CME Press Junket
Cheyenne Mountain Entertainment
February 15, 2006

Operator: Good morning ladies and gentlemen and welcome to the CME Press Junket Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Tim Jenson. Mr. Jenson, you may begin.

Tim Jenson: Thank you operator. Good morning ladies and gentlemen. We are glad you could join us today for this conference call. As the operator mentioned my name is Tim Jenson. I am the President and Chief Executive Officer of Cheyenne Mountain Entertainment. Today on the call joining me are Joe Ybarra, the Vice President of Product Development; Dave Adams, the Vice President of Strategic Partnerships; and Sara Baker, the Director of Marketing.

For the next 15 to 20 minutes we will try to tell you a little bit about our company and about our first game, which is Stargate Worlds, and then we will open it up to you for some questions.

CME Press Junket
Cheyenne Mountain Entertainment
February 15, 2006

Operator: Good morning ladies and gentlemen and welcome to the CME Press Junket Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Tim Jenson. Mr. Jenson, you may begin.

Tim Jenson: Thank you operator. Good morning ladies and gentlemen. We are glad you could join us today for this conference call. As the operator mentioned my name is Tim Jenson. I am the President and Chief Executive Officer of Cheyenne Mountain Entertainment. Today on the call joining me are Joe Ybarra, the Vice President of Product Development; Dave Adams, the Vice President of Strategic Partnerships; and Sara Baker, the Director of Marketing.

For the next 15 to 20 minutes we will try to tell you a little bit about our company and about our first game, which is Stargate Worlds, and then we will open it up to you for some questions.

Let me start off with maybe a little bit of history about our company. About four years ago some avid game enthusiasts and some excited fans of Stargate, namely Jim Brown, Todd Ellering and Daryl Wofford had an idea to create an MMORPG based upon the Stargate story line. Since MGM is the owner of the Stargate property the first critical task for them was to convince MGM of the potential value of that idea. The three of them created a preliminary design and a business plan and after some extensive series of meetings, interviews and presentations, they convinced MGM to consider moving forward with the licensing arrangement. The next step and a key requirement of MGM was finding the necessary capital to get the project off the drawing board and into production. This proved harder than expected. Finally in the summer of 2005 the project was jump-started by a Mesa, Arizona based entrepreneur and visionary business man by the name of Gary Whiting.

After his careful review of the initial proposal and business plan, Mr. Whiting formed and arranged for the funding of Cheyenne Mountain Entertainment. In July 2005 Cheyenne obtained from the initial three creators all the rights and intellectual property associated with Stargate Worlds and officially began to do business.

From the beginning the company's goal was to find the best and the brightest people in the game industry and to build a truly great game with exceptional graphics and superior gaming experience. The first key position sought by the company was an industry leader, an expert in game development and particularly someone with MMO expertise. The company's search successfully attracted a true industry legend, Joe Ybarra, who joined the Cheyenne team in July 2005. Joe quickly saw the possibilities for a Stargate MMO and realized the opportunity to build a truly world-class development studio. With Joe's game development experience on board the next key position to be filled was for a business leader who could organize the administrative functions of the company so that Joe could focus on building world-class entertainment products.

In August of 2005 the company asked that I join the Cheyenne team to give Joe the support he needed not only to make Stargate Worlds a great success but to position us to become a premier entertainment company.

Our first public announcement was on January 31, 2006, and was the culmination of the work that had been in (inaudible) creation for nearly four years. Now in full swing, Cheyenne has a growing staff of top industry veterans and is poised to deliver well beyond the dream begun by the three original creators. Cheyenne is now rapidly becoming the leading developer of interactive entertainer software products. The company is dedicated to creating cutting edge unique entertainment. The company expects to develop highly recognizable brands with high quality technology, distinctive artwork and rich game play. Cheyenne continues to recruit top industry talent to ensure its success as a game development company.

