I am not sure why the editor turned out like that but here is a slightly more readable version.
Firstly and foremost, this is not financial advise or an attempt at ramping. I have looked into what has been happening with EM1, in particular around Miggster platform launch and have made up my own mind and I am simply sharing what is my opinion.
I have recently emailed Bert Mondello and Greg Stevens regarding recent events and he has provided a brief reply which basically boils down to:
We are working through the queries currently and will be providing the market with an update over the coming days.
Thanks for your continued Support.
This is obviously not addressing what I had asked however I understand they have their hands full right now with ASX and the fact they have bothered to answer provides some degree of care factor.
Now onto EM1 and Miggster / Crowd1 and what I think is happening.
In reality when you look at EM1, there is no doubt that this is not a company with enormous amount of cash that can make high rated games, build its own hosting infrastructure and spend a lot of money on marketing. I think of that we are very certain.
So really their options would be to either have some kind of a gaming app on app store or an online game of sorts and compete with thousands and thousands of other apps and games and potentially burn cash and fail. OR innovate.
If you look into Netflix, when they disrupted the industry they neither had the money or the power to fight the likes of Blockbuster. So they had to innovate and make use of what's already there rather than trying to build it.
Netflix used already created content by the likes of Hollywood (rather than creating their own), US postal services and a bunch of other stuff in order to reach existing customers of Blockbuster as well as the new customers such as the ones that couldn’t get a DVD because they didn’t have a Blockbuster or a similar outlet nearby.
Their business model was, as long as you pay a subscription fee, we will mail you a DVD of your choice at no charge and you never 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 into creating their own content, building their own servers, streaming content and so on. Most people already know.
The important point however is that they did NOT have the money or power to build anything in order to compete. They either had the option of creating a new outlet like Blockbuster or Videoezy and start competing with established businesses that had a lot more money than they did and potentially fail. OR they had to innovate and make use of what's available at that point.
Now onto EM1 which is often called Netflix of gaming. Like I pointed out earlier, EM1 could be just another game maker of some sort, appearing on app store or make their own platform and make a bunch of games and compete with thousands of already established gaming companies who have far more money.
OR they had to do something different.
EM1’s main model is trying to use high-rated games that have already been coded and some even have a established fanbase, use established infrastructure like Microsoft Azure that is highly reliable with great up time and processing power, 5G network that has never been available previously as 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 mostly making use of what is already available and established!
On the customer side, their offering is, you no longer need a console to play. Don’t pay for the console, don’t pay for the games, just a subscription fee and you could even win prizes! No download, no patches and you play your favourite games anywhere you could get reception. How good is that?
It also enables telecom platforms to push their 5G offering onto their customer.
Now, it is granted that given the choice, you would 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 the reputation 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 at some point!
They have to try and sign up with who they manage to get their hands on or risk running out of cash or having someone else imitate their idea.
I am under no illusion that we are not suddenly going to get 7 Million paying customers which is what a lot of people have been attacking. Personally I don’t think we will even get half of that initially. My best guess is we might get somewhere in the vicinity of 5% to 10%. But that’s a profit making start!
Netflix didn’t become Netflix overnight. It took some time and personally I think, if EM1 manages to pull it off, they may do it much faster or may even get bought out.
I have bought into the business model and obviously it gives good confidence that the directors have money invested in and they are trying to push the business forward.
The issue is ASX is very used to vanilla style businesses and as soon as they see innovation of this kind they panic. After all we are not silicon valley where technology innovation and marketing innovation is a norm. So they are going to throw tantrum and frankly I think the stock should remain in suspension until we know the number of actual paying customers which is not long.
But in any case, my thoughts are that right now in the gaming industry which by the way is doing very well, there is nothing like it!
DYOR GLTAH
(20min delay)