John Zarlino SYNC PHEI Project

The Phantom Game System™ began In development in 2002. It was created to be the ultimate gaming experience offering the first end-to-end, on-demand game distribution service and coined the phrase “Any Game, Any Time™ ” From 2002 to 2005, Phantom was hailed by video game magazines and websites as the most anticipated hardware for PC gamers and most significant innovation in years. Phantom Game System™

Phantom Gaming Service™ was originally developed exclusively for use with the Phantom Game System™. It was created to be the first end-to-end, on-demand gaming service with hundreds of games to choose from and the ability to try any game before you buy. Phantom Gaming Service™ had the ability to quick play streaming games which allowed you to play in less time than it takes to install from CDs or download from a website.

The Phantom Game System™ was led by an exceptional group of executives from companies such as Microsoft, Yahoo! And NBC. • Tim Roberts: Co-Founder of Savvis Communications (NASD: SVVS) and Intira Corporation • Kevin Bachus: Creator of Microsoft Xbox Bret Brase: Broadcast.com and Yahoo! • Ty Graham: Microsoft and WildSeed • Andrew Schneider: NBC and Sony Pictures • Kathy Schoback: Eidos and Sega, IGDA Chairperson • Rich Skoba: Hewlett Packard Services • Out of 42 employees, 50% were in engineering and product development.

Phantom Gaming Service™ had an extensive library of over 500 games with 22 content providers representing over 30% of the PC games market including 4 of the top 10 PC publishers. A few of the games included: Baldur’s Gate 2 Centipede Barbie Civilization 3 Bloodrayne Deer Hunter Dark Age of Camelot Monopoly Empire Earth Neverwinter Nights Icewind Dale Scrabble Lord of the Rings Total Annihilation Silent Hill 3 Trivial Pursuit The Hulk

Phantom Gaming Service™ contracted / invested over $1,000,000 in advance royalty credits that were unused and are still available for use.

The Phantom Game System™ had everyone talking. 140 Million Unique Visitors to Phantom.net Key Video Interviews @ E3 2004 NBC, CBS, Fox News/LA, UPN Channel 13/LA, CNN affiliates in 10 markets, WB Houston Affiliate, Multiple European and Asian shows, G4/TechTV, Gamer TV (London) Key Radio Interviews @ E3 2004 NPR quot;Into Tomorrowquot; syndicated tech show: more than 100 radio stations across the country, FINALIST including Sirius and XM Radio

The Phantom Game System™ had a huge presence in 2004 at the largest video game trade show in the world, E3. Overview Total traffic through Infinium Labs booth 43,000 T-shirts given away after scanning card 12,000 Private Meetings 350 Press Meetings 500+ Video Interviews 25 Public Demonstrations 4,800+ Press Kits 700 kits handed out FINALIST

FINALIST

The Public Loved It

Game Execs Loved It • Mark Rein from Epic Games – Creator of UNREAL said, after playing our system, “This is the coolest system I have ever seen. Put us in front of the press. We want to endorse this service!”

Critics Loved It A former critic from an online game news site said, “Wow. I really wish this wasn’t so awesome. I’m going to have a lot of explaining to do…”

And then we had some challenges… Phantom was pigeon holed by the Seattle based engineering team. They were contract based and knew that when the product shipped they would no longer be needed. This created a strong conflict of interest that resulted in the Phantom Entertainment engineering team strong arming Phantom by closes Seattle engineering causing significant delays. office, secures and moves all assets to Florida Phantom had a challenge trying to figure out how to secure the company’s Intellectual Property which resulted in a huge drain on cash reserves.

Despite the praise by the media and gaming community, The Phantom Game System™ launch was canceled due to the company hitting a brick wall as a result of previous funding rounds. The previous rounds diluted the company’s public valuation to a level where it was impossible to raise the little remaining cash needed to complete the Game Service.

What Phantom Entertainment is Doing Now. Phantom Entertainment Inc. (OTCBB:PHEI) is focused solely on the distribution and sale of the Phantom® Lapboard. The Phantom® Lapboard has 3k orders logged and waiting and is planning on shipping 500 units a month and ramping up starting in Phantom® Lapboard October/November of this year. Phantom Entertainment will help promote Phantom Game Service by having a link to our website and by embedding our software on a chip inside the Phantom ® Lapboard.

PRNEWSWIRE – August 18th 2008 “Phantom ® Game Service, Inc. Signs Asset Purchase Agreement with Phantom Entertainment, Inc.” Deal Terms Phantom Game Service, Inc. shall pay a total of $165,000 to Phantom Entertainment, Inc. and 49% stock in Phantom Spent over Phantom Game Service, Inc. Along 70mm dollars on the with 7% of gross annual revenues. development of these assets and traded over 200mm in stock. $65,000 is to be paid within 4 months. $100,000 is to be paid in 3 years.

