CEO Julie Uhrman talks about the future of Ouya and new exclusive game

[Killswitch]

It is called milking venture capital without a business plan to pay it back. Folks should just enjoy their Ouyas and accept that commercially Ouya has not taken off commercially and most likely never will.

Alright. I'll take the bait.

Milking venture capital? You do realize the venture capital behind them were gaming industry people right? People in OUYA had some gaming industry experience too. Going to assume that's what you're saying since you weren't specific and take every chance you get to knock OUYA it seems.

Were you expecting OUYA to sell millions? That would be great but it's a niche product. If it fills its niche and sells to that niche properly then they don't need millions to be sold. I'm sure they would love that and maybe they can get to it but it takes time. They are making moves to try to break out of that mold and we'll see if it works but it's not like they're closing the doors tomorrow.

[rushmore]

Alright. I'll take the bait.

Milking venture capital? You do realize the venture capital behind them were gaming industry people right? People in OUYA had some gaming industry experience too. Going to assume that's what you're saying since you weren't specific and take every chance you get to knock OUYA it seems.

Were you expecting OUYA to sell millions? That would be great but it's a niche product. If it fills its niche and sells to that niche properly then they don't need millions to be sold. I'm sure they would love that and maybe they can get to it but it takes time. They are making moves to try to break out of that mold and we'll see if it works but it's not like they're closing the doors tomorrow.

If it is a niche product (agreed), than how was their app market revenue model ever going to work? Their company did not intend it to be a niche product due to the high install base needed to generate revenue in their proprietary app market. That is the whole point. Even with attach rates for extra controllers their P&L would not go in the black. A niche product in this industry only works if you have other products in your portfolio to add to your bottom line as well. They do not have it and they only exist now due to the capital given to them. Something their actual business model can not generate to keep them in the black.

Their net present value must be very red. How could it not be?

Added: The only way an O2 will happen is if they get more VC. Who would do that based on current results? Asking a question and not being rhetorical.

[flamepanther]

If it is a niche product (agreed), than how was their app market revenue model ever going to work? Their company did not intend it to be a niche product due to the high install base needed to generate revenue in their proprietary app market. That is the whole point.

It was always very clearly niche. I think OUYA expected to capture multiple niches (indies & homebrew, hackers & modders, casuals, mid-core, retro, budget, and anyone else currently left out by the AAA cycle), and for those niches to be larger.

Their net present value must be very red. How could it not be?.

The past statement from OUYA is that their plan was to "break even" on the console hardware itself. We also know that per unit, they are priced to make a profit on each console in order to offset the cost of returns, replacements, and other similar costs. So just looking at the hardware side, it's not unreasonable to expect that they're at least treading water, before we even look at software sales. On the software side, OUYA may not be super-profitable for any individual developer, but OUYA is collecting on every sale from all of their developers put together. If they're already just barely in the black (plausible), then this could very well make them a small profit.

I keep hearing people allege that OUYA is only staying afload because of all the venture captial they've been given, but considering the above, I doubt that. I suspect they're dumping most of their VC into FTG and other timed exclusives like Duck Game, and that they've still got a lot of it left.

The only way an O2 will happen is if they get more VC. Who would do that based on current results? Asking a question and not being rhetorical.

I can't answer your question, but I can question your premise. If you look around carefully, there are folks here on the forum who have hinted at working with OUYA 2 prototypes. Since it appears to be already happening, then there must be a way for OUYA to manage it without additional VC.

[Kuesco]

The problem still is that a thousand ouya fans can´t keep the bussiness running. And i don´t see a new OUYA 2 like a salvation. I will never buy it because my personal experience with OUYA 1 was really dissapointing and, even if fans don´t like comparisons, i expect a longer life cycle from a brand new electronic device, so i will not buy a new OUYA every year just because the previous one has serious design flaws. My trusty old Nintendo Wii lasted for eight years and i still play with it.

Maybe in this forum we hear some ouya hardcore fans that always sees the glass half full, but if ouya don´t get a reallistic view it will not survive.

Niche products don´t cope well in hard markets like the video games one.

[arcticdog]

Lets not confuse bias and wanting it to fail due to a bad experience as an actual failure.

In terms of business "failing", OUYA is not the behemoth toppling under it's own yearly expenses that requires it to yield X-Box or Playstation numbers. As long as OUYA's still has money and they keep their expense to growth ratio under control, failure isn't even in the equation.

As flamepanther stated, I don't think they're burning through their venture capital as quickly as some are speculating. I'll speculate myself that they might be going through $2M a year at the most to cover operational expenses and payroll.
Given their venture capital was in excess of $14M, that's at least 7 years worth of investor money to burn through if they don't turn a profit at all. Many businesses go for 2 to 5 years before they see anything. But as long as there is growth, even if it's a slow trickle, it's not a failure at the scale OUYA operates.

We also don't know the arrangement around OUYA Everywhere and how that licensing model works. If Madcatz or Nanotech devices get OUYA as a first class citizen on a firmware update, most assuredly there's a per-unit license being paid back to OUYA, or there's an OEM license for a whole lot of money in one shot.

Industry analyst Michael Pachter says the OUYA's growth strategy is fine, and they will probably even reach 1M units in the wild some day. But there is no pressure to do it in the scale and speed that X-Box and Playstation need to because their operational overhead is way way way WAY lower. As Killswitch said, the investors know what they got themselves into, and there isn't even a slight rumbling anywhere hinting that they're ready to jump ship. If that were the case, it's almost certain we'd have heard about it by now. I highly doubt "journalists" and people who feel burnt by a bad experience have more insight into their growth potential and earnings than the investors and analysts do. If there's anything to know about venture capitalists.. it's that they don't cling to false hope and bank roll millions of dollars on something they know will fail.

[frpnit]

In its current state, Uhrman said that the Ouya is an international platform. So far it’s been successfully launched in Western Europe and Brazil, and game creators are noticing changes in the community of players. One reports that he has had players download and play his game from 55 countries.

Ouya launched in Brazil? Really, what she means? I'm from Brazil and have never saw the console itself, neither any advertisement about it here. Just own one because a friend of mine brought for me from US. Anyway, it would be cool if i could purchase using my currency, just like Steam did about an year ago (and... I think it worked quite right!).

Fabrício.

[xAD]

Update: local Target has put out a tag for the OUYA and cleared shelf space in the WiiU area. Nothing in the space, but it's there.