Phantom Entertainment

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Phantom Entertainment
Type Manufacturing
Industry Internet TV, media-center and video-game consoles and peripherals
Headquarters Ridgewood, NJ
Key people John Landino (CEO)
Products Phantom Lapboard
Employees 3 (as of July 2007)[1]

Phantom Entertainment (known as Infinium Labs until 2006) is a company founded in 2002 by Tim Roberts which makes computer keyboards. However, Phantom is best known for the Phantom, a video game console advertised for Internet gaming on demand in 2004; it was never marketed, leading to suggestions that it was vaporware. The company's website was last updated in late 2010.[2]

History

Infinium Labs was founded by Tim Roberts in 2002 as a private company. In January 2003 it issued a press release saying that it would soon release a "revolutionary new gaming platform" with an on-demand video-game service, delivering games through an online subscription. The press release had no specific information, but included a computer-generated prototype design. Due to the use of buzzwords and the lack of details, the product was derided nearly from the beginning[3] by news sites such as IGN[4] and Slashdot and in the Penny Arcade webcomic.[5] The hardware and gaming site HardOCP researched and wrote an extensive article on the company and its operation, and was sued in turn. The Phantom placed first in Wired News's "Vaporware 2004".[6] In 2004, Infinium Labs went public.[7]

Roberts left the company in summer 2005 (with millions of shares of stock) before any products had been delivered. He later rejoined as chairman of the board, but in a July 2007 press release he again resigned from the company.[7] Subsequent CEOs included Kevin Bachus (who took the post in August 2005), Greg Koler (in January 2006)[8] and John Landino, who was appointed CEO and interim chief financial officer in July 2008.[9]

In September 2006 the company (which had changed its name from Infinium Labs)[10] promised to introduce its Phantom Lapboard product in November 2006, with a gaming service to follow in March 2007.[11] In June 2008, the company released the Lapboard.[12] In August 2007, Phantom Entertainment signed an agreement with ProGames Network to provide Lapboards and "game-service content" in hotels worldwide.[13]

The Phantom

The Phantom

The Phantom at E3 2004 in Los Angeles
Type Video game console
Generation If released, sixth or seventh generation (depending on release date)
Retail availability Canceled; release promised in November 2004, January, March and September 2005

The Phantom was a cancelled video-game console which supposedly began development in 2003 by Phantom Entertainment, known as Infinium Labs at that time. The device was said to be capable of playing current and future PC games, giving the system a large initial game library and making it easier for developers to produce games for the system. The system was said to feature a direct-download content delivery service, instead of the discs and cartridges used by most game consoles.

Press releases said in 2003 that the console would be released that year, and the digital rights management software would be provided by DiStream.[14][15] A prototype Phantom was first seen at the May 2004 Electronic Entertainment Expo (E3), although it was rumored to be fake.[16] Robrady Design was hired to develop the first Phantom prototype, and Synopse ID was later retained to develop second- and third-generation prototypes.

Release

The Phantom had an online release on August 17, 2003 with basic hardware specifications and a price of "below $399".[17] Options included customized hardware and the PhantomNet (a gaming-content service), priced at $9.95 a month. A sale date for the first quarter of 2004 was set. It was missed; the company later claimed it would go on sale in November for the holiday season, although it had not developed online-delivery software, licensed games or found any retailers. The second deadline was missed, with Infinium sending thousands of faxes claiming that the system would be released in January 2005.

When that deadline passed, Infinium predicted the system's release for around March 2005. That date also passed, and Infinium Labs was absent from the 2005 E3.[18] Kevin Bachus (former Infinium CEO) hinted that the Phantom would be released around the same time as the Xbox 360 in fall 2005, but that date was also missed. By August 2006, the Phantom Console was removed from the products page of the Phantom Entertainment website.

Although the console was never manufactured, Alienware ordered a shipment of Lapboards for inclusion in a line of media-center PCs. Scheduled for release in February 2007, the company stated in December that Phantom could not meet their delivery needs and they would not be carrying the product.[19]

Financial problems

The company was unable to raise its projected $30 million to complete the Phantom and announced it would downsize and focus on the Phantom Lapboard, a wireless keyboard for home use. On May 16, 2006, the Securities and Exchange Commission accused Phantom Entertainment founder and former CEO Timothy Roberts of running a "pump and dump" scheme in promoting the Phantom console in 2004.[20] The Phantom lost credibility in the gaming and business worlds due to the repeated pushing back of its release date and financial scandals involving Phantom Entertainment, which lost more than $62.7 million since its creation.[21]

