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Google, Amazon, Tencent, and Xiaomi are reportedly among those consider an offer

What happens when you have a struggling console maker who proved its product not to be vaporware, but still failed to live up to its own hype?  Sell to a veteran with money to spend on fostering a console product or in using the startup's features to enrich its existing device line. That's reportedly the approach Ouya Inc. is considering, according to a new report by RE/Code's Kara Swisher and Eric Johnson.

I. Great Expectations

Ouya started on a simple premise -- make a microconsole based on Google Inc.'s (GOOG) Android operating system with a library of indie games.  Launched in 2012 the projected featured a who's who of industry talent:
  • Julie Uhrman: former content distribution VP at News Corp. (NWS)(NWSA) site IGN
  • Ed Fries: former Microsoft Corp. (MSFT) VP and one of the creators of the Xbox console
  • Muffi Ghadiali: an early creator of, Inc.'s (AMZN) Kindle e-reader
  • Yves Béhar: top Swiss born branding and design expert specialing in devices
Within eight hours of launching its Kickstarter, Ouya had already capitalized on substantial media buzz, netting $1M USD in crowdsourced funding.  In the next three days it scooped up $5M+ USD in funding.  The funding closed in mid-August at ~$8.6M USD, making it the second best-funded project in Kickstarter history.  Defying skeptics and critics, Ouya managed to launch its crowdsourced console in Jun 2013 priced at $99 USD.

Ouya console

So far the console has had mixed results.  While it's raised a lot of crowdsourced capital, delivered its product, and established a sales presence on online retailers such as Newegg and Amazon, it also has struggled in some regards.  Early reviews were lukewarm at best and early sales have been disappointingly slow after the Kickstarter buzz.

One key cause of its struggles has been its game libary and policies.  Initially it demanded all developers offered their games for free, at least on a trial basis.  This alienated some developers.  As a result the game library is rather paltry, with around 850 available game titles [source], plus some media apps.  Add in emulators for the Commodore64, SNES, Gameboy, Playstation, N64, and other popular consoles and the playability dramatically expands, but true native content remains scarce.  Adding up emulators, utility apps, and games, there are only 919 official titles for the platform. 

Ouya has tried to jump start developer interest by offering a $1M USD "Free the Games' fund which will match successful Kickstarter game projects' crowd-raised total.  But this too has backfired amid ugly accusations of developers rigging the system by donating to themselves to loot Ouya's fund.

The console also has competitors, particularly Mad Catz Interactive, Inc.'s (MCZ) M.O.J.O. console, a $199.99 USD box.  Unlike Ouya, Mad Catz is pushing compatibility for its console, and hence has access to a far broader array of Android tiles.

Mad Catz

Aside from the Ouya-distributed titles listed above, some Android titles can be side-loaded onto Ouya's console, but it trails Mad Catz's M.O.J.O. in being fully compatible with titles available via the Play Store on Android smartphones and tablets.  The NVIDIA Corp. (NVDA) Shield gaming/streaming Android device could also be viewed as a more compatible competitor to Ouya.

II. Buyout Rumors Intensify

The upsides appear to be tempting several parties to consider a bid for the startup.  Among those rumored to be in early talks, according to a report by RE/Code's Kara Swisher and Eric Johnson, are:
  • Xiaomi Inc. (Chinese device maker; #5 in global smartphone market)
  • Tencent Holdings Ltd. (HKG:0700) (Chinese; fourth largest internet company in the world)
  •, Inc.
  • Google Inc.
The report states:

Sources said the talks are early, but that the company considers it one of its more likely options rather than raising more money. There are no current offers on the table, said sources, but the talks are proceeding.

Ouya already has a relationship with Xiaomi, which recently added its game catalog to its settop boxes and Smart TV portfolio.  Most view Ouya's struggling developer program as a dead end, perhaps, but there's still interest in acquiring Ouya as a means of accelerating the development of an in-house microconsole rival to Sony Corp.'s (TYO:6758) PlayStation 4, Microsoft's Xbox One, and Nintendo Comp., Ltd.'s (TYO:7974) WiiU.

Ouya apps
Ouya's app catalog has over 900 titles.

Earlier this year the world's largest electronics market, China, lifted its long-standing ban on console sales.  While Microsoft, Sony, and Nintendo are expected to see some sales in the region, their consoles may be too expensive for many Chinese buyers.  Chinese firms are eyeing microconsoles as an option to sate Chinese demand for lower cost consoles.  While Ouya may be struggling, it is one of the few such projects not backed by a major corporation to make it to having a released consumer product.

Interest from Google and Amazon likely comes in part due to the potential value of incoroporating Ouya's technology into smart TV or set-top boxes.  Google is rumored to be eyeing making a Nexus microconsole; Ouya could provide a boost to that effort.

Ouya is rumored to be struggling financially after its week 2013-2014 sales.  But it may yet turn its mixed tale into a more-resounding story of triumph, if it can woo a well-heeled buyer to scoop it up.

Source: RE/Code

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Ouya is a terrible idea bred by greed.
By someguy123 on 9/2/2014 9:21:50 PM , Rating: 5
Ouya catered to one of the smallest markets imaginable: people who wanted android games but didn't have ANY devices that could play games well enough considering most (if not all) popular android games had builds on other platforms. They call themselves "indie centric", meanwhile their profit cut is the same amount as other distributors if you want to distribute via ouya's portal. Specs were average during launch and are now horrible. No in-house development groups to push the console and no novel features to the console itself.

