FORTUNE -- It was 5:45 a.m. on a Tuesday last June, and a bleary-eyed Julie Uhrman kept ogling her computer screen, "scared shitless," as she puts it.
The 38-year-old ex-investment banker and gaming industry vet sought to raise $950,000 from crowdfunding site Kickstarter to develop an unorthodox idea: a cheap home videogame console called Ouya with off-the-shelf parts using Google's (GOOG) wildly popular Android operating system. (The idea being that nearly anyone could develop for the system.) She looked to Kickstarter, not only for funding, but for validation of the idea itself. "There was no turning back," she recalls, fearful that no one would be interested in chipping in.
U.S. videogame hardware, software and accessories sales are down 10% year-over-year to $993 million according to NPD, partially due to the ubiquity of smartphones and tablets, not to mention the rise of mobile hits like Angry Birds. A Los Angeles native, Uhrman had pored countless hours as kid into console games like Galaga and Super Mario Brothers. More recently, Uhrman witnessed something she didn't like: Mobile devices may be fine for quick play sessions, but she says they lack in deep immersive experiences. That -- and the fact that traditional game development carries huge costs -- meant there was an opportunity, she says.
The money flowed in from Kickstarter. Eight hours after the project went online, Ouya passed the $1 million mark; to date, it has raised just shy of $8.6 million, one of the crowdfunding site's most successful projects ever. And this week, it closed an additional $15 million round of funding from backers like Kleiner Perkins and Nvidia (NVDA), which makes the graphics chips that power Ouya. Ex-Electronic Arts (EA) exec and Kleiner Perkins partner Bing Gordon will also join the board run by Roy Bahat, former president of the game site publisher IGN Entertainment, a division of Fox (NWS).
Ouya also packs some star power in Yves Behar, the Swiss industrial designer whose long resume includes Herman Miller, PUMA, and Jawbone's Jambox speaker. Behar had little experience creating a game machine, but he wanted to push the boundaries of console design. Cheap it may be, but Ouya should not feel cheap. (Which is why, when the final console and controller start shipping next month, they will sport premium touches like aluminum.) Arriving at the final design was easy: Uhrman liked the first rendering Behar showed, a Rubik's-sized cube. "Julie makes fast decisions that are quite thoughtful at the same time," says Behar, who labels his collaborator as a swift, dynamic problem solver." "This is something that is quite helpful in a design partner: someone who just intuitively knows what will work."
It's simple in theory. When a game is ready, it undergoes a two- or three-day approval process to ensure it meets some basic requirements. Approved titles end up first in an onscreen menu area called the "Sandbox." Popular games get elevated into different curated gaming categories like "short on time" or "fight." The only real catch? All titles must be free-to-play up front. How developers choose to monetize their games -- virtual goods, a monthly subscription -- is up to them.
Still, when early units began shipping to some Kickstarter backers this past March -- just nine months after raising money on the site -- several tech blogs got their hands on them and took the company to task over reportedly rough software and sub-par hardware construction. "Even if the concept is right, the Ouya misses the mark," wrote The Verge. "The controller needs work, the interface is a mess, and have I mentioned there's really nothing to do with the thing?"
Uhrman was well aware there was more work to be done. "There wasn't a single piece of feedback from those reviews that we didn't already have on our to-do list," she says. The early prototypes were meant for backers to test, not for review. "There are going to be hiccups in our life story as we show things before they're 100% ready, and we did this in order to get feedback." The L.A.-based startup with 25 employees is rolling out software updates every two weeks now, she says. And in direct response, Ouya has improved hardware features like the controller's trigger buttons.
In the long run, early criticism may do little to dampen enthusiasm around the tiny console. Over 12,000 game developers, including heavyweights like Square Enix, have already pledged support, with 100-plus games scheduled for launch. And Uhrman is already thinking about the future. Expect new Ouya hardware to follow the smartphone upgrade cycle of once a year. Next year's edition -- an "Ouya 2," let's say, that would still play older games -- will house a faster processor and possibly more RAM.
A mobile Ouya device isn't out of the question. Between the upcoming hardware release and raising two young kids with her partner, Uhrman's schedule is packed, but she doesn't discount the long-term possibility. Even if version one was meant as a living room device, she'd like to see her brainchild everywhere. If Ouya gets that far, it may be traditional console makers like Sony (SNE) and Nintendo (NTDOY), who end up "scared shitless."