Lapboard

Black wireless keyboard with thumb drive and wireless mouse
Lapboard (black version)

The Phantom Lapboard is a wireless keyboard made by the company. It was released on June 23, 2008, two years after its originally-planned release date. Designed as a component of the Phantom game console, it is sold for use with Internet TV and PC video games since the console has been cancelled.[22] In 2010, a new model of the Lapboard was released to work with Internet TV, gaming and media centers.[23]

Announcement

On January 3, 2006, Infinium Labs announced that the lapboard component of the console (a keyboard and mouse designed to be held on the lap, for example, seated on a couch in front of a television) was due to be released to online retailers by the second quarter of 2006.[24] On April 19 it announced that the keyboard would not be released in time for Q2 2006, but the device (manufactured by Itron Technology) would be released in North America and Europe "no later than October" 2006.[25] On August 15 it was announced that the price for the Lapboard would be $129.99, with customers who preordered receiving a $30 discount.[26] The keyboard was then delayed until November.[22] On August 22, 2007, Phantom Entertainment signed an agreement with ProGames Network to provide Lapboards and Game Service content in hotels worldwide.[13] The keyboard was finally released on June 23, 2008,[27] two years after its originally-planned release date.

Reception

White wireless keyboard, with thumb drive and wireless mouse
White Lapboard

In April 2008 Maximum PC published a review of the lapboard, describing it as "extremely promising" although the supplied mouse "experienced signal dropouts at a distance of about 24 inches from the sensor". The author was able to use other wireless mice successfully. The preview states that the peripheral will be available in "June for $130 in limited quantities".[28] On July 20, 2009, a sample lapboard received a favorable review from the Hardware Heaven website.[29] Despite its lukewarm review, in May 2010 About.com included the Phantom Lapboard in its Father's Day gift guide.[30][31] On July 19, 2010, Michael Welter posted a generally-positive review of the Phantom Lapboard on Missing Remote.[32]

Legal controversies

HardOCP lawsuit

In September 2003 HardOCP, a computer-hardware news website, published an investigative report by writer Steve Lynch critical of Infinium Labs and its founder.[33] On February 19, 2004 Infinium Labs' lawyers sent a cease and desist letter to HardOCP's editor demanding that the news site take down the article, claiming that it "painted a portrait of a company intent on swindling the public" and threatening to file a defamation suit. Rather than concede to Infinium's demands, HardOCP owner Kyle Bennett filed a lawsuit for a declaratory judgement that his company had done nothing wrong.[34] Infinium Labs then filed suit in Florida, denying that Texas was the proper jurisdiction (although it had previously maintained a staffed office in Richardson).[35]

In September 2004 the judge required Infinium Labs to produce a number of financial documents, including Roberts' personal income-tax returns, by the end of that month. The company failed to produce the required documents, and received a court order compelling them to do so. It were informed that sanctions would be awarded to KB Networks and Kyle Bennett in an amount to be determined by the court (later reported as $50,000).[36] In its settlement Infinium Labs dropped the pending Florida suit, admitted all allegations of the KB Networks complaint in Texas and paid $50,000 to end the suit.

Other controversies

In October 2005, it was reported that the U.S. Securities and Exchange Commission (SEC) had notified Tim Roberts that charges were pending against him for violating federal securities laws.[37] In a statement about the notice, Infinium said it was not notified of specific charges, but suspected they were related to an SEC investigation of the unlawful promotion of penny stocks (including Infinium's).[38] Roberts hired a stock promoter to send faxes claiming that the Phantom console's release was imminent, and the company's stock price might increase as much as 3,000 percent. The SEC alleged that the company never intended to release the console at the promised time due to significant unresolved "technological and manufacturing hurdles", and the faxes were part of a pump and dump scheme on the part of Roberts. Roberts reached a settlement with the SEC in which he was barred from serving as an officer or public director of a public company or participating in penny-stock offerings for five years and paid a $30,000 fine.[39]

When Roberts was CEO of Infinium, the company failed to report a substantial amount of interest and penalties on unpaid payroll taxes.[40] From its inception, the company had consistently reported a small amount of cash on hand amid extensive (and increasing) debt.

