SOURCE: Novint Technologies

September 15, 2008 06:00 ET

Novint's Inflection Point

How Novint Got Past the Chicken and Egg

ALBUQUERQUE, NM--(Marketwire - September 15, 2008) -


Dear Friends and Shareholders,

A significant victory is unfolding for Novint. As many of you are aware, Novint has recently closed on a number of agreements with some of the world's largest game publishers. I would like to take an opportunity for the first time to write a letter to shareholders and friends of Novint in order to describe why these agreements are so important to us.

The most difficult challenge of any company creating a hardware product like the Falcon, which allows people to use their sense of touch in computing, is to enable enough content, video games in our case, to drive those hardware sales. In the past five months, Novint has signed five deals with five major game publishers including Valve, Electronic Arts, Eidos, Codemasters, and JoWooD. Between these publishers, Novint has signed over 40 AAA game titles, and now has over 50 million users who have games that we are adding Falcon support to. Through Valve's Steam® product, the leading online store for PC games, we will be marketing to more than 15 million active PC gaming users, all of whom are ideal early adopters for the Falcon.

Our upcoming titles include powerhouse games such as Madden NFL 08, Tiger Woods PGA Tour® 08, Tomb Raider: Anniversary, Half-Life® 2, The Orange Box, Mass Effect, Need for Speed™: Pro Street, Hitman: Blood Money, Battlefield™ 2, Operation Flashpoint® 2: Dragon Rising, and Left 4 Dead™. Closing on all of these games is a significant milestone for Novint, and after many years of hard work, overcomes what is in my view the biggest challenge we have faced as a company.

To understand the significance of the problem, look at historical examples like VHS players versus Betamax players, and more recently the HD standard versus the Blu-Ray standard. Content is the key to hardware success. To put it another way, the chicken and egg problem we have faced for years is, "How do you sell large numbers of hardware units without big video game titles to drive those sales, and how do you get the big game titles without a large number of users who own a Falcon?"

Indeed, we have found that problem to be true through experience. The way that Novint solved this chicken and egg problem, described succinctly, is in an innovative licensing model, where we acquire the 3D touch rights to games. We add the Falcon support ourselves as well, so there is very little cost for a publisher. The result is a model where there is strong upside for the publisher and Novint, with little cost to both of us. It is a strong win-win situation.

We will start to release the first AAA titles within a month and will simultaneously launch our largest marketing campaign to date, driven largely through relationships with the publishers. Through the deals with the publishers we will contact millions of gamers to let them know about the Falcon through emails, web advertising on our publishing partner's sites, through retail box inserts, and through Steam to its 15 million active users. We feel that the availability of these new AAA games, plus powerful new ways to market the Falcon and games, will drive both our hardware and software sales.

I personally have no doubts that 3D touch technology is one of the few technologies we will see in our lifetime that will fundamentally change computing. It is that significant of a field.

In my view, 3D touch technology will be on every desktop in the future.

Of course we will face other challenges, but we are confident in our vision of bringing this technological field to the world starting with video games and then expanding into many other markets. I believe we will look back on these past few months, and our closing on a great deal of content and games, as our inflection point.

Sincerely,
Tom Anderson
Chief Executive Officer

About Novint

Novint (OTCBB: NVNT) develops, markets, and licenses technology that adds high-fidelity interactive 3D touch to computing. For more information visit: www.novint.com

This press release contains statements that constitute "forward-looking statements." Investors are cautioned that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the statements made. Factors that may cause or contribute to such differences include fewer sales than expected, changes in industry conditions, litigation, and other risk factors identified in the Company's Form 10K filed with the SEC. The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this press release.

Need for Speed is a trademark or registered trademark of Electronic Arts Inc. in the U.S. and/or other countries. Battlefield is a trademark or registered trademark of EA Digital Illusions CE AB. John Madden, NFL, Tiger Woods, PGA TOUR and NBA are trademarks of their respective owners and used with permission.

Half-Life, Steam, and Left 4 Dead are trademarks and/or registered trademarks of Valve Corporation.

Contact Information

  • Novint Media Contact:
    Sabrina Cook
    Email Contact
    866.204.9333 x 3

    Novint Investor Relations:
    Email Contact

    US:
    Todd Fromer
    212.896.1215
    Garth Russell
    212.896.1250

    Europe:
    Herbert Strauss
    +43 316 296 316