Huge losses for Gizmondo News

After putting it off and putting it off in the manner of a schoolchild who doesn't want to hand in homework because they know it's rubbish and they'll only get told so, Gizmondo has finally released its financial report.

The news can roughly be summarised as follows: times are hard, luxury cars are a necessity and it costs an awful lot of money to get introduced to Sting.

According to the report, Tiger faced net losses of around $99 million in 2004, and an operating loss of $210 million over the first half of 2005. The company blamed these figures on "Development costs for the Gizmondo and non-cash expenses." They did manage to get more funding, though (from whom? For why?), receiving $73.1m in investment capital during the period ending August 2005.

Costs have included a $5.9m contract Gizmondo Europe signed with Electronic Arts to develop FIFA and SSX games for the handheld, and the operating costs of the company's global network of offices.

In addition, Gizmondo Europe paid independent developer Games Factory Publishing $4 million for coming up with concepts for use with 19 Intellectual Properties. These include such seemingly random IPs as Cheerio's, the New Millennium Encyclopedia, Outlaw Golf, Weather Control and Typing Tutor. That last one is a particularly curious addition since the Gizmondo has no keyboard, keypad or touch screen.

Perhaps even more intriguingly, Gizmondo Europe also paid independent developer Northern Lights $3.5 million to create the games Chicane and Colors. However, these games were in fact developed by two differerent studios - Warthog and Indie Studios, both of which are owned by Gizmondo Europe.

Northern Lights, incidentally, is co-owned by Gizmondo Europe director Carl Freer together with Stefan Eriksson. Who is, oh, the executive officer for Gizmondo Europe. That's right, it's almost as if they paid themselves to develop some games, and developed the games in-house! What a winning wheeze!

The coincidences don't end there. During 2004-2005, Tiger hired a consultant who was paid more than $170,000 for "Marketing and public relations services, an introduction to the performer Sting, and time spent in connection with the Agaju gaming concept currently in development." The consultant's name? Anneli Freer - no relation to Carl. Just kidding, she is of course his wife!

And that's not all, crazy coincidence fans! The report goes on to state that Tamela Sainsbury, the corporate secretary of Gizmondo Europe, was paid nearly $150,000 in base compensation during 2004, plus $83,000 in bonuses. She was also provided with a "luxury automobile" worth $70,000.

And get this! Tamela Sainsbury lives with her partner, Steve Carroll, who is a director of Gizmondo Europe! What a funny old world, you couldn't make it up etc etc.

It's clear from the report that Sainsbury isn't the only Gizmondo executive with a taste for luxury cars - Carroll had a vehicle worth more than $230,000 bought for him by the company, while Carl Freer's "automobile allowance" for the year stood at just under $280,000. That's a lot of mini cabs. Stefan Eriksson's allowance was a more modest $104,000, bless.

But, you know, those top executives NEED those car allowances. They can't be expected to pay their own way to work on their meager wages - you see, they only earn at least $1.5m a year! Each! And yeah, so maybe the have been allocated more than 7.5m shares - but they're worth a paltry $94m! You expect them to buy a zone 1-4 season travelcard on that kind of money?

As if Gizmondo wasn't in enough trouble as it is, it seems that companies are queuing up around the globe to sue the beggars. Lawsuits filed by the Jordan F1 racing team and landlords Christian and Timbers have now been settled, but PR firm Ogilvy reckons it's owed $4.1m - plus interest - for services rendered, and has launched a court case accordingly.

Handheld Games is suing, too, over a development contract. And now MTV Networks Europe has announced that it is "reserving its right to bring legal proceedings for payment of outstanding invoices" - according to MTV, Gizmondo failed to hand over the $1.5m promised by the agreed deadline of March 31. Oops.

All in all, it's not looking too good, is it? But never mind, there's always the delayed launch of the Gizmondo in the US, and of course the arrival of the widescreen version - look out, Mr Sony, here comes trouble!