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Another non-surprise as Gizmondo fails to become the mobile Xbox, goes titsup

It was the private boast of Tiger Telematics that the hand-held Gizmondo game console/mobile phone would be the Portable Xbox. And in the same week that Microsoft starts talking about not talking about a "rival to the iPod" from the Xbox stable, Tiger has filed for bankruptcy.

The rumours that Microsoft might do something in this space started when the word on the street was merely "a rival to iTunes" - but it exploded into Official Speculation, when Business Week got a quote from Xbox boss Peter Moore.

He says (quotes BW) "any Microsoft media device would have to leverage the company's most significant consumer strength, video gaming. It can't just be our version of the iPod."

Founders of Tiger Telematics have been telling anybody who would listen, for some time, that the Gizmondo was going to be able to run Xbox software. In most respects, the Gizmondo was a mobile phone without the ability to make phone calls. It was a Windows Mobile device. Several games companies who made Xbox games produced Gizmondo versions.

There, however, the link to Xbox ended.

However, the Business Week speculation goes further, and says that any Microsoft iPod-alike would be a games box. And, says Peter Moore, the Xbox brand would be the way to go, in the same way that Sony has lent its Walkman brand to the successful Sony Ericsson Walkman smartphone.

That has led http://spartanedge.com/blogs/spartanedge12/?p=9 some to speculate that the "portable Xbox" will be, not a response to the iPod, but to the Sony Playstation Portable. In fact, it's more likely to be a response to the Walkman smartphone; music, mobile, and some games-playing on a small scale.

The reason Microsoft sees iPod as a threat, says Business Week acutely, is not that it might lose some revenue in music sales. Rather the threat is to Microsoft's DRM relationship with the music industry, where Microsoft has a long-term strategy to become an integral part of music distribution. The history of Windows Media Player is where to read this strategy's evolution.

What Microsoft fears, according to that analysis, is that the iTunes channel and associated DRM technology will become embedded in the record business.

Tiger Telematics had an alternative strategy, to move into the video business, downloading rock videos into the Gizmondo in exchange for advertising clips.

The failure of Tiger surprised nobody, but nobody who was expecting the collapse is going to explain their reasoning.

One industry watcher, insisting on absolute anonymity, put it this way: "If you want to know why Gizmondo was never going to succeed, look at the list of people on the Board. There's a history there; there's a name on the Directors roll which anybody in the industry would look at, and say: 'No way.' But there's also a history of litigation, and I really can't say anything on the record."

Last word with Joystiq's Christopher Grant: "The video game world has been rocked by the news that one of the true giants of the industry has filed for bankruptcy protection in the UK, their homeland. At least that's the way Tiger Telematics would prefer the headline to read; in fact it reads something closer to this: comically ugly video game console hemorrhages money, almost kills company..."

The company is not being wound up; it's asked for administrative receivership while it restructures. Nobody has gone into print  suggesting that they expect a rosy future after that.

 Tags: Gizmondo, Tiger Telematics, Xbox, Walkman and DRM not to mention iPod or iTunes