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OTC Pick for the Day

by Rick

Gottaplay Interactive (GTAP), Inc. is rated one of the top ten video game rental services according to Top Ten Reviews. They are working hard to live up to their motto: “The Only Place to Play.” The Company features free home delivery and unlimited access to one of the largest gaming libraries available online. There are no due dates and no late fees. Members receive titles in 1-5 days and can play as long as they like. If they like a title, they can also purchase it if they so choose.

GTAP utilizes their own proprietary Game Distribution Software that contains an algorithm to accurately forecast levels of purchases and inventory. Distribution is achieved through a network of eight distribution centers linked to the GDS system. This enables the Company to optimize efficiencies in order fulfillment, inventory forecasting, procurement, inventory control, billing, and customer service. Customers even have the option of receiving text message confirmation that their order has been shipped.

GTAP uses their proprietary GDS system to create a custom interface for each subscriber to effectively merchandise their inventory and accurately predict subscriber preferences. Combined with a scalable, low-cost business model, this enables the Company to maximize revenue potential and minimize costs.

MARKET OPPORTUNITY

GTAP is already a leading online game rental subscription service providing a comprehensive library of about 3,500 titles to an existing base of subscribers at a cost of $20.95 per month. The Company has developed a strategy that is aimed at generating an explosive increase in subscriber growth over the next 12-24 months. The demand for video game rentals is as strong as it has ever been.

According to the NPD Group, while dollar sales were down slightly, total industry unit sales were up 4 percent over the same period the previous year. U.S. retail sales of video games (including portable and console hardware, software and accessories) reached more than $9.9 billion in 2004 - a decline of less than one percent when compared to $10 billion in the previous year.

Sales remained strong, thanks in large part to the console software, portable game software and portable game hardware categories, which saw dollar sales percentage increases of 7 percent, 11 percent and 10 percent, respectively. For the first time ever, sales of portable software titles broke the $1 billion mark. Total software sales also continued to set new records, with sales exceeding $6.2 billion, an increase of 8 percent in overall sales when compared to $5.8 billion in 2003.

Industry experts agree the video game industry has shown no signs of slowing down. No other entertainment industry has posted the sustained growth over the last decade as has been generated by the video game sector. Given the technological advances that are here now, all signs point to unprecedented growth and record sales over the next few years. GTAP has invested substantial resources to establish strong ties with various game developers and distribution providers to stay ahead of the curve.

As GTAP aggregates subscribers, their ability to pinpoint subscriber preferences should improve. This will enable greater operational efficiencies which in turn, should enable the company to lower costs. The OTC Digest believes GTAP has the potential to increase their profit margins as their subscriber base and other revenue streams accelerate. This creates a powerful opportunity to generate great profit growth and long-term success for the company and its shareholders. Management indicates holding approximately 21 Million Shares of the stock currently outstanding and appears very motivated to achieve positive results.

KEY MANAGEMENT

John P. Gorst - Chairman, CEO is a co-founder of GTAP and has directed all development and business efforts since November 2003. Mr. Gorst has over 17 years experience in founding entrepreneurial technology ventures, specifically in the development of software and business data services.

Prior to joining the Company, his experience included serving as CEO and Board Chairman of Insynq, Inc. a publicly traded application service provider. He was Vice President & General Manager for Interactive Information Systems Corp. and also operated a training/IS consulting business in conjunction with Nynex Business Centers of New York.

Mr. Gorst graduated at the top of his class as an Electronic Design Engineer from one of the top technology trade schools in Arizona. Mr. Gorst was also awarded a medal of honor for business leadership in 2001 and in 2006 from the National Republican Congress.

Asra Rasheed - President and COO has created several successful businesses in the multimedia marketplace. Ms. Rasheed was Director of Multimedia at Koyo Graphics where she managed large web development projects for clients such as Warner Brothers, Sanyo, and Sony. Ms. Rasheed also managed the development and growth of the online DVD rental and sales website for the largest distributor of Southeast Asian movies.

Prior to that, Ms. Rasheed founded NextRental.com, one of the first online video game rental companies and also served as Vice President of Business Development for Luminex Lighting.

Ms. Rasheed holds a BA in Finance from The School of Business & Economics at California State University, Fullerton, CA.

CONCLUSION

Gottaplay Interactive, Inc. GTAP has an excellent opportunity to achieve dynamic subscriber growth over the next several years. The Company has invested substantial resources to position itself among the nation’s top video game rental sites. It is a competitive business and senior management has spent a considerable amount of time “in the trenches” developing their proprietary software system, distribution channels and corporate partnerships.

As a result of their commitment to Customer Service, the company is building its reputation as one of the best sites for renting video games online. As the Company expands their services into the broadband and mobile phone arenas, additional revenue opportunities will present themselves. It appears GTAP is well-positioned to achieve significant revenue growth over the next 12-24 months.

Approximate Shares Outstanding: 30.7M
Insider Holdings: Approximately 70%
gtap_chart.png


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