OUYA: A $99 Android console meant to open up console gaming

[Ethan Rex]

I think what's being said here is that there is no proof that they will try at all. They take all the money, pretend to get it working, pocket the money and say "sorry guys it didn't work."

IMO that scenario is very unlikely, but I think meteo is trying to say that there's no guarantee that WON'T happen, and the developers' lofty goals and vagueness sure as hell doesn't help their case.

Either way, all we can do is wait and see what happens.

[Brushfire]

They are by no means obligated by anything to follow through. That being said, they will probably produce something. However there are a lot of problems with what they want to do, and until those promises start being fulfilled, you shouldn't tout this as the second coming of Christ.

[The Derrit]

no, what's being said is it's unlikely they will deliver what they promise. in that they can't deliver a 100 dollar system by next march. they can probably deliver a 200 dollar system by sometime next year but that's not what they promised.

[Meteo Xavier]

They are by no means obligated by anything to follow through.

Really? Holy shit - why haven't I started a Kickstarter already? I could make a fortune and not have to deliver anything!

Seriously though, I find that fairly difficult to believe. I don't know much about Kickstarter, I largely stay away from it because I have yet to see enough in it to put faith into giving strangers large sums of money for something they haven't finished or even begun yet, but I would assume something that large would make some sort of obligation so people couldn't promise something, collect funds, but not have to produce anything.

[Crowbar Man]

If the entire Nexus 7 can be offered at $200 now I dont see why Ouya cant be around the $100 figure 9mo to a year from now. It doesn't have screen, battery, camera, etc. Also, "similar" (but less powerful) products are being offered around $100 (Roku, Apple TV, Vizio's new Google TV box, etc). Heck, Rasberry Pi mentioned here, is $25.

Maybe not $99 on the dot, but I dont see why double, that is as much as the 360 currently costs.

Neblix: There are always evil people in the world looking to con anybody into anything. Technically theres nothing really stopping kickstarters from conning people once they complete the kickstarter and meet goal.

Though you don't generally have this much support from the general gaming community and industry (both indie and big name) if you are a complete con.

Here's just hoping they can do what they say they want to. It'll be awesome if they can

Edited August 29, 2012 by Crowbar Man

[Clefairy]

After all this time, I still think people are putting too much focus on the hardware and not enough on the infrastructure.

Building a content delivery network to support the product in time for launch? Yeah, okay, if that were the only thing. But on top of a large-scale production run, all the associated headaches there, and then getting all your units shipped?

How is that even remotely realistic?

I would assume something that large would make some sort of obligation so people couldn't promise something, collect funds, but not have to produce anything.

Also, there is no obligation agreement. If the backers don't hear anything for a while, they can complain and Kickstarter will send a reminder to check in with them about the project. But they make it very clear in the terms that you assume all the risk when you make the pledge.

Edited August 29, 2012 by Clefairy

[Bleck]

I don't think I understand the point of this console.

[The Derrit]

If the entire Nexus 7 can be offered at $200 now I dont see why Ouya cant be around the $100 figure 9mo to a year from now. It doesn't have screen, battery, camera, etc. Also, "similar" (but less powerful) products are being offered around $100 (Roku, Apple TV, Vizio's new Google TV box, etc). Heck, Rasberry Pi mentioned here, is $25.

really? 'if something that has similar specs is 200 dollars i can't see why they can't sell ouya for half the price.' just look at that for a few minutes.

you don't generally have this much support from the general gaming community and industry (both indie and big name) if you are a complete con.

50,000 people out of 500 million plus gamers is not 'tons of community support.' nor is square enix saying they'll make a final fantasy port anywhere near 'big name support.'