The company's overall strategy is to be a premier global entertainment company. Our focus is on the creation, development, publishing and distribution of quality interactive products. Our success will be measured by high levels of customer satisfaction and retention, broad-based appeal and shareholder returns. Our business strategy really has three distinct components. First, the design of the highest quality products. Second, generate global appeal and strong brands. Third, achieve high customer satisfaction and retention. Fourth, recruit and develop the industry's most capable entertainment professionals. Five, produce exceptional economic returns. Last but not least, to grow rapidly through continued strategy acquisitions and alliances.

While I could easily talk about our evolving strategy for hours, you can read much more about it by visiting our web site. For now I think your time will be best served by focusing our discussion on our Stargate Worlds' project. We have built a very strong relationship with MGM and will be coordinating our activities closely with them and their production team in Vancouver to make sure that SG1, Atlantis and Stargate Worlds are all closely tied together in storyline, themes and characters. To discuss our Stargate Worlds game in more detail I would like to turn some time over now to Joe Ybarra, our Vice President of Product Development.

Joe Ybarra: Thank you and good morning ladies and gentlemen. As Tim has just indicated I am responsible for the creation of Stargate Worlds along with the rest of our team. This morning I would like to share with you a few of the high level thoughts that we have about our product and perhaps a little bit of detail here in some of the areas that we are pioneering.

One of the things I will begin this conversation by saying is the fact that we are currently still in preproduction of our product. Part of our strategy as far as the preproduction cycle is concerned is to try to get some of our customers involved, which is the reason why we have launched our forum site already a couple of weeks ago. Very shortly we will be launching the community site for Stargate Worlds. We plan on continuously updating the community site and the forums with information about our product, as we evolve the details of the design, and as we are able to share more and more information about what our plans are.

So with that context and that caveat, I will describe a little bit about the Stargate Worlds' game. I think we will begin by talking about, what are the elements about Stargate that are particularly attractive from an MMO perspective? I think the most obvious one is the concept of the Stargate itself. The Stargate, as we know from the TV series, provides us with a vehicle that allows us to basically transport our players anywhere in the universe. By anywhere, we mean any obvious planet surface, in outer space, inside interiors of space craft or ancient ruins or various other locations. It is a perfect vehicle for us to be able to transport people and it gives them a sense of awe and exploration.

Another component that is very compelling about it is the fact that it is contemporary. The events that take place in this show could take place tomorrow. Because of that, we can identify with the characters and the people who are represented in the Stargate material itself. Players can identify with a Jack O'Neill or Samantha Carter or with any of the other characters that we see in the TV series. Of course we won't necessarily be using those particular people, but the fact is that people can identify with them and it makes it easy for us to work with the personas and player characters.

Another aspect of it, of course is like all good science fiction, we have plenty of great aliens, a rich back story of history given that we have over nine seasons of material to work with so there is plenty of good, historical information that gives depth to the races as well as give us an (inaudible) to the races so we have plenty of opportunities for creating conflict and interesting interactions between the different species that are in the game.

Then I think one of the big things that we really want to focus on is how lighthearted the actual tone of the storytelling is. The fact is that the show doesn't take itself that seriously and we think that is a really compelling aspect of why the Stargate has been so popular for so long. It is very easy to identify with the characters when they are joking about their circumstances. We want to make sure we retain that type of atmosphere in our game as well.

So with that in mind, given that we had such a great bulk of material to work with, there are three major areas that I will speak about in this conversation. They are more about the environment. I want to talk about the combat system to a certain degree and then I want to talk about guilds and organizations that the players will be creating as they play our product.

Starting off with the game environment, as I mentioned earlier because we have the opportunity to transport people anywhere in the universe, we plan on taking great advantage of that. This implies of course that there will be a fair degree of use of instances in our game. By the same token, there will also be very large scale wide open play environments that people will be able to play in.

