Although virtual reality company Superscape VR Plc’s aggressive growth strategies have required heavy investment, and rewards have not been instant, the company looks set to fly on the back of a deal just signed with Microsoft Corp. The Hook, UK-based company has completed a worldwide licensing and distribution deal with Microsoft that will see Superscape’s […]
Although virtual reality company Superscape VR Plc’s aggressive growth strategies have required heavy investment, and rewards have not been instant, the company looks set to fly on the back of a deal just signed with Microsoft Corp. The Hook, UK-based company has completed a worldwide licensing and distribution deal with Microsoft that will see Superscape’s three-dimensional Web browser Viscape (CI No 2,881), bundled with Microsoft’s Internet Starter Kit. The kit in turn is to be merged in to Windows95 operating system, giving Superscape access to what chief executive John Chiplin described as distribution levels beyond our wildest dreams. Superscape has already seen impressive revenue growth in the year to July 31, up 145% on last year at 3.9m pounds, but losses are also, as predicted, up to 2.9m British pounds from 1.7m pounds last time. The City seems slightly less convinced however, as shares reversed their immediate euphoria, and yesterday dived 60 pence to 505 pence after putting on 162.5 pence on the Microsoft deal. On top of the reported revenue, it also expects a further 1.6m pounds from its software licensing agreement with Northern Telecom Ltd (CI No 2,804). As it said at the half year stage (CI No 2,910), Supers cape has been gearing up its technical and marketing team to be able to capitalize on the explosive growth of the Internet market, where it sees ever more opportunity for its real-time three dimensional software. The costs involved in this growing t he team are a factor in the company’s increased losses this year. Superscape says in addition to Microsoft, Intel Corp, Northern Telecom and other large corporations have adopted Viscape to publish their Web sites, and it believes the technology wil l be ever more in demand as the use of corporate intranets increases. Chairman Martin Hornby says the Microsoft deal is the most significant thing to happen to the company since its launch in 1983. Chiplin would not give details of the financial dea l with Microsoft, but the bundled version of Viscape will be the evaluation copy, valid for 60 days only. Customers wishing to continue using it will need to pay Superscape $29 for the full copy. In addition to this revenue stream, the company is convinced the deal will open up a whole new market for its virtual reality authoring tools, which is where it has always planned to make its money. Hornby suggests the coming year is one in which the company needs to stamp its mark and win market share in the real-time and virtual reality market. It therefore intends to continue investing substantially in sales, marketing and product development to achieve this. Consequently, Hornby makes it clear shareholders can look forward to further losses next year, while the group pursues its fast growth plans. Whether the Microsoft deal will change the picture for next year remains to be seen. In line with policy, there will be no dividend.