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Kickstarter sensation Ouya could be dead on arrival

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The newly crowd-funded Ouya console may be breaking records and attracting thousands of generous backers, but it could end up being a commercial disaster which will cost its founders dearly, according to a man who knows a thing or two about launching new gaming hardware.

Craig Rothwell is part of the team behind the Pandora handheld, which was first announced way back in 2006 but suffered delays and setbacks before finally making it to retail.

As such, Rothwell is ideally positioned to provide an experienced viewpoint on the perils of conceptualising, manufacturing and distributing new video gaming hardware.

Rothwell’s most obvious concern is the price – the team behind Ouya are adamant that they can provide a Tegra 3-powered base console equipped with 1GB of RAM and a wireless controller for less than $99 (approximately £60).

“You simply cannot make a quality console and controller for $99, no matter how low you go in China,” comments Rothwell. “Even a Chinese semi-slave production line won’t hit $99 at that spec, as the big name parts they are talking about are a set cost. ”

“My feelings are that at that price – and remember you have to take off the Kickstarter fees, which brings the console and touchpad-equipped controller in at less than $99 – they will be making a loss on each unit sold.”

The Ouya game controller (via Kickstarter)

Rothwell and his team are currently engaged in bringing the second generation Pandora to market, and he is quick to point out the harsh lessons they’ve learned from the genesis of the original machine. “With the first Pandora we didn’t dare take orders until we could show all the hardware working, with exact specs, and a working case and controls.

“We worked out all costs and had quotes which we went public with, and even then everything which could go wrong did go wrong. We survived by the skin of our teeth and via some very, very kind customers and developers. In many ways, we did ‘Kickstarter’ before Kickstarter was even a thing; we raised over $1.5 million back in 2009 to fund the completion of the Pandora project.

“Now we have been though that baptism of fire, and know everything that is involved, it’s clear that a race to the lowest possible price isn’t how you succeed. That’s generally how things can go majorly wrong; when trying to come to market with a rock bottom price, one error, one contractor messing up, and it’s curtains.”

“Because Ouya is already being sold at that rock bottom price before going to production, there is no way for them to adjust for error. I hope they have a big secret pile of cash they can call on if they need it.”

The troubled Pandora device (CC-Licensed Michael Mrozek)

It’s not just the pricing that troubles Rothwell. Although it’s early days for Ouya, there are nevertheless a lot of unanswered questions about how the system will actually work once its installed under your telly. Naturally, the Pandora man has his own theories. “My guess is that you will have to pay some kind of subscription to use the console, and that is where they plan to claw back some money.”

Rothwell also questions the claim that the system is truly open, and points out that the proposed developer pricing arrangement isn’t quite as revolutionary as Ouya’s founders would have you believe. “They say they are ‘open’ but the hardware they are using isn’t open – it will require binary blobs to use and their software appears to contain DRM,” he says.

“What they are doing with regards to developer fees is also nothing new; they want to charge developers 30% to release a game on their console. What’s the point in doing all that work for their comparatively tiny audience when you can get a better deal releasing on iOS or ‘normal’ Android via Google’s popular Play Store? You might as well get a HDMI cable and an iControlpad and use your super-powered Android Tablet on the TV. You can do that right now, without the need for the Ouya.”

Ouya has already smashed its Kickstarter target and still (at the time of writing) has almost a month to go before funding closes.

The interest in the system has been nothing short of astronomical, but as Rothwell knows only too well from his journey to market with the Pandora, expectation has a habit of coming back to haunt you. “When all the hype dies down, this machine could well be DOA, and Ouya could be looking at a giant black hole of losses.”

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  1. Craig Roberts

    The new Kick starter Ouya

    Let’s look at what they got critically:

    25.000 lousy preorders. Hands up, who will program for that install base?
    $4 Million in funds, which is the daily marketing budget of the big boys they try to go up against.
    Not enough money to produce enough units to produce what Apple sells in a day.

    I can’t see developers or publishers committing the large scale resources required to make modern AAA titles on a console that is billed as being rootable from day one.

    This project is nothing more than putting a marketing spin directed at gamer on the flashflood of Android devices that are being currently sold. All the Gooseberries, VIA Android PC, HDMI “Sticks”, etc.

    Just consider, if Microsoft took preorders for their next console today, they would have 2.5 MILLION preorder in 48h, not 25.000. They would have retail chains lining up to process them. They wouldn’t necessarily have a better trailer, so kudos for that.

    Some links on the topic of Android PCs:

    http://www.androidauthority.com/remember-the-74-android-pc-now-it-has-a-53-little-brother-95354/
    http://androidonpc.com/via-arm-ds-android-pc/

  2. Tom Notarnicola

    “Just consider, if Microsoft took preorders for their next console today, they would have 2.5 MILLION preorder in 48h, not 25.000. They would have retail chains lining up to process them. They wouldn’t necessarily have a better trailer, so kudos for that.”

    Invalid. Microsoft has been a big part of the computing world for near on 40 years now. Of course they would have massive pre-orders for their next console as they are well established and well known. Most gamers would not have seen Kickstart or the project. I for one didn’t find out about it until a couple of days ago. Then we are not forgetting the casual gamers that wont go on the internet to look up gaming news.

    Its a great step in the right direction for gaming. Hitting an unexplored market. Getting indie developers into the living room. You don’t need big games or titles to push this one. Its exciting and fresh. Most of the ideas are better than same old Call of Duty or whatever.

    Lets give this a chance and give credit where it is due.

  3. Craig Roberts

    Not saying not give the console a chance … i hope it does take off however the facts are, there no way can they create a system for a price tag of 99$ – 60£ with the Nvidia Tegra 3 chip on its own, and still have funds to create everything else…. unless they are giving the machines away for free.. this will be a pure miracle if it takes off.

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