Mustard Seeds Investment Club

[gemmerling]

GameCom planning VR attack

By: DENELL RUSSELL, Staff writer June 22, 2001

Arlington-based GameCom Inc., an interactive computer gaming designer and manufacturer, played its corporate cards right in April and walked away with a valuable virtual-reality chip in Ferris Productions Inc.
The newly combined company is fashioning its first project, a virtual-reality promotion for Red Baron Pizza, said GameCom (OTCBB: GAMZ) Chief Executive Officer L. Kelly Jones. The company projects that the merger will yield more than $5 million more in revenue this year than the companies totaled as separate entities last year. Jones said the company is planning a plethora of projects that will run the gamut of virtual-reality uses. Phoenix-based Ferris has a solid foothold in the worldwide virtual reality industry, and Jones believes the marriage of the two companies furnishes a perfect business vehicle.

"We realized it would take (GameCom) too much time to get us to where we wanted to be (through internal growth)," he said. "We wanted to find the right private company compatible with us.

"I think we've got a real chance to ring the bell," he said.

With Ferris, the compatibility was there and the corporate pieces fit, he said. Jones credits the company's product compatibility with being key to the successful merger. GameCom's key product is 'Net GameLink, an interactive Internet gaming platform housed in networked kiosks that GameCom designs, manufactures and assembles. Ferris makes integrated hardware and software for virtual reality applications. Ferris designs, develops and deploys its technology.

Now, with both products to play with, the combined company plans to create virtual-reality projects for industries including entertainment, manufacturing and education, Jones said. The company wants to replicate the immense virtual-reality success Ferris had with Buick's 2000 LeSabre promotion, he said.

With that project, virtual reality was in the driver's seat. Participants went along for the ride by donning headgear to virtually "test drive" a LeSabre, picking up Buick-sponsored pro golfer Ben Crenshaw along the way, he said.

The Buick project comprised eight minutes of changing scenes, including a bellman banging the car's hood to alert the driver of Crenshaw's presence, Jones said. Changing weather conditions added to the drama, he said. For example, it rained, and when the windshield cleared, the driver had been zapped to a different location. The experience assaulted the senses, Jones said.

"This virtual reality is very, very exciting," he said. "It's not the typical computer images, it's photo-realistic virtual reality."

The GameCom/Ferris version of virtual reality employs technology that films a 360-degree radius and creates a different experience for each person, he said. For the Red Barron project, GameCom/Ferris will incorporate the Red Baron's vintage airplane, putting riders into a virtual cockpit, he said. The company expects the project to be completed by mid-July, Jones said.

Other projects, though, are waiting in the wings, Jones said. GameCom/Ferris envisions extending virtual reality to museums, science centers and military and police training operations. The company also wants to double the 15 theme-park contracts it currently holds, he said.

"We think the key to the future of this industry is making PC (personal computer) games easy to play in an arcade setting," he said.

With the Ferris component, upcoming projects will continue building on the expertise built during the Buick project to provide a full-blown, "immersive" virtual reality experience, from smelling jet fuel or grass to hearing radio music or gunshots, said Steven Haag, GameCom/Ferris marketing director.

"Ferris has defined virtual reality as real - sight, sound, smell. You supply the emotions," he said.

The gaming and virtual reality industry's popularity stems from the reality it forges, he said. Immersive virtual reality will increase its hold in the entertainment and "edutainment" industries. Virtual roller coasters will join the equation, as will mine trains complete with the illusion of broken tracks. Edutainment will take participants on virtual trips to pyramids, and the professional training element will let cops fire virtual bullets at bad guys and help doctors treat phobic disorders such as fears of flying and public speaking.

Haag said GameCom/Ferris designs its products to stand apart from competitors. For example, GameCom's kiosks have color-coded computer-development housing units that easily can be slipped out by turning thumb screws, Haag said. The design renders tools unnecessary, making assembly, maintenance and upgrades easy.

"Every other video unit has to be broken into and surgery done," he said.

At some future date, GameCom/Ferris will break in a new corporate name for the combined identity, Jones said. They will probably seek advice from marketing companies and focus groups, but plan the GAMZ trading symbol, he said.

On the employment front, employee integration will mean extending stock incentives and relocating one Ferris employee to the Arlington headquarters, Jones said. Ferris has nearly 300 employees, including seasonal theme park workers, he said, and GameCom has seven employees.

A Ferris satellite sales office in Irving will be relocated to Arlington, Jones said. Also, completing the merger logistics the company will take two to three months of low-volume, behind-the-scenes work. The only items pending to make the merger official are filing a proxy statement with the U.S. Securities and Exchange Commission and conducting a GameCom shareholder vote, he said.

Ferris is privately held and will not require a shareholder vote to complete the deal. But the transition process also included having Ferris' and GameCom's financial statements audited, a first for Ferris, Jones said.

The immensity of the companies integration has proved to be - unlike the company's products - not all fun and games. The logistics have included providing GameCom/Ferris shareholders with shares in both companies, but not until the math was done to determine the correct distribution ratios. It also included complying with U.S. Securities and Exchange Commission regulations and making frequent trips to New York to meet with investors, he said.

"As you can imagine, the logistics of combining the two companies are monumental," Logistics aside, though, the interactive gaming meeting virtual reality means synchronizing the virtual reality experiences, sharpening the technical end and customizing promotions and advertisements for a wealth of potential clients, Haag said.

"It's a win, win, win situation," he said.


Contact Russell [e-mail]

©Fort Worth Business Press 2001

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