We need a lot of real estate to make this game come to life, as far as play surface area. One of the components that we are really focusing in on heavily in this game is to find areas of play for the users that are not directly combat related. So because we will need a lot of playfield area in which to enact that, this is an area that we are focusing a lot of attention on. At the same time we also really want to capture the feel of science fiction, so we do plan on having quite a bit of content that is related to alien civilization both extinct as well as current. We also are excited about the idea of having entire playfields take place inside a spacecraft. For those of you that have been following the show, you are aware of the fact that there are various races including the humans that have large-scale…big spaceships, and they are perfect opportunities for us to create large environments for users to travel in, much like Dungeons in a fantasy role-playing type product.

We also want to put you in various interesting other places. For example we are very keen on trying to put people on the surface of the moon or some other vacuum oriented airless environment. The implication of that of course is that you would need survival equipment and various other things in order to survive in those environments.

Of course the fact that we already discussed here that we have spacecraft, implies that there will be space travel in this game. We do plan on supporting the idea of the users having spacecraft at some level and we want to be able to capture that. One of my philosophies is that you cannot have a science fiction game without whooshing spaceships so ….we will have whooshing spaceships.

Some other really crazy ideas that we talked about, if we actually enact, is actually having scenarios that take place on the surface of a star or we put people inside or near a black hole or various other things. But again, what we are trying to capture here is the atmosphere and the feel of grand science fiction and the ability to transport instantaneously anywhere in the universe.

To accomplish all this, like any good MMO, we need to have various different player character types and races. One of the things again that we fall back to from the Stargate material directly, is the fact that we have player archetypes that are very obvious and readily identifiable. So beginning with the fact that the FG1 team is an Air Force entity immediately can look at the (inaudible) design around the idea of squads and the military organization that the Air Force and other military branches represents. So we will be using that as sort of the contact for how players will group and how they will form alliances between each other. So kind of view it as this is sort of the Air Force is exploring the universe at the same time that we recognize that because there is conflict in this as in any product, that we will be building things around the squad base system, which I will get into more details in a moment.

So within that, of course, we have lots of alien races and different types of possibilities, for what players might be represented by. The most obvious of course is the Jaffa, (inaudible) as one of the game characters in SG1. It is not a human so we would expect that the players would be able to play Jaffa and various other non-human races. They are still investigating the possibility of which kinds of races we would like the users to be represented by. We have some pretty interesting ideas in that area, so stay tuned as we get more details out on that. Again, we will be concentrating on making sure we have lots of different races.

The player archetypes themselves though are so much different in Stargate Worlds. For instance, we have a scientist in the form of Samantha Carter, who is also an Air Force person. She can fly jet aircraft. She is an astrophysicist. So as a player archetype, we want to be able to demonstrate a couple of things. One is the scientist player, the engineering type player, as well as the alien technology reverse engineer type player, and various other different things that are somewhat unique and different from what you would typically see in an MMO. So this is sort of the class and skill access of our player reorientation.

Within that context, this is a good moment for me to describe one of our other philosophies about the design of Stargate Worlds, which is non-combat game playing. We feel that in order to appeal to the widest audience possible, that in addition to having a very robust combat system, we want to have an environment in which the users can do things that are not combat and have a very rich and compelling game experience. So to that extent we are designing a very elaborate construction system for allowing players to construct different housing, different activities on planet side.

For instance one of the things that we have discussed is the idea of constructing an (inaudible) mine so that you have a mining facility and refinery that allows the users to process the raw ore and turn it into something that is usable as a commodity. That is just one example of constructions.

We also would like to have pillboxes, fortifications and various other things as well as things like planetary shields, the ability to defend yourself against orbital bombardments and various other things. Again, all of this material coming directly from the TV series is just construction.

We also have the opportunity to have an elaborate tech tree. And the tech tree gets into the idea that we have several advanced alien races such as the Asgard. They have a very rich and detailed technology base that we can allow users to explore and, if you will, level up in their skills and the knowledge base about that type of technology. Besides the Asgard there are several others as well, so we have a rich opportunity here from a player growth standpoint to pursue technology.

