happening.
In reality when you look at EM1, there is nodoubt that this is not a company with enormous amount of cash that can makehigh rated games, build its own hosting infrastructure and spend a lot of moneyon marketing. I think of that we are very certain.
So really their options would be to either havesome kind of a gaming app on app store or an online game of sorts and competewith thousands and thousands of other apps and games and potentially burn cashand fail. OR innovate.
If you look into Netflix, when they disruptedthe industry they neither had the money or the power to fight the likes ofBlockbuster. So they had to innovate and make use of whats already there ratherthan trying to build it.
Netflix used already created content by thelikes of Hollywood (rather than creating their own), US postal services and abunch of other stuff in order to reach existing customers of Blockbusteras well as the new customers such as the ones that couldn’t get a DVD because they didn’t have aBlockbuster or a similar outlet nearby.
Their business model was, as long as you pay asubscription fee, we will mail you a DVD of your choice at no charge and younever pay a late return fee ever! You just need to return the DVD via mail,free of charge, to get a new DVD.
I wont go into how they then evolved intocreating their own content, building their own servers, streaming content andso on. Most people already know.
The important point however is that they didNOT have the money or power to build anything in order to compete. They eitherhad the option of creating a new outlet like Blockbuster or Videoezy and startcompeting with established businesses that had a lot more money than they didand potentially fail. OR they had to innovate and make use of whats availableat that point.
Now onto EM1 which is often called Netflix ofgaming. Like I pointed out earlier, EM1 could be just another game maker ofsome sort, appearing on app store or make their own platform and make a bunchof games and compete with thousands of already established gaming companies whohave far more money.
OR they had to do something different.
EM1’s main model is trying to use high-rated gamesthat have already been coded and some even have a established fanbase, useestablished infrastructure like Microsoft Azure that is highly reliable withgreat up time and processing power, 5G network that has never been available previouslyas well as platforms such as MTN and Crowd1 to do their marketing.
If you take any one of the above and look atEM1’s available cash, they could not have done it themselves. They are mostlymaking use of what is already available and established!
On the customer side, their offering is, you nolonger need a console to play. Don’t pay for the console, don’t pay for thegames, just a subscription fee and you could even win prizes! No download, nopatches and you play your favourite games anywhere you could get reception. How good is that?
It also enables telecom platforms to push their5G offering onto their customer.
Now, it is granted that given the choice, youwould prefer having launched your new platform with the likes of Singtel,AT&T, Verizon or other platforms.
But understand guys that EM1 does not have thereputation and proof to be able to sign up the very big and very famous just yet,although for all I know it could still be in the works and may get announced atsome point!
They have to try and sign up with who they manageto get their hands on or risk running out of cash or having someone elseimitate their idea.
I am under no illusion that we are not suddenlygoing to get 7 Million paying customers which is what a lot of people have beenattacking. Personally I don’t think we will even get half of that initially. Mybest guess is we might get somewhere in the vicinity of 5% to 10%. But that’s aprofit making start!
Netflix didn’t become Netflix overnight. Ittook some time and personally I think, if EM1 manages to pull it off, they maydo it much faster or may even get bought out.
I have bought into the business model andobviously it gives good confidence that the directors have money invested inand they are trying to push the business forward.
The issue is ASX is very used to vanilla style businessesand as soon as they see innovation of this kind they panic. Afterall we are notsilicon valley where technology innovation and marketing innovation is a norm.So they are going to throw tantrum and frankly I think the stock should remainin suspension until we know the number of actual paying customers which is notlong.
But in any case, my thoughts are that right nowin the gaming industry which by the way is doing very well, there is nothinglike it!
DYOR GLTAH
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