Here's just hoping they can do what they say they want to. It'll be awesome if they can

it will be awesome if they can. but all signs point to no if you look at this rationally and reasonably.

what you guys all gave me shit for and 'backpedaling on' is that from a business standpoint this system has no future. the idea of them finishing a new system home frame, having their 'hardware guy' (because apparently there's only one hardware guy) get contracts from several sources together to mass manufacture this machine, actually manufacturing the machine (which takes plenty of time on it's own), marketing the console so it actually has presence when it launches, and paying everyone it involves to do all of the things above? i'm no expert but i'm pretty sure that requires more than 9 months and 9 million dollars.

and this sits on TOP of the fact that it's already entering a saturated market, which has similar things, either for less money i.e. this raspberry pi thing for hobbyists, or a better and more established distribution source, i.e. steam, xbl, or psn.

and thinking about it, it kind of is a scam if they don't deliver because people gave 100$ in return for a console at launch. people gave that money for the promise of a system, not so they could develop a system and they could buy it later with more money. the more i think about it the less realistic it becomes for them to be able to do it, with that 9 million dollars they're manufacturing many of these systems at no revenue; they're using the money people paid for their systems with as investment money, meaning at launch day they're essentially giving away several thousands of systems for free. 47,124 of the people who pledged, out of 63,416, have paid for their systems in full. there will certainly be more people interested than just those who pledged for it, but more than half of their initial investors don't owe ouya another dime.

how they would have done it with the initial 950,000 dollar pledge is even more what bothers me. that would have been literally impossible.

[Dhsu]

I don't think I understand the point of this console.

Indie games on a console without the developer overhead of XBLA/PSN. For $100.

really? 'if something that has similar specs is 200 dollars i can't see why they can't sell ouya for half the price.' just look at that for a few minutes.

If something that has similar specs, plus a screen, camera, and battery, is 200 dollars, I can't see why can't sell Ouya for half the price.

how they would have done it with the initial 950,000 dollar pledge is even more what bothers me. that would have been literally impossible.

A Kickstarter is most often just that -- it's for kickstarting a product, not for completely funding it beginning to end. They most likely have other investors and sources of funds as well, some that might have been dependent on how well the Kickstarter did.

Edited August 29, 2012 by Dhsu

[Crowbar Man]

really? 'if something that has similar specs is 200 dollars i can't see why they can't sell ouya for half the price.' just look at that for a few minutes.

Uh, maybe you missed the part where I said Ouya doesn't have a screen, battery, camera, etc. You know, things that make Nexus 7 expensive to produce?

nor is square enix saying they'll make a final fantasy port anywhere near 'big name support.'

So youre saying Square Enix, Namco Bandai, Mojang, Robotki, Plex, Team XBMC, TwitchTV, OnLive, SemiSecret, SpryFox, MADFINGER, etc are all in on the con?

Highly possible. But I'll assume not.

what you guys all gave me shit for and 'backpedaling on' is that from a business standpoint this system has no future.

Yeah that was it. Completely. Not an entirely different conversation, Nope.

Also, it has the same possible future as ANY device released with Android apps/games as a backbone. Most of them do well enough on their own

the more i think about it the less realistic it becomes for them to be able to do it, with that 9 million dollars they're manufacturing many of these systems at no revenue; they're using the money people paid for their systems with as investment money, meaning at launch day they're essentially giving away several thousands of systems for free.

That depends on if $99 is "cost" and no profit at all. Also, youre forgetting this is similar to what console manufacturers do, release an item at cost or less than cost, get the money back via accessories (Ouya controllers, supports up to 4), and game/license agreements (Ouya is taking a % of game sales,)

Also, you dont know how much money they had before or will get after the Kickstarter. From what it looks like, the Kickstarter was just a big advertisement/preorder campain. Seems like it worked

Building a content delivery network to support the product in time for launch?

Its possible they will just use a custom frontend to Google Play, though it hasn't been stated anywhere yet if this device will be Google Certified for Google Play yet. If it doesn't use Google Play in any way, that will be quite the challenge. Though it is also possible they already have this network up before they started the Kickstarter.

Edited August 29, 2012 by Crowbar Man

[Newt]

A few points:

'Investors' are people that will get a return on their investment. A more appropriate term for people who backed the kickstarter is 'Suckers'. Anyone who backed the kickstarter spent $100 with no liability for anything.

Kickstarter + Amazon is something like 7% off the top. So they have about $137 per console they need to deliver. And controllers.