Thing existed entirely as a way of ripping off naive, rabid "indie" fans, and it worked pretty damn well. I don't see why any of these companies would buy Ouya when they could easily create their own gaming platform of superior quality.

RE: Ouya is a terrible idea bred by greed.
By ProfFarnsworth on 9/2/2014 10:45:25 PM , Rating: 2
You wouldn't believe the amount of people who thought that this thing would be more porwerful than a 360.

Glad that this is bombing hard.

By karimtemple on 9/3/2014 9:51:34 AM , Rating: 2
Yeah, before it came out I kept saying "all they had to do was wait six months" for the mobile GPU generation after Tegra 3's (Adreno 320, Tegra 4), which was like 250% as powerful and is competitive to this day.

But aside from that, the entire business plan was poorly-designed, and they went TOO bargain-bin on the parts (they later released a $130 version which fixed that). It certainly was a nice thought though, and honestly I believe that someone should try again.

As a streaming device though, it excels. $100 with a controller? If the Ouya group was smart enough to make (or license) software like this [] that streamed from nVidia and AMD GPUs? Good God.

By stm1185 on 9/2/2014 11:47:05 PM , Rating: 2
They never made that killer game that could move units, nor did they do enough to even make it appeal more than competitors like the FireTV.

I think it is silly to try and enter this $100 console market right now. Even buying Ouya you got bigger people with marketing and technical muscle to fight off. Maybe just Amazon right now, but Apple with its Metal API could be poised to turn AppleTV into a more console experience. Or Nvidia expanding Shield into a $100 console.

By hpglow on 9/3/2014 12:21:01 AM , Rating: 3
Your first paragraph says enough to tell anyone that you have no idea what you are talking about. The OUYA had nothing to do with tablet gamers. They wanted to address indie gaming and fix the fact that many tablet games controlled horribly through touch controls. They failed because the quality of the controller initially was horrible and because of the Tegra 3's abysmal GPU. With nvidia sponsoring them you think they could have gotten better. Anything with polygons looks terrible on a 55" TV.

RE: Ouya is a terrible idea bred by greed.
By Argon18 on 9/3/2014 10:55:09 AM , Rating: 3
"Ouya is a terrible idea bred by greed."

You couldn't be more clueless and wrong. I'm a consumer, not a developer. Here's what I was in the market for:

- Low cost console for occasional casual gaming
- Low power consumption, no noisy fans or heat
- A real solid-feeling wireless controller
- All the emulators to play SNES, PSX, N64, roms.
- XBMC to stream my media library
- 1080p video output

Ouya checked all those boxes perfectly, and all for under $100. It "just works" out of the box, as a console should. Could I have built something similar using a micro-pc and some Linux distro, and some trickery and hackery? Of course. But not for $99. And I didn't want another project, I wanted an appliance. Ouya was a perfect fit for me.

Ouya is not a PS4 or XBOX replacement. It was never intended to be. The foolish reviewers and ignorant consumers who thought it was, are idiots.

By karimtemple on 9/3/2014 1:57:01 PM , Rating: 2
That isn't really how the Ouya was marketed at all, so I don't feel like this is a strong argument. I'm not saying I agree that it was "bred by greed," just that the argument you chose was less than ideal.

It does matter how much the Ouya group charges to publish games in its store. And it does matter that while it gets a lot right, it also gets so much wrong. The box only helps address problems with the mobility and visibility of indie software if people actually buy it.

And once they do, the primary feature of the box itself should actually be a game (-slash-app) store with a novel and in-depth promotion system and search. That store and system would really be more of what the "Ouya" (or whatever) is than the box itself. That is, if your goal was to address what the Ouya was marketed as addressing.

Someone really should try again.

By OnyxNite on 9/4/2014 3:26:06 PM , Rating: 2
They were not catering to people who didn't have ANY devices that could play games. Many of their target audience already had perfectly capable phones but didn't want to be limited to lousy touch screen controls or have to keep their phone connected to their TV.

The lack of in-house development is indeed a huge issue and they tried to make up for that by billing themselves as pro-Indie vs. the big evil corporations but ultimately this approach failed.

The specs were also poor but the idea was supposed to be that since it was based off of the rapidly improving mobile hardware they would be able to iterate quickly so a Ouya 2 would come out a year after the first one and the Ouya 3 a year after that, etc. taking advantage of mobile SoC advances. This rapid release cycle would make it so they'd be on like the Ouya 8 or something before the PS5 or Xbox Two came out and by then the Ouya 8 might even be better than the PS4/Xbox One just like the Ouya 2 or 3 might have been better than the Xbox 360/PS3. Since they failed so miserably though they never did well enough to do that kind of rapid iteration.

The basic idea of a cheap gaming/streaming device is solid though and lives on in Amazon Fire TV, PlayStation TV, and possible upcoming Apple TV and Google TV products. Heck MS might even release something similar with Windows 9 on ARM or something next year. It just needs to be done by somebody who has an ecosystem to support it.

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis

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