Speaking to MobileIndustry.biz, I-play CEO David Gosen has defended the company against claims of insolvency following heavy losses in 2005 - and reaffirmed the company's position as the second largest mobile games publisher in the US.
A report in The Herald newspaper claims that the company is technically insolvent, following substantial losses in 2005 that resulted in a balance sheet deficit of GBP 17.6 million at the end of the year. I-play maintains this is almost entirely attributable to changes in accounting regulations that have forced a reclassification of preference shares as debt.
I-play's CEO told Mobileindustry.biz: "I-play's position has never been stronger and our performance so far in 2006 is testament to the investment we've put into the business during the previous year."
Referring to the recent Telephia survey which investigated the mobile gaming market in the US and positioned I-play as the second biggest mobile games publisher behind EA Mobile, Gosen said it was clearly evident that the company has changed significantly over the past 12-18 months, growing from a European into a global mobile publisher with a dominant presence in the industry.
"That kind of growth takes investment, and we're starting to see the benefit of that investment coming out of 2005," Gosen stated.
"Not only have we seen our revenue grow year on year, but also coming into 2006 we've seen stronger revenue growth than Q4, we've got a leading position in the US and European markets and we have operational profitability."
Discussing the change to the accounting rules which has led to a reclassification of preference shares as debt, resulting in a noticeable change to the company's balance sheet, Gosen stated that this was not unique to I-play and that "there are other Venture Capital backed companies that will have to reclassify their preference shares as debt in the same way."
"The point here is that the company is incredibly strong today, as a result of its performance. The revenue growth is there for everybody to see, the costs are under control as demonstrated by our achievement of operational profitability and our investors are a hundred per cent behind the company, the management and the successful achievement of our goals as we move forwards."
I-play has achieved sound commercial success with its range of one-thumb gaming titles, picking up numerous accolades for Skipping Stone as just one example. The publisher is also set to launch the third title in its series of games based on The Fast and the Furious movies - a franchise which has achieved over 4 million downloads for the company to date.
"As I've stated before, this business is a marathon, not a sprint," Gosen said. "You need to build your business on solid foundations and you need to invest in that business to see it grow and develop, which is where we're at now with I-play."