isn't sold. I should have been clearer.
If company A buys 30M worth of hardware (and is unable to sell it*), that
company still has 30M in assets. This is reflected on the balance sheet
and adds (really just shifts) to the value of the company. So if Infinium
does put all the money they raised in whatever equity vehicle, it's not
like the investors suddenly own equity in a worthless company. They may,
or may not, own paper in a company with poor business model though.
Personally, I this is an idea I would like to come true. I don't know if
the laws of economics will allow it to. I'm almost assured that the gaming
industry will do it's best not to. The console industry is based on the
myth that it is ok to loose money on the hardware because the real money is
in software sales. Microsoft has been operating under the assumption since
day 1. Sega conceded to this myth when they stopped making hardware to
concentrate on software. I call it a myth mostly because I'm not convinced
it is true. This type of innovation is not well received by the
established game developers nor the standard distribution channels. Not
only will game specific retailers like GameStop be whole heartily against
such a venture but I can imagine that Walmart wouldn't be too pleased either.
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