Restoring Faith in a Company Amid a Sea of Lawsuits
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Holmes Report

Restoring Faith in a Company Amid a Sea of Lawsuits

In late March 2004, Infinium Labs approached The Bohle Company to promote the unveiling of its flagship Phantom Game Service, an end-to-end, on-demand game service to be delivered over broadband to a consumer electronics device.

Paul Holmes

In late March 2004, Infinium Labs approached The Bohle Company to promote the unveiling of its flagship Phantom Game Service, an end-to-end, on-demand game service to be delivered over broadband to a consumer electronics device in the living room, at the Electronic Entertainment Expo (E3) in early May.

TBC soon learned the assignment was not entirely straightforward. Infinium Labs had been founded by an entrepreneur with a spotty business record. He’d had one modest success along with two failed start-ups in the past; investors had lost millions. The company had done a reverse merger into a public company shell, becoming an over-the-counter stock.

Naysayers were speculating that Infinium shares were of dubious value, based on earlier public announcements and other unsubstantiated claims made by the CEO regarding the capability of the service, financial and partner deals. Web sites ridiculing the service as “vaporware” had been mounted by game industry doubters, including one, devoted to the company, headed, “Where is Phantom?”

The company was fast consuming the capital it had raised. Lawsuits against the company, its management and former executives began to surface. The company’s planned launch of the service was clearly behind schedule. Rumors of the company’s demise were rampant.

The bright spot for Infinium had been the recent hiring of a game industry veteran, Kevin Bachus, a founder of the Xbox at Microsoft and an executive with tremendous personal credibility, as president and COO. Bachus had brought us into the deal and was bringing in his own team: a top Microsoft engineering manager, also from Xbox; an operations executive who could put a company together and manage an efficient ship; a strong sales team to go after retailers to sell the service; and a charismatic game industry executive with excellent contacts in the game development industry to bring in the content deals the company would need to launch the broadband service.

The PR team’s objectives included: be the most talked about product/service at E3, allowing Infinium Labs to: restore credibility for the company, raise money for launch, interest publishers in distributing their back-catalog of games over the service, get retailers on board to sell the hardware and service in their stores and generate consumer excitement about and anticipation for the Phantom Game Service

After completing an examination of stories to date and getting a more complete briefing from company officials, TBC advised Infinium that much work needed to be done. While releases had generated some awareness in the financial community, the company was unknown to most of the game industry, and its sullied reputation had to be corrected in order to raise more capital. While digital distribution was starting to be touted as the next big thing in home entertainment (Yahoo! had launched a game service for PCs in the home; GameSpy was talking about direct download of titles for gamers), Infinium’s technology was unproven, and consumer interest in a digital distribution game service for the whole family was still in debate. From strictly a bandwidth standpoint, only small games were making it successfully into the home. There was fierce skepticism from hard-core PC gamers.

Infinium’s recommendation was to start with a large San Francisco pre-show press conference. TBC countered that Infinium was not Microsoft, a brand that could draw a strong editorial turnout. Realistically, Infinium was an unknown. We also felt that an open conference, where the CEO’s former business history and as-of-yet unmet system and service capability claims could be brought up, would fuel concerns with game writers, many of whom were not aware of the company’s sullied reputation in the financial community.

Instead, TBC counseled one-on-one interviews with key industry and business editors, allowing Bachus to tell his story forcefully in a personal and controlled setting. He would update the editors on progress the company had made, focusing on the launch of the Phantom Game Service. After these individual meetings, the PR Team would move on to E3.

With only two weeks lead-time, TBC put Bachus on the road to New York, Boston, Washington D.C., San Francisco/San Jose and Los Angeles. Appointments were spread over three weeks, allowing Bachus to meet with investors and investment banking firms in between editors.

Nearly 35 face-to-face appointments were arranged, including game industry beat reporters at the top business publications, such as BusinessWeek, Forbes, The New York Times and The Wall Street Journal; the key industry marketing analysts at IDC, Jupiter Research and Zelos Group, among others; and all the key game news sites and trade publications, including GameSpot, Game Daily, IGN, GameSpy, EGM, Game Industry News and PC Gamer.

TBC also saw the major investment bankers covering the game industry at Banc of America Securities, UBS Warburg, Wedbush Morgan and Credit Suisse Boston, to name a few.

Due to interest generated by word of mouth discussion following the tour, the news stories breaking two days before E3 and TBC calls to media ahead of the show, the booth was mobbed. TBC managed more than 200 interviews and demos for the press the first day alone.

Results of TBC campaign include: 500 press/analyst demos during E3; 5,000 public demos of the service, 300 news stories, overwhelmingly positive, in the first week following E3, 25 in-booth broadcast interviews, including affiliates from nearly all the major TV news networks, including CNN, CBS, NBC, Fox, Warner Brothers/WB and UPN, 101 million total estimated positive media impressions, including stories on Reuters, Bloomberg, AP,, CNNMoney and, the stock jumped 27 percent on the first day of E3 following the news break.

More than 15 financial analysts came by for demos, a top officer of every single large game publisher visited the Infinium booth during the show to see a demo of the service and discuss content deals, later consummated, Best Buy, Circuit City, Electronics Boutique and Fry’s Electronics all sent their buyers and on the strength of its E3 showing, Infinium Labs was able to sign a $50 million equity financing.

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