Crafting of course is in any of these games. It is the biggest component of it. Again, we can rely on the alien technologies as well as just the basic raw materials on the planets in order to have a very rich and robust crafting system.

Lastly, trading. We think it is really important that we support the free economy, if you will, and allow players to trade freely between each other between planets as well as smuggle when we try to move contraband from say the Goa'uld technology base into the Asgard's technology base. We have a lot of different play activities that are not combat related.

Having said that, I will speak about combat now because combat is going to be the biggest percentage of play activity, as is in any MMO. But within this context our plans are to do squad-based combat as I mentioned earlier. The typical TV show has four people stepping through the Stargate and engaging in some type of activity on planet side, some of which is directly combat related. In our game design we will be supporting four player squads. For solo players, if it turns out that you cannot find or you don't wish to fight with a whole bunch of other people then we will provide you with AI-driven mots that will support you in various different missions and activities.

Combat in our game is going to be very modern, as it is in the TV series, so the users will be equipped with P90 machine guns as well as shot guns, as well as other types of modern equipment including explosives like hand grenades and C4 explosives and what-not.

So the obvious implication of this, is that combat is quite brutal in this game. One of our philosophies is that unlike some of the other products it is not possible for you to stand up and tank next to a person with a 50 caliber machine gun. To that extent we want to take advantage of our play fields and our environments and encourage the players to use commanding control to basically scout ahead and advise the other teammates about what to do. We also are putting a high premium on stealth, using the terrain and other things for cover so that users are not going to be exposed to machine gun fire or other things. So you want to be smart if you traverse the playfield where you are in a combat-intensive environment.

We also will have various different electronic counter measures and ways of looking at the playfield. That is a specialty perhaps that the scientist or the engineer type…where they actually have the ability to spot enemies and be able to target them and perhaps call in indirect fire through mortars or artillery barrages. So the idea is again to reinforce the idea we have squad-based combat, we have modern infantry combat tactics that we are modeling in this game. We are taking advantage of the playfield with respect to cover and stealth and we will have lots of different other types of player environments that support the combat (inaudible)…combat.

So we think that this is going to be pretty exciting, and there will be lots of opportunities here for us to do some pioneering work in the whole genre of MMO, as we try to really enact this modern combat system.

The last thing I would like to talk about is, about our structures for social aspects of the game. MMOs are really about communities of people and because they are about communities of people we feel that one of the areas that we could do some innovative work is to really try to make the guild systems and the squad systems and all of the hierarchies in-between a very compelling play experience for the user. So to that extent our plans are to try to work with guild leaders and other people who do these things on an ongoing basis to find out what kind of tools they need to help organize their guilds.

We also plan on having play activities that are related specifically to guilds. One of the big (inaudible) concepts that we have been discussing has been a guild leveling system. The guild itself actually generates through the course of its members various points or the equivalent of experience points so the guild itself is progressing. As a result of the guild progressing, it will unlock construction capabilities, expansion capabilities, technological abilities as well as the obvious economic benefits.

The other thing that the guild will be able to do is bestow rank upon the player. So as the player joins the guild and begins as a private he can progress through the guild hierarchy and become a general. Within the context of that, we will have various play mechanics that will support that activity. The fact that you are a general will give you more capabilities with respect to commanding, control and accessing guild resources than if you were say a private.

So all of this is try to encourage what we think is an important thing, which is server competition. As all MMOs, we don't expect the entire population of our game will be on one server, so we will have (inaudible) to our environment or individual server environment.

One other play in the activities that we would like to work with is to have server competitions where technological levels are achieved on an individual server. They can be compared against other servers. There are various other things. I am just focusing on technology as an example but there are many other criteria that we can use to expand and encourage competition at that level of play.

So there are a lot of interesting things that we want to do with respect to the community stuff. Once again as we evolve the details from all of this material we will make this available on the community site and to various members of the press and other people attending this call on an individual basis as well.

So with that I guess I will open it for questions. I am all done.

Tim Jenson: Operator, if you could open it up for questions?