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Signature Devices, Inc. (OTC: SDVI)
Untitled Document
Signature Devices, Inc. manufactures, develops and markets advanced information technologies, including computer systems, software, and electronics products. The Company's primary business is creating, developing and publishing interactive games for consoles and personal computers. SDVI has developed software for the world's top game publishers, including Electronic Arts, Crytek, Expresso Fitness, and SNK Playmore. In addition, it has contributed to several leading game titles such as Samurai Showdown, Medal of Honor, Far Cry and Paradise Lost.
Through its wholly-owned subsidiary, Graffiti Entertainment, LLC, the Company develops and publishes software for video games and commercial products. Graffiti Entertainment has recently received the rights to develop a new XBox LIVE Arcade game, potentially generating future sales to millions of XBox consoles gamers. The Company has developed a special platform that combines hardware and software solutions and enables production of high quality images and graphics for game developers. In addition, SDVI has exclusive license contracts with console manufacturers such as Nintendo, Sony and Microsoft to publish and develop software for their platforms. SDVI recently announced the planned launch of a 'Web 2.0' gaming community web site in November 2007 which will offer a host of gaming and entertainment services to subscribers at affordable prices.
Huge industry offering significant growth opportunities
The US entertainment and gaming software industry generated annual revenues of about $8 billion in 2006, a three-fold increase since 1996. Industry sales are forecast to rise to $10.2 billion by 2011. SDVI already serves the leading game publishers as a consultant, with more than four years experience developing software, embedded systems and electronics. Signature Devices also plans to publish game titles developed by others, providing marketing and sales support. Through this strategy, the Company minimizes capital costs and time-to-market and positions itself to quickly capitalize on industry growth opportunities.
Focused on the growing console games segment
The Company is focused on the console game market, which contributed about 83% of entertainment and gaming software industry revenues in 2006. SDVI is developing and publishing games for all of the leading consoles including Nintendo DS, Nintendo Wii, XBox 360 and Playstation Portable (PSP) and Playation 3. The video games market is expected to reach $54 billion and produce 16.5% annual growth through 2009. Rising demand and the introduction of new game consoles with more advanced technology will be the main growth drivers for the video games market. Since Signature Devices mainly caters to this segment, it is well positioned to benefit from expanding demand for console games.
Launch of gaming web site taps $5 billion online gaming market
The Company plans to launch a 'Web 2.0' gaming community in November 2007. It will offer free games to subscribers and provide deep discounts on
existing and future products from its Graffiti Entertainment subsidiary. Through the launch of this virtual community, the Company expands into the lucrative online subscription-based gaming market, which is expected to reach $5 billion in North America. In addition, SDVI will be able to participate in the in-game advertising market, which is forecast to reach $400 million by 2009. The Company expects to tap the potential of both of these opportunities to boost top-line growth.
New products in the pipeline add to revenues
Signature Devices has a large pipeline of novel new gaming products in development. The Company will be publishing several new game titles with third party game developers, including Mazes of Fate for Nintendo DS which is scheduled for completion in the fourth quarter of 2007, Project Exile for first quarter of 2008, Air Conflicts for PSP and Red Cell for PC, to be completed by mid-2008 as well as several other unannounced titles in 2008. SDVI is also developing a game for XBox LIVE® Arcade and is in talks with several other developers regarding publishing their games. These new game launches will expand the Company's product line and potential revenues.
Patent filed for a wireless product addressing $3 billion market
In August 2007, Signature Devices applied for a patent for 'RangeBox', an innovative technology that extends the range of wireless technology. The new RangeBox technology reduces the number of access points needed for wireless networks and minimizes signal interference from other sources that hinder performance.
Acquisition strategy for growth
Signature Devices plans to supplement internal growth by acquiring other companies in the game development space. The Company has identified several potential acquisition candidates and is in talks with a number of these companies regarding mergers.
Strong management team
The Company is led by a highly experienced management team and excellent support staff. CEO Kenneth Hurley, COO Philip Engstrom formerly from Electronic Arts and Vice President of Creative Development Lance Alameda have more than 55 years combined experience in the gaming industry. SDVI's development team consists of industry veterans who have worked on all the most popular platforms. The Company recently recruited Philip Engstrom as its COO. Mr. Engstrom has an extensive background in all aspects of video game development and technology management.
 

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