In January 2006 Infinium Labs reached an agreement to borrow up to $5,000,000 from Golden Gate Investors to finance the manufacturing of the Phantom Lapboard, scheduled for release later that year. This would have been the largest amount of money Infinium Labs had ever borrowed at one time. The loan would have been repaid over three years, with an option of repayment with shares of common stock.[41]

In February, Gamespot reported that Phantom Entertainment was suspending the Phantom Game Service to develop the Lapboard. An SEC filing showed three-year losses in excess of $62.7 million, over half of which was marketing for the company and unreleased products. Over $24 million was spent on salaries and consultants, and $2.5 million on development. Infinium claimed it still intended to release the Lapboard if its financial situation improved,[42] but it missed release dates for the second quarter of 2006, October 2006 and November 2006. On August 15, 2006 Phantom Entertainment removed all references to the Phantom Game Receiver from its website, claiming that the content-delivery system targeted for the Phantom would be available for PCs running the Microsoft Windows XP Media Center edition;[43] it later indicated this service would be available in March 2007, after the November 2006 release of the Lapboard.[44]

SEC allegations and settlement

On May 16, 2006, the SEC accused Tim Roberts of running a pump-and-dump financial-fraud scheme. Among the major allegations was that in late 2004 Roberts paid a promoter to send thousands of faxes falsely claiming that Infinium Labs planned to launch the Phantom system in January 2005, which drove Infinium Labs' stock price up. Roberts paid the promoter $200,000 of company money and four million shares of restricted stock without registering the transfer with the SEC. He also sold more than 1.3 million shares of his own stock (often without reporting the transactions to the SEC), making a profit of $422,500; both activities violate federal securities laws. The SEC asked the U.S. District Court in Orlando, Florida "to force Roberts to surrender those proceeds, pay a civil penalty and be prohibited from ever again serving as an officer or director of a public company or participating in any offering of penny stock."[45]

On September 19, 2008, the SEC settled its charges against Roberts. As part of the settlement, Roberts agreed to be barred from serving as an officer or director of any public company for five years, to be barred from participating in any offering of penny stock for five years, and to pay a $30,000 civil penalty.[46]