Anyone saying 'Samsung can make phones for $100 so Ouya can be $100' doesn't understand supply chains. Samsung (or other major electronics developers) can only offer those prices because they move sufficient quantity to hold very good relations with the sweat-shop manufacturing facilities. I obviously don't have hard numbers, but it's been made very clear throughout various media outlets, corporate statements, etc that margins are exceptionally worse for projects with smaller quantities and corporations without prior relationships. Ouya will not get the same rates for manufacturing as Samsung/Apple/Nokia/etc.

Phones are also often subsidized by contract fees - this is not the case with Ouya. It /is/ the case with the Xbox360 and it's eventual successor (sans the 'often' bit..).

They either have a staff of at least a dozen, or they are legitimately conning people. Their burn rate is going to be a large issue.

There's basically no way this thing is going to get off the ground unless they can convince some VC to open their wallets. I'm not sure if the Phantom is old enough for them to trust a crazy scheme like this again. Add that to the obvious 'piracy; games; incumbents; market demand; ..' issues, and it looks very questionable that they'll be able to pull it off.

Have they even shown a real finished prototype yet? No; photoshop renders don't count.

[Dhsu]

A few points:

'Investors' are people that will get a return on their investment. A more appropriate term for people who backed the kickstarter is 'Suckers'. Anyone who backed the kickstarter spent $100 with no liability for anything.

Since when has investing guaranteed a return? Is anyone whose stock has tanked for any reason automatically a sucker?

Anyone saying 'Samsung can make phones for $100 so Ouya can be $100' doesn't understand supply chains. Samsung (or other major electronics developers) can only offer those prices because they move sufficient quantity to hold very good relations with the sweat-shop manufacturing facilities. I obviously don't have hard numbers, but it's been made very clear throughout various media outlets, corporate statements, etc that margins are exceptionally worse for projects with smaller quantities and corporations without prior relationships. Ouya will not get the same rates for manufacturing as Samsung/Apple/Nokia/etc.

Hm, that's a good point.

Phones are also often subsidized by contract fees - this is not the case with Ouya. It /is/ the case with the Xbox360 and it's eventual successor (sans the 'often' bit..).

Crowbar pointed out that the Nexus 7 is being offered at a non-subsidized price of $200, and that it doesn't seem like too much of a stretch to assume that without a screen, battery, camera, speakers, etc., a similar device could be offered for $100.

[Newt]

Since when has investing guaranteed a return? Is anyone whose stock has tanked for any reason automatically a sucker?

Anyone investing with a guaranteed best null-return on investment is a sucker. People buy stocks because they could be worth /more/ than they put in. Assuming Ouya launches at $100, you're better off putting the money in a CD and waiting for Ouya to launch. You can then buy a hamburger with the excess or something. You also don't absorb someone else's risk for no reason.

Crowbar pointed out that the Nexus 7 is being offered at a non-subsidized price of $200, and that it doesn't seem like too much of a stretch to assume that without a screen, battery, camera, speakers, etc., a similar device could be offered for $100.

Nexus 7 also doesn't have a controller. Also consider shipping weight.

[Nabeel Ansari]

So youre saying Square Enix, Namco Bandai, Mojang, Robotki, Plex, Team XBMC, TwitchTV, OnLive, SemiSecret, SpryFox, MADFINGER, etc are all in on the con?

Since when is Mojang a big name? They made a successful game. Doesn't make them a "big name". They're a pretty small company.

[Dhsu]

Anyone investing with a guaranteed best null-return on investment is a sucker. People buy stocks because they could be worth /more/ than they put in. Assuming Ouya launches at $100, you're better off putting the money in a CD and waiting for Ouya to launch. You can then buy a hamburger with the excess or something. You also don't absorb someone else's risk for no reason.

I guess the "return" here is that it actually gets funded, but I agree that at this point a $100 pledge doesn't make much sense over just buying it at launch. There are a few Kickstarter-only bonuses though.

Nexus 7 also doesn't have a controller. Also consider shipping weight.

Also a good point. Then again, even if they're selling their hardware at a loss, they wouldn't be the first.

[Nabeel Ansari]

Also a good point. Then again, even if they're selling their hardware at a loss, they wouldn't be the first.

