Phantom Entertainment

The Phantom had an online release on August 17, 2003 with basic hardware specifications and a price of "below $399".[21] Options included customized hardware and the PhantomNet (a gaming-content service), priced at $9.95 a month. A sale date for the first quarter of 2004 was set. It was missed; the company later claimed it would go on sale in November for the holiday season, although it had not developed online-delivery software, licensed games or found any retailers. The second deadline was missed, with Infinium sending thousands of faxes claiming that the system would be released in January 2005.

When that deadline passed, Infinium predicted the system's release for around March 2005. That date also passed, and Infinium Labs was absent from the 2005 E3.[22] Kevin Bachus (former Infinium CEO) hinted that the Phantom would be released around the same time as the Xbox 360 in fall 2005, but that date was also missed. By August 2006, the Phantom Console was removed from the products page of the Phantom Entertainment website.

The company was unable to raise its projected $30 million to complete the Phantom and announced it would downsize and focus on the Phantom Lapboard, a wireless keyboard for home use. On May 16, 2006, the Securities and Exchange Commission accused Phantom Entertainment founder and former CEO Timothy Roberts of running a "pump and dump" scheme in promoting the Phantom console in 2004.[23] The Phantom lost credibility in the gaming and business worlds because its release date was continually pushed back, and because of financial scandals involving Phantom Entertainment (which lost more than $62.7 million since its creation).[24]

On January 3, 2006, Infinium Labs announced that the lapboard component of the console (a keyboard and mouse designed to be held on the lap, for example, seated on a couch in front of a television) was due to be released to online retailers by the second quarter of 2006.[27] On April 19 it announced that the keyboard would not be released in time for Q2 2006, but the device (manufactured by Itron Technology) would be released in North America and Europe "no later than October" 2006.[28] On August 15 it was announced that the price for the Lapboard would be $129.99, with customers who preordered receiving a $30 discount.[29] The keyboard was then delayed until November.[25] On August 22, 2007, Phantom Entertainment signed an agreement with ProGames Network to provide Lapboards and it's game services content in hotels worldwide[14] as well as with Alienware for their media center PCs (Alienware later pulled out of the agreement in December 2007 due to another delay in Lapboard's launch).[30] The keyboard was finally released on June 23, 2008,[31] two years after its originally planned release date.

White Lapboard

In April 2008 Maximum PC published a preview of the lapboard, describing it as "extremely promising" although the supplied mouse "experienced signal dropouts at a distance of about 24 inches from the sensor". The author was able to use other wireless mice successfully. The preview states that the peripheral will be available in "June for $130 in limited quantities".[32] In the actual review, however, Maximum PC gave the Lapboard a verdict of 4 out of 10 saying: "The bottom line is that this thing is bad. The mouse isn’t good for gaming, the angled keyboard is awful for typing, and for media playback you’d do much better with a slimmer wireless media keyboard with a built-in trackpad or ball, which are available for significantly less than the Lapboard’s $140 asking price." On July 20, 2009, a sample lapboard received a favorable review from the Hardware Heaven website.[33] Despite its lukewarm review, in May 2010 About.com included the Phantom Lapboard in its Father's Day gift guide.[34][35] On July 19, 2010, Michael Welter posted a generally positive review of the Phantom Lapboard on Missing Remote.[36]

In September 2003 HardOCP, a computer-hardware news website, published an investigative report by writer Steve Lynch critical of Infinium Labs and its founder.[37] On February 19, 2004 Infinium Labs' lawyers sent a cease and desist letter to HardOCP's editor demanding that the news site take down the article, claiming that it "painted a portrait of a company intent on swindling the public" and threatening to file a defamation suit. Rather than concede to Infinium's demands, HardOCP owner Kyle Bennett filed a lawsuit for a declaratory judgment that his company had done nothing wrong.[38] Infinium Labs then filed suit in Florida, denying that Texas was the proper jurisdiction (although it had previously maintained a staffed office in Richardson).[39]

In September 2004, the judge required Infinium Labs to produce a number of financial records, including Roberts's personal income-tax returns, by the end of that month. Because the company failed to produce the required documents, HardOCP won a court order compelling them to do so. The judge ruled that sanctions would be awarded to KB Networks and Kyle Bennett in an amount to be determined by the court (later reported as $50,000).[40] Infinium Labs settled the suit, agreeing to drop the pending Florida suit, and admitting all allegations of KB Networks' Texas complaint; they paid $50,000 to end the suit.

In October 2005, it was reported that the U.S. Securities and Exchange Commission (SEC) had notified Tim Roberts that charges were pending against him for violating federal securities laws.[41] In a statement about the notice, Infinium said it was not notified of specific charges, but suspected they were related to an SEC investigation of the unlawful promotion of penny stocks (including Infinium's).[42] Roberts hired a stock promoter to send faxes claiming that the Phantom console's release was imminent, and the company's stock price might increase as much as 3,000 percent. The SEC alleged that the company never intended to release the console at the promised time due to significant unresolved "technological and manufacturing hurdles", and the faxes were part of a pump and dump scheme on the part of Roberts. Roberts reached a settlement with the SEC in which he was barred from serving as an officer or public director of a public company or participating in penny-stock offerings for five years and paid a $30,000 fine.[43]

When Roberts was CEO of Infinium, the company failed to report a substantial amount of interest and penalties on unpaid payroll taxes.[44] From its inception, the company had consistently reported a small amount of cash on hand amid extensive (and increasing) debt.

In January 2006, Infinium Labs reached an agreement to borrow up to $5,000,000 from Golden Gate Investors to finance the manufacturing of the Phantom Lapboard, scheduled for release later that year. This would have been the largest amount of money Infinium Labs had ever borrowed at one time. The loan would have been repaid over three years, with an option of repayment with shares of common stock.[45]

In February, GameSpot reported that Phantom Entertainment was suspending the Phantom Game Service to develop the Lapboard. An SEC filing showed three-year losses in excess of $62.7 million, over half of which was marketing for the company and unreleased products. Over $24 million was spent on salaries and consultants, and $2.5 million on development. Infinium claimed it still intended to release the Lapboard if its financial situation improved,[46] but it missed release dates for the second quarter of 2006, October 2006 and November 2006. On August 15, 2006 Phantom Entertainment removed all references to the Phantom Game Receiver from its website, claiming that the content-delivery system targeted for the Phantom would be available for PCs running the Microsoft Windows XP Media Center edition;[47] it later indicated this service would be available in March 2007, after the November 2006 release of the Lapboard.[48]