Phantom Game Service, Inc. acquires all assets associated with Phantom Gaming Service™. Summary of Assets ØSoftware (encoding engine, client, streaming server, billing systems, user interfaces, web pages, videos, SQL databases, Oracle accounting system, designs, architectures and topologies, and more) ØPhantom Game Service™ Trademark Ø“Any Game, Any Time” Trademark ØPhantom Game Service Patents ØPublisher Agreements ØMarketing, Collateral & Legal Contracts ØOperating Plans ØMarket Research – Gartner, Yankee Group, Penn Sholeon and Berland, DTI for Pricing, Elasticity, Branding and Marketing studies ØPhantom Game Receiver with associated patents, engineering documents and diagrams. ØDomains: phantomgameservice.com, phantom-gs.com, phantom-gs.net , phantomgamingservice.net, phantomgs.com and phantomgs.net.

Same technology, New methodology • Phantom Game Service changes business model entirely by taking advantage of streaming technology already developed and becoming a video game digital distribution service provider. • Eliminating the Phantom Game Receiver allows the company to significantly reduce costs and focus on content instead of manufacturing hardware.

Mission Statement Phantom Game Service is a business to business (B2B) provider creating revenue sharing opportunities for cable companies, ISPs, retailers, e-tailers, traffic intensive websites and social networks. We enable our partners all over the world to stream games online without worrying about the how with the broadest and best catalog of games and grab a piece of the revenues. We are the how.

Phantom Game Service™ assembles new executive and engineering team in Tampa. Tim Roberts - CEO & President Rich Krueger – SVP of Content Acquisition Nathan Lands – SVP of Marketing George Vanous – VP of Front-End Design Yingwu Zhong– VP of Back-End Programming Tony Lee – Lead Test Engineer Maryann Ohki(contractor) – Graphic Designer

Executive Bios Tim Roberts Founder of Phantom Entertainment (OTCBB: PHEI) Co-Founder of Savvis Communications (NASD: SVVS) and Intira Corporation (now Data Return). Tim has over two decades in technology, business and finance with startups. Rich Krueger Richard Krueger has two decades of experience in marketing and business development on behalf of leading interactive entertainment companies. He presently serves as CEO of AboutFaceDigital, a Facebook application development and social media marketing agency, based in Manhattan. Nathan Lands Created first video game e-commerce business at the age of 15. Started several start-up ventures in technology & advertising . Lived in Taiwan for 2 years and learned to speak Mandarin Chinese and acted in several TV commercials while traveling through Hong Kong, China, Japan and Thailand.

SOFTWARE Code was written by original developers of Real Networks, Wild Tangent, Microsoft, Yahoo and Sony Online. Our engineering team reviewed the code and graded it as A++, very well written and documented and the streaming encoder and streaming server are finished. Timeline for launch of Beta 1 live to public:120 days from funding.

Content Delivery Network Phantom Game Service’s content will be delivered with the help of SAVVIS, Inc. (NASD: SVVS) and their CDN(Content Delivery Network). SAVVIS is the ideal CDN partner for the Phantom Game Service. Using the slogan “The Network that Powers Wall Street” SAVVIS now serves more than 4,700 financial institutions, including 75 of the top 100 banks and 45 of the top 50 brokerage firms worldwide. Still, 70 percent of SAVVIS's customer base is comprised of non-financial enterprises. SAVVIS currently serves more than 400 customers in the retail industry worldwide. Many of SAVVIS’s clients are potential partners for Phantom Game Service and could benefit from new sources of revenue.

SAVVIS’s Clients (short list… ) Media & U.S. Federal Financial Retail Healthcare Entertainment Government London Metal Exchange

Market Landscape Main Competition Exent Both companies are only involved in 2nd Digital distribution solutions provider for release window games which they get after companies such as Verizon FIOS and the games are no Gametap. Streaming & Download. longer available at retail. Trymedia Digital distribution solutions provider and the world’s largest B2C marketplace for downloadable games. Download ONLY.

Market Shifting to Streaming A recent report by Ars Technica stated that: “with the rise of Hulu, YouTube, Veoh and many more, it's streaming traffic that now generates concern for ISPs, even as P2P drops off in some cases. The shift, should it become a permanent trend, is good for everyone. ” Ars Technica reports that with the availability of streaming technologies being made more accessible and user friendly the public is beginning to lower their usage of P2P and illegal file sharing in favor of using easy to use legal alternatives such as streaming video, music and games. The market is shifting to streaming at a rapid pace as broadband internet becomes widely available and offered at higher speeds and users become accustomed to using services such as YouTube where they can watch what they want On-Demand without having to take up space on their PC.