Don't mean to be annoying but I'm learning a bit from this discussion, could you state examples that you're thinking of?

[Gario]

Amazon's "Kindle" is an example of hardware that's sold at a small loss. Not sure of anything else, though.

[Nabeel Ansari]

Amazon's "Kindle" is an example of hardware that's sold at a small loss. Not sure of anything else, though.

Amazon is a big company that has other ways of making money, I'm sure. I don't think the loss hurts them as much as it would hurt Ouya.

I think Newt has a point, saying that big guys can pull this stuff off better.

[Gario]

Kindle makes it's money through it's book sales that it makes through the hardware. Amazon makes a whole lot of money on the book purchases from Kindle, so it's not operating at a loss at all. Inkjet printers follow this model, too - the hardware is sold at a loss, but those damn cartridges make the company large profits.

The hardware itself is sold at negative profit, but companies are actually making a killing otherwise. It's a completely different business model that could possibly apply to OUYA. Smaller companies could pull this off, with the right model to follow.

Edited August 29, 2012 by Gario

[Nabeel Ansari]

Kindle makes it's money through it's book sales that it makes through the hardware. Amazon makes a whole lot of money on the book purchases from Kindle, so it's not operating at a loss at all. Inkjet printers follow this model, too - the hardware is sold at a loss, but those damn cartridges make the company large profits.

The hardware itself is sold at negative profit, but companies are actually making a killing otherwise. It's a completely different business model that could possibly apply to OUYA. Smaller companies could pull this off, with the right model to follow.

Ouya only takes a small cut from sales. This could only work if the console blows up in terms of publicity.

[Newt]

Amazon is a big company that has other ways of making money, I'm sure. I don't think the loss hurts them as much as it would hurt Ouya.

I think Newt has a point, saying that big guys can pull this stuff off better.

It is not uncommon for game consoles to be sold at a loss -- see Xbox, Xbox360, PS2, PS3, ...

Notable exception is the Wii, which since launch sold at a profit.

They're able to do that for a variety of reasons including: licensing fees, expected first party game sales, expected platform revenue, etc.

The main problem with the approach is that it requires vast amounts of capital up front -- something that the Ouya presently lacks. 'Vast' in this sense would be on the order of a million units.

The short of it is that they're going to need to pick up a bunch of funding or this thing is almost guaranteed to either not launch or not do anything significant even if it does.

[Nabeel Ansari]

How much, in numbers would they need?

I wish I had eight million bucks.

[Newt]

How much, in numbers would they need?

I wish I had eight million bucks.

Very bad back-of-the-notebook approximations follow:

Lets say that to get major developer attention as a primary platform they will need a million units. A more realistic number is 2-3mil, but let's be nice. Much as I love it, the Vita is currently struggling with something around 2.2mil devices sold.

Let's also assume that unicorns exist and they can manufacture it for $100. That's $100MM just in manufacturing costs. Up-front. They're also going to need a strong marketing campaign.. I have no idea what that would cost, but surely in the millions to tens of millions.

By my (admittedly extremely poor) estimation, they could probably make a reasonable play for $200-500MM. They have ~$8MM.

Edited August 29, 2012 by Newt

[Bahamut]

To be a bit more fair, it sort of marketed itself here, so you could probably reducing marketing a lot more to maybe even $1 million or less.

Console cost would probably be less than $100 if they are aiming at selling at that price - let's be generous and say $75. That's $75 million alone. There's a reason investors are wary about products involving manufacturing - that's a hefty price of entry, and the margin for profit probably isn't as well as I've painted it either.

[Newt]

To be a bit more fair, it sort of marketed itself here, so you could probably reducing marketing a lot more to maybe even $1 million or less.

Console cost would probably be less than $100 if they are aiming at selling at that price - let's be generous and say $75. That's $75 million alone. There's a reason investors are wary about products involving manufacturing - that's a hefty price of entry, and the margin for profit probably isn't as well as I've painted it either.

Even with your much more generous numbers, they're an order of magnitude off of the target.

The terms the investors would demand for the money would probably be pretty crazy too..