See also

References

  1. ↑ Anderson, Nate (2007-06-03). "True Infinium stories: the $73 million (and counting) Phantom disaster". Retrieved 2008-10-01. 
  2. ↑ "Phantom Entertainment 2011: Home to the Phantom Lapboard". Retrieved November 28, 2013. 
  3. ↑ John Callaham (20 January 2003). "Phantom Interview". HomeLAN. Retrieved 5 February 2012. 
  4. ↑ Ivan Sulic (21 January 2003). "Destroy Your Game Systems". IGN. Retrieved 5 February 2012. 
  5. ↑ Jerry Holkins (22 January 2003). "Penny Arcade "Dude, Whoa"". Penny Arcade. Retrieved 5 February 2012. 
  6. ↑ Kahney, Leander (2005-01-07). "Vaporware Phantom Haunts Us All". Wired News. Archived from the original on 2006-01-31. Retrieved 2006-05-17. 
  7. ↑ 7.0 7.1 Infinium Labs (9 July 2007). "Timothy M. Roberts Resigns as Chairman and Director of Phantom Entertainment, Inc". Infinium Labs Press Release. Retrieved 5 February 2012. 
  8. ↑ Svensson, Christian (2005-11-21). "Bachus Quits Infinium". Retrieved 2006-07-23. 
  9. ↑ "SEC - Form 8k - Resignation of Greg Koler". 2008-07-29. Retrieved 2008-09-05. 
  10. ↑ Murph, Darren (2006-07-19). "Infinium changes name to Phantom Entertainment". Retrieved 2008-10-01. 
  11. ↑ "Surprise! Phantom Delays Game Service Again". 2006-09-12. Archived from the original on 2010-07-30. Retrieved 2008-10-01. 
  12. ↑ "Infinium Labs finally releases the Phantom Lapboard - Boing Boing". Gadgets.boingboing.net. 2008-06-24. Retrieved 2011-06-28. 
  13. ↑ 13.0 13.1 "Phantom Entertainment Signs with ProGames Network to Place Phantom Lapboard and Game Service Content in Hotels Worldwide". BusinessWire. 2007-08-22. Retrieved 2007-08-23. 
  14. ↑ Infinium Labs (23 July 2003). "Phantom Game Console Unveiling to Be Online August 17th". Infinium Labs Press Release. Retrieved 05 February 2012. 
  15. ↑ Infinium Labs (3 November 2003). "DiStream Will Provide Server System and Management Platform for PhantomNet". Infinium Labs Press Release. Retrieved 5 February 2012. 
  16. ↑ Kevin Parrish (16 December 2008). "Phantom Returns With Online Store". TomsHardware. Retrieved 5 February 2012. 
  17. ↑ Infinium Labs (17 August 2003). "Phantom Unveiling". Infinium Labs. Retrieved 5 February 2012. 
  18. ↑ Morris, Chris (2005-05-19). "Whither the Phantom? After a big splash in 2004, Infinium Labs' on-demand game service is nowhere to be found at E3". CNN/Money. Retrieved 2006-05-17. 
  19. ↑ Biggs, John (2007-12-27). "Alienware no longer carrying Phantom Lapboard". CrunchGear. Retrieved 2008-10-01. 
  20. ↑ Morris, Chris (2006-05-16). "'Phantom' video game CEO charged with pump and dump scheme". CNN/Money. Retrieved 2006-05-17. 
  21. ↑ Sinclair, Brendan (2006-02-21). "Infinium opens the books". GameSpot. Retrieved 2006-04-09. 
  22. ↑ 22.0 22.1 Phantom transmogrifies - News at GameSpot
  23. ↑ Castle, Alex (September 7, 2010). "Phantom Lapboard Review". MaximumPC. Retrieved November 29, 2013. 
  24. ↑ Sinclair, Brendan (2006-01-03). "Phantom Lapboard coming to PCs". GameSpot. Retrieved 2006-05-17. 
  25. ↑ Orry, James (2006-05-18). "Phantom Lapboard delayed". Pro-G. Retrieved 2006-05-18. 
  26. ↑ Phantom Entertainment
  27. ↑ "Phantom Lapboard - Gizmodo". 2008-04-25. Archived from the original on 2009-05-30. Retrieved 2008-08-18. 
  28. ↑ Smith, Will. "First Look: The Phantom Lapboard". Maximum PC. Retrieved November 29, 2013. 
  29. ↑ Zardon (20 July 2009). "Phantom Lapboard (Keyboard & Mouse)". HardwareHeaven.com. Retrieved November 29, 2013. 
  30. ↑ Johnston, Lisa. "Phantom Lapboard Review". About.com. Retrieved November 29, 2013. 
  31. ↑ Johnston, Lisa. "Father's Day Gift Ideas". About.com. Retrieved November 29, 2013. 
  32. ↑ Welter, Michael. "The Phantom Lapboard". Missing Remote. Retrieved November 29, 2013. 
  33. ↑ Lynch, Steve (2003-09-17). "Behind the Infinium Phantom Console". HardOCP. Retrieved 2006-07-23. 
  34. ↑ Fahey, Rob (2004-03-04). "HardOCP takes legal action against Infinium". Retrieved 2008-10-01. 
  35. ↑ "Infinium's Kevin Bachus Accused of Lying to US Courts". 2004-06-15. Retrieved 2008-10-01. 
  36. ↑ "Infinium Labs, Inc. Form 10-QSB". Retrieved 2008-10-01. 
  37. ↑ Sinclair, Brendan (2005-10-31). "Phantom maker in hot water with SEC". GameSpot. Retrieved 2006-07-23. 
  38. ↑ "Infinium Labs Inc • 8-K • For 10/20/05". Form 8-K. Infinium Labs. 2005-10-20. Retrieved 2008-10-01. 
  39. ↑ "SEC settles charges with video game executive". SEC. 2008-09-19. Retrieved 2008-03-25. 
  40. ↑ Sinclair, Brendan (2005-11-01). "Phantom maker in hot water with SEC". Gamespot. Retrieved 2008-10-01. 
  41. ↑ Klepek, Patrick (2006-01-25). "Infinium Bags $5 Million". Retrieved 2006-07-23. 
  42. ↑ Sinclair, Brendan (2006-02-21). "Infinium opens the books". GameSpot. Retrieved 2006-07-23. 
  43. ↑ "Phantom console disappears". The Inquirer. 2006-08-16. 
  44. ↑ "Surprise! Phantom Delays Game Service Again". 2006-09-12. Retrieved 2008-10-01. 
  45. ↑ Morris, Christ (2006-05-16). "'Phantom' video game CEO charged with pump and dump scheme". Retrieved 2008-10-01. 
  46. ↑ "ENFORCEMENT PROCEEDINGS - SEC Settles Charges With Video Game Executive". The Connors Group, Inc. 2008-09-22. Retrieved 2008-10-01. 

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