Game Developer Speaks (Sept. 10th 2008 Article) As a response to the CEO of GameStop’s remarks against digital distribution, the CCO of Acclaim Entertainment had this to say: “He says we are 12-17 years away from downloading games digitally? I know he's got to pretend that digital distribution isn't relevant (or any kind of threat) to protect his stock price, but I guess Steve Jobs is miles off course then (100,000,000 digital downloads in the first 60 days of opening Apple's 'Digitally Distributed' App Store.) Or that iTunes is now the biggest music retailer in the world.” “What is the Amazon strategy? What is the Netflix strategy? To distribute entertainment digitally.”

Game Developer Speaks (Sept. 10th 2008 Article) Continued “Finally, he made some crazy reference that quot;Publishers are afraid to death of piracy.quot; Yet, as we know, piracy can be tamed by server authentication. China is the living proof of this, where they have a non-existent console media business, and a thriving digitally downloaded industry. A digital distribution industry which grew 69.5% last year.” “I personally feel GameStop is just blindly putting their foot on the gas pedal to speed up digital distribution (thanks to their policies); if they are smart they will be investing very, very heavily in digital distribution if they want their company to still exist in 12-17 years.”

Competitive Advantages UNIQUE APPROACH The current “competition” is focused entirely on 2nd window release content which they only get AFTER the games are no longer sold in retail. Also, they have a gigantic library of lackluster titles that don’t sell and cause harm to the overall user experience. CONTENT, CONTENT, CONTENT Phantom Game Service will have the best catalog of games by solving the problem of securing NEW RELEASE 1st window. We will focus on quality of content over quantity, unlike our competition, and aim to have only the top selling casual and hardcore games to maximize our return on investment and to provide less clutter and better experience for our users.

Competitive Advantages(continued) NETWORK PERFORMANCE: We have aligned with the FASTEST network in the world carrying 30% of the internet’s traffic and are utilizing their performance based edge hosting. SOFTWARE: Our software was built by some of the greatest minds in the streaming world and is an intelligent technology that is a BRAIN and continuously adapts and learns how to increase game performance every time a game is played.

Strategic Partners Phantom Game Service will form strategic partnerships in several vertical markets including the following industries: Cable Companies, Phone Companies, Movie Rentals, Hotels, Retailers and Social Networking Sites. Short list of companies we are pursuing: Savvis, Best Buy, Circuit City, Radio Shack, Facebook, MySpace, AOL, Google and Blockbuster. We have worked for over 6 years on indentifying the issues between retailers and publishers to acquire AAA new release content to be delivered over the internet through the PGS streaming platform and have solved the problem.

Benefit to Partners Phantom Game Service Partners: Cable Companies, ISPs, Last Mile Providers, E-tailers, Retailers, Publishers whom WHITE LABEL the Phantom Game Service portal will receive the following: 10% of NET SALES from: ALL GAME SALES ALL SUBSCRIPTION REVENUES ALL ADVERTISING REVENUES AAA and New Release content will receive special incentives which are confidential. Phantom Game Service, Inc. has budgeted over 2mm dollars for royalty advances for 1st window content and also another 600k for exclusive casual titles to the PGS.

Content Acquisition Plan AAA Content Strategy • Share our revenues with Big Box Retailers in exchange for co-marketing support. This allows them a reoccurring revenue stream and doesn’t take any of their shelf-space. • Go after AAA games which have been blocked by Game Publishers due to the fear of losing their retail partners.

Low-Cost Marketing Strategy Phantom Gaming Service will initially take advantage of Phantom Gaming System’s brand awareness and comeback story to keep marketing costs low and easily get the media’s attention and have the whole internet talking. “Did you hear Phantom is back?!” We have developed an automated online co-op marketing portal which allows website owners to automatically receive commissions from sales revenue generated by the customers they send to us. We are positioning ourselves with FaceBook and other Social Media and Web 2.0 sites for co-op marketing opportunities.

Game Industry Report 08/19/08 Forecast Video game industry will grow by 10.2 percent per year, eventually generating $63.2 billion in revenue by 2013. Analysis Video game industry is “somewhat recession-proof” and is expected to grow 9.5 percent this year, bringing in $38.9 billion, despite flagging consumer sentiment.

