Business, Gaming, VR World

Ouya Inc. Searches For Buyers Amid Crushing Debt

Ouya Inc., the makers of the flagging $99 Ouya microconsole, is looking to sell off its company to meet its overwhelming debt, Fortune reports.

After debt negotiations fell through, the company’s execs decided to put it up for sale in an effort to “recover as much investor capital as possible”. Although we don’t know how much Ouya Inc. is asking for, it’s been revealed that investment bank Mesa Global will be handling the sale.

The news has been confirmed by a leaked e-mail from Ouya CEO Julie Urhman:

“Our focus now is trying to recover as much investor capital as possible,” Uhrman wrote. “We believe we’ve built something real and valuable. I continue to read the tweets and emails of our fans who play OUYA every day, and our catalog is now over 1,000 apps and 40,000 developers. We have the largest library of Android content for the TV (still more than Amazon) — hells ya!”

Back in 2013, the Ouya micrconsole raised an incredible $8.5 million in Kickstarter crowdsourced funds, becoming the highest-grossing project in the site’s history. The Ouya was seen as a new revolutionary jump in Android-powered consoles thanks to its open and free nature.

That same year Ouya Inc. received a joint $15m in investment capital from big-name firms like Shasta Ventures, Occam Partners, Mayfield Fund and even Nvidia (NASDAQ: NVDA) who makes the micro-console’s chips.

Despite these investments and pioneering the Android set-top box space, Ouya console sales have flagged tremendously in the retail market.

Read More: Nvidia’s New Shield Console Leads the Charge in Next-Gen Android Gaming

Meanwhile competitors have injected their own competitively-priced micro-consoles to vie for dominance over the living room. Devices like Nvidia’s $200 4K-ready Shield Console, Madcatz’s $129 M.O.J.O., and Razer’s $99 Forge TV are all directly aimed at pushing the beleaguered Ouya out of the space.

Xiaomi Mii Box

Chinese mobile giant Xiaomi signed a deal with the gaming startup to bring the Ouya’s app and games marketplace to their set-top boxes.

Ouya decided to change tact and offer up the one thing it had that other’s didn’t: it’s expansive catalog of software and games.

What will happen to Ouya?

In the start of 2015, Chinese e-commerce firm Alibaba (NYSE: BABAnegotiated a $10m deal to use the Ouya’s expansive software library to power Alibaba’s own forthcoming set-top box. Leading Chinese smartphone-maker Xiaomi also signed a deal to utilize Ouya Inc’s framework in the company’s new line of Mi Box devices and smart TV’s.

But like the other efforts, this proved to be unsuccessful. The main reason Alibaba and Xiaomi expressed interest in Ouya’s framework is that the micro-console market is just now emerging in the region. This is largely due to China lifting its 13-year ban on games consoles.

The Ouya's games store is one of its biggest assets, featuring a wide variety of titles from over 40,000 developers.

The Ouya’s games store is one of its biggest assets, featuring a wide variety of titles from over 40,000 developers.

Buyers will likely be attracted to the Ouya’s digital apps and games marketplace, which could be quite profitable in the right hands. The IP itself could even be refreshed, with a beefier “Twouya” to hit the market and compete with other Android set-top devices.

If handled carefully, it might be able to convince buyers to snag the entire company rather than its key pieces, but it depends how badly–and how soon–it needs money. Bankruptcy is always and option, as is carving off lucrative parts–like the software library–to sell in piecemeal negotiations.

It’ll be interesting to see what the future holds of Ouya Inc. It may close altogether, ruined by debt and crippling console sales, or go on to live exclusively as a digital software library that powers set-top boxes across the globe.