amBX: Not so ambient now

We asked CEO Neil MacDonald and chief marketing officer Jo Cooke to give us a deeper perspective:

Why leave the comfortable and financially secure womb of Philips?

Neil MacDonald: A-ha, the obvious question! The amBX technology was developed in Philips Research but it’s absolutely clear that the potential for amBX goes way beyond Philips’ own products and marketing reach. To achieve its potential, amBX needs to be an independent business and seen as unaligned with large industry players. That’s why we have taken this bold step.

How large a shareholding in amBX does Philips retain? Does it have representation on your board?

MacDonald: Philips is a partner in the fund that is the majority shareholder in amBX Ltd but does not have a seat on the board or any other representation. Philips will benefit from the success of amBX, but purely as a shareholder or commercial partner on normal market terms. amBX is a truly independent business.

Can you give us any further indication of the structure of the company, now that it’s been spun-out?

MacDonald: The Board of amBX is made up from the chief executive Neil MacDonald and two representatives from Prime Technology Ventures who manage the fund that has invested. Monish Suri, a partner at Prime Technology Ventures, is the non exec chairman. The inventors of amBX, David Eves and Dr. Richard Cole are members of the management of the new company, along with Jo Cooke, chief marketing officer, and Paul Mitchell, sales director.

What did Prime Technology Ventures see in the potential of amBX that most excites them?

MacDonald: What excites all of us – apart from the technology itself – is the chance to make amBX a standard for ambient experiences and effects from digital content wherever it is played, viewed or listened to. It’s more than a gaming technology and Prime share the vision of the amBX team to bring it to all the entertainment markets that we can. It didn’t take them long to understand the ambition we have, and to back it!

Early days, but what’s Prime’s exit strategy? Do they see amBX ultimately being acquired if and when it fulfils its potential, or do you think in a calmer financial climate amBX might seek a public offering?

MacDonald: Clearly VCs invest for a return but that return will be delivered through the success of amBX. It’s too early – only week three! – to identify how an exit for early stage investors might happen.

What practical or legal consequences in terms of working with other manufacturers makes being an independent company more attractive? Or is it more a question of perception?

MacDonald: It’s both. In practical terms we can determine our own policies, trading terms and so on without having to conform to those of a well-established large multinational organization. We can move quickly and change rapidly without consideration for multiple other business lines or activities.

The reality of being a self-determining independent business is vital for the positioning of amBX to developers and publishers, platform owners and hardware vendors. It gives reassurance to all that you get what you and see and there is only one single purpose in amBX.

Jo Cooke: Being independent will also make it easier to work with manufacturers who may have felt that working with a Philips company was a conflict as they were competing hardware companies.

What is the game development industry’s attitude towards amBX at the moment?

Cooke: Whenever we demo amBX to developers, the first question we get asked is, "How can I get this in my living room?" The development community has always seen and understood the vision we have of amBX as an innovative technology driving future entertainment experiences.

Any present concerns have always been around implementation time, and cost and hefty licence contracts. We are now in a position to change that and are currently developing a partner program which will mean developers can download the amBX SDK from a dedicated partner website with a forum and on-line tutorials. Our goal is to provide a best in class SDK and supporting tools.

MacDonald: I sense that the industry is waiting to see how we do now we are out from Philips. I also sense that there is recognition that we could now be better to do business with and it’s certainly my intention to prove that.

Are you still working closely with studios and offering any seed funding for bespoke amBX support in games, or is it something they should now support themselves via your libraries and so on?

Cooke: We still intend to work closely with studios, particularly on blockbusting games like we have recently done with Ubisoft on Far Cry 2. However, the partner program and on-line support will mean that developers will have a choice on the level of amBX implementation they want to add to their games and how they go about doing so. The new SDK will enable them to implement amBX into all their games as matter of course.

What do you think is the awareness of amBX among gamers?

Cooke: The word is definitely out about amBX amongst the hardcore gaming community. Attending events like Quakecon, VG expo and the Blizzard Worldwide Invitational has shown us that the core PC audience gets very excited about amBX. Our forum is constantly bombarded with questions from gamers asking when will games like World of Warcraft or Warhammer be fully amBX-enabled – currently amBX lighting effects work with them.

Far Cry 2 with amBX has now launched. The Guardian On-line already observed that the best way to play Far Cry 2 on the PC is with amBX!

We expect that the move to console will be when we attract the more mainstream gamers, as we are regularly asked when amBX will be available for console.

How have existing amBX products fared so far in the marketplace?

Cooke: It is fair to say that the launch of the first PC products has been slower than anticipated by Philips when they launched them. However we know that this is not because of lack of interest from PC gamers. Distribution, availability and an initial high price were the key factors.

So we have learnt from that. As we speak, amBX kits from Philips with new bundled games like Brothers in Arms: Hell’s Highway and Far Cry 2 are being distributed into stores in the US such as CompUSA and Tiger Direct for the Christmas season, and bundles with graphics card and amBX kits from POV are now readily available, all with competitive pricing.
New kits from other manufacturers will follow. As an independent company it’s much easier for us to license amBX to other hardware companies.

MacDonald: I found there was a lack of recognition of what was actually in the box in the channels that Philips had distributed to. We’ve spent a lot of time working on that to make the distinction clear between the hardware offering and the amBX technology inside that will deliver the experience. The bundles now shipping make that very clear. Take up of the current product is extremely encouraging as we enter the peak retail season.

Do you see current and near-term products as a loss-leading toe in the water until volumes pick up and hence your licensing revenues build, or would you expect amBX to be a profitable company in the nearer term?

Cooke: As an independent company it is essential that we look to generate revenue streams from the beginning and as a technology license business we are licensing amBX into all our core markets including gaming. We see many opportunities for amBX in the near-term.

MacDonald: The creation of the new amBX company has been done to promote amBX as a new standard and this requires substantial investment to develop the proposition and bring it into new sectors. We’re here for the long-term.

Has there been any progress on the film and music fronts? It seems you’re still making more in-roads with games at present?

Cooke: In parallel to the games industry we have been raising the awareness of amBX in the other core entertainment markets. Consumers will soon start to hear about amBX and experience it in other contexts beside games.

MacDonald: We have just released amBX software that enables users to create their own effects and customize their experiences, and we have amBX working on music and movies already, although not in released versions yet. It works brilliantly on Guitar Hero already, by the way, although only on PC so far.

Are you concerned about selling a still-novel consumer technology product into the market ahead of a recession?

MacDonald: The experience of consumer behaviour during recession points to people spending more time getting their entertainment at home. That’s actually positive for the games industry as a whole, as in borne out in a number of recent announcements and results, and therefore very positive for amBX.

We’re always very keen to point out that amBX gives you whole new experiences from existing games and content as well as in new releases, so we’re not dependent on continued take up of new games.

What’s the roadmap for 2009?

MacDonald: We’re pushing further into the games sector than ever before and we have big plans for music and movies, too. We will be working very hard to make it easier than ever and very inexpensive for content owners and developers to add amBX enhanced affects to their content, and you will also see amBX in some very unexpected places!

In terms of markets, we will be primarily focusing on Europe and US. We will also be targeting professional sectors as well as consumer entertainment markets to spread the word and excitement of amBX.