PCGA Horizons Report 08/22/08 PC gaming was a $10.7 billion industry in 2007, with sales from digital distribution nearing $2 billion and advertising revenues from websites, portals, and in-game ads accounted for $800 million. Online PC gaming brought in $4.8 billion, almost double that of retail PC sales. “Our analysis clearly shows incredible growth in online PC gaming, proof that this industry is far stronger than anyone has reported. Today’s consumers shop where they live - online.”

PCGA Horizons Report 08/22/08 Broadband-connected PCs are the key driver of growth for PC gaming. By the end of 2007 less than one-third of households in the top 20 markets for games had a high-speed Internet connection. That clearly indicates that there is still plenty of growth to come.

What 1% of the Games-on-Demand market looks like today… PC Gaming Games-on-Demand 1% Market Share

What 5% of the market looks like in 2013…

The immensely popular PC Game World of Warcraft has over 10 Million Subscribers who pay $15 a month and paid on average $40 to originally purchase the game.

The game’s first expansion “The Burning Crusade” sold nearly 2.4 million copies in the first 24 hours of availability for $39.99 each, a total of $96 million in 24 hours.

1% of WoW sales would have made Phantom Game Service $5,000,000 in profit.

Big Fish Games – B2C Game Portal Game Download (no streaming) • B2C portal – No white label program • No AAA content – Casual games only • Annual Revenue Growth of 200% • Generated 24.1mm in sales in 2006 • Generated 50.6mm in sales in 2007 • 310 employees / 500 game developers • 1 MILLION GAMES TO CONSUMERS PER DAY •

Phantom Game Service is ready and the hard work is done! Phantom Game Service is a clean company with no debt or liabilities. It has many assets to work with and little cash needed to launch and be profitable. A sliver of the market share makes this an enormous company run with little overhead.

Phantom Gaming Service™ is positioned to seize a large share of the Games-on-Demand market and become one of the largest video game streaming service providers in the world.

is Back …

2009 Projections Overview Investment/Loan: 3mm • Total Games Sold: 270,000 titles • Total Revenue: $7.857mm • Total COG: $5.049mm • Gross Margin: $2.807mm • Gross Margin %: 35.7% • *Full Financials Total Operating Expense: $2.484mm • are Attached* Income/Loss before taxes: ($163.599) • Net Cash Provided: $264,751 • Cash at End of Period: $2.732 • Total Assets: $2.62mm • Total Liabilities: $3.010mm • Total Stockholders’ Equity: $2.62mm •

Delaware C Corporation 1000 Authorized Shares Outstanding: 510 Shares CEOSAVVY, LLC 490 Shares Phantom Entertainment, Inc. Board of Directors: Timothy Roberts CEO: Timothy Roberts Office: We are currently have retained CB Richard Ellis to find office space for the company. We have evaluated over 30 spaces between downtown – New Tampa and feel we will able to achieve very good terms on a already built out space. We are in negotiations with several building and will be securing space in the next 10 days.

Patents & Trademarks Phantom Game Service Trademark Certification of Registration No. 2,961,733, issued on June 14th, 2005. Any Game, Any Time Trademark Trademark Docket No. 556292401300 filed March 2004. Phantom Game Service Patents Streaming technology – Method for automatic We have a patent patching of a sparsely streamed application. attorney in New York USPA: 20060069796 who will be working on Kind Code: A1 / Date: March 2003, 2006 all patents that were Other Trademarks filed to ensure they are Black Knight – July 7th, 2003 maintained through BlackNight – August 13th, 2003 prosecution. Pay Per Play – August 13th, 2003 Virtual Private Game Network – August 13th, 2003 VPGN – August 13th, 2003 Built By Gamers, For Gamers – August 13th, 2003

SAFE HARBOR STATEMENT Certain statements included in this presentation may constitute forward-looking statements. Actual results could differ materially from such statements expressed or implied herein as a result of a variety of factors including, but not limited to: the development of Phantom Gaming Service technology, the successful marketing of Phantom-GS.com, acceptance by the market of Phantom Gaming Service, products and technology, competition and timing of projects and trends in the gaming industry, as well as other factors. The forward looking statements contained herein are made only as of the date of this presentation, and Phantom Gaming Service undertakes no obligation to publicly update such forward looking statements to reflect subsequent events or circumstances.

THANK YOU FOR YOUR INTEREST IN PGS! Executive Finance Contacts: Timothy M Roberts, CEO 314-825-4964 troberts@phantom-gs.com Lou Cariffe, CFO 636-399-5345 lcariffe@phantom-gs.com Terry Taylor, Controller 239-989-8046 ttaylor@phantom-gs.com

John Zarlino SYNC PHEI Project

by John Zarlino on Dec 16, 2008

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John Zarlino SYNC PHEI Project Presentation Transcript