Is this the future of interactive advertising? Hopefully not.
FORTUNE -- Maybe patent illustrations shouldn't be fair game. After all they are intentionally crude, existing to be simultaneously vague and specific, laying claim to an innovation or idea without giving too much away. And yet, Sony (SNE) patent 8246454 B2 is irresistible. Filed in 2009 and published last summer, the patent describes "methods, systems, and computer programs for converting television commercials MOREMatt Vella, senior editor - Apr 30, 2013 1:32 PM ET
Chipmaker AMD hasn't had it easy. Now three of tech's most powerful companies have embraced it for the long-term.
FORTUNE -- With its processors in 83% of PCs, Intel (INTC) overwhelmingly dominates traditional personal computing. But there's one area where the chip giant won't be winning any time soon: game consoles. If reports prove correct, Advanced Micro Devices (AMD) could manage what its competitor hasn't: getting its chips into all three of MOREJP Mangalindan, Writer - Apr 11, 2013 7:14 AM ET
Sony's new PlayStation 4 game console is a Hail Mary. To win, it must lure game creators.
FORTUNE -- With gaming on smartphones and tablets growing rapidly, it's not enough for traditional hardware companies like Sony (SNE) to trot out new consoles with better technical capabilities. They have to innovate. Judging from Wednesday night's spectacle of an unveiling, the Japanese electronics company did its best, playing up new social networking features that MOREJP Mangalindan, Writer - Feb 21, 2013 12:52 PM ET
Sony's high-octane presentation of its next-generation PlayStation 4 gaming system mostly impressed observers.
FORTUNE -- On Wednesday night, Sony launched the latest version of the Playstation to thumping music, lasers, and a giant screen that wrapped around the audience. The company hopes the super-charged PS4 will help it retake the top spot among console makers and prove its relevance in the changing games market. The games maker touted slick graphics and MOREFeb 21, 2013 10:51 AM ET
Sony's vastly improved PlayStation 4 game system is set to launch later this year. The company hopes it can help it regain lost momentum.
By Matt Vella, deputy technology editor
FORTUNE -- Sony Corp. unveiled its PlayStation 4 video game console Wednesday, introducing a machine with dramatically improved technical abilities, crisp graphics, and a slew of social networking features. The new console is a major bid by the company to regain momentum MOREFeb 20, 2013 9:35 PM ET
Chillingo, the publisher behind mega-hits like Angry Birds and Cut the Rope, has a knack for finding mobile gaming cash cows.
By Kurt Wagner, reporter
FORTUNE -- Mobile game publisher Chillingo knows how to pick a winner. Founders Chris Byatte and Joe Wee were the first publishers to stumble on Angry Birds, created by Espoo, Finland-based Rovio, back in 2009. With Chillingo's help, the game grew into a $1 billion MOREFeb 14, 2013 7:08 AM ET
The videogame maker missed the mobile revolution. Now EA is trying to turn itself around by embracing social games. Can it play on Zynga's field?
By Alex Konrad, reporter
FORTUNE -- Is John Madden going social in a big way? Not the football commentator. ("He's not really the tweeting type," an associate says.) No, we're talking about the Electronics Arts videogame Madden NFL, named after the famous coach.
Fresh off its recent success MOREDec 1, 2011 5:00 AM ET
Barnes & Noble decided it had to be first to market with a color e-reader, even if that meant not putting out a perfectly polished device. But in an iPad world, the dedicated e-reader race might not even matter.
When news leaked of the Nook Color, the new e-reader with a color screen from Barnes & Noble (BKS), the hype machine went into overdrive. Pundits frothed at that idea that this could MOREJP Mangalindan, Writer - Oct 29, 2010 12:43 PM ET
A round-up of the companies, deals, and trends that made headlines.
Every day, the Fortune staff spends hours poring over tech stories, posts, and reviews from all over the Web to keep tabs on the companies that matter. We've assembled the day's most newsworthy bits below.Redbox is rolling out video game rentals to "thousands" of its 24,000 kiosks around the U.S. (MCV) Intel posted a quarterly net profit of nearly $3 billion and MORE JP Mangalindan, Writer - Oct 13, 2010 6:30 AM ET
|4 federal agencies to shut Friday|
|Wall Street tries to buck global sell-off|
|Tesla repays federal loan nearly 10 years early|
|Japan plunge spooks global markets|
|Shazam overhauls iPad app as music market heats up|