Bankruptcy
On January 23, 2006, the UK based arm, Gizmondo Europe (GE) declared bankruptcy. Gizmondo haemorrhaged hundreds of millions of dollars before filing for bankruptcy: in 2004, Tiger Telematics reported a loss of $99.29 million, and between January and September 2005, they lost $210 million, "Principally due to development costs for the Gizmondo and non-cash expenses associated with shares of restricted common stock issued for services". In other words, it had bartered shares in lieu of cash payments. Soon after Gizmondo retail locations in both the US and the UK closed, and the Gizmondo website was shut down. The game development arm of Gizmondo also went out of business.
The company was also involved in litigation. Swedish Ogilvy Group, MTV Europe, Christian and Timbers (landlord to their office), Handheld Gaming and Jordan Grand Prix all filed million dollar lawsuits against the company. Gizmondo is currently under investigation in the UK for approximately £25-30 million owed to HM Revenue and Customs.
In early February 2006, the High Court appointed two liquidators. David Rubin & Partners was to deal with the sale of the company's assets, thought to amount to little more than the furniture in its Regent Street showroom and Begbies Traynor was asked to investigate exactly where Gizmondo's money had gone. The 27 staff remaining at Gizmondo's head office in Farnborough and five at its London store were made redundant. No Gizmondo accounts for 2005 have been published. But internal figures show sales of just £1.4m in the first nine months of the year. Losses were equivalent to £500,000 a day. Directors' salaries amounted to £6.6m for the nine months. Leasing cars cost £2m-plus.
The console was deemed the worst console of all time by Gametrailers because they claimed it drove Tiger into bankruptcy.
Read more about this topic: Tiger Telematics
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