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Beamz Combines Guitar Hero And Wii To Create A Unique Experience

|Includes:ATVI, Beamz Interactive Inc (BZIC), NTDOY

Beamz Interactive Inc. (OTCQB: BZIC) has made a lot of headlines so far this year, particularly after its endorsement deal with rap legend Flo Rida. By simply moving through a series of laser beams with the wave of a hand, Beamz enables anyone to manipulate existing tracks like a DJ or create original musical compositions using a wide array of instruments. And, the unique technology has a play in numerous end-markets ranging from education to professional DJs.

But of course, mass-market consumers represent the largest potential end-market, where the technology can be used for home entertainment. The precedent for consumer adoption can be clearly seen in existing hit products, like Activision Blizzard Inc.'s (NASDAQ: ATVI) multi-billion dollar Guitar Hero franchise and Nintendo Ltd.'s (OTC Markets: NTDOY) breakthrough Wii gaming console, which both shares common characteristics with Beamz's technology.

Activision Blizzard: Love of Music

RedOctane developed Guitar Hero on a budget of about $1 million in 2005. After two years of success, Activision Blizzard acquired the game developer and sold 25 million units worldwide for some $2 billion in retail sales volume. The game franchise became the third largest in history, behind Mario and Madden NFL, with its third release of Guitar Hero III: Legends of Rock being the first single video game title to exceed $1 billion in sales.

The success of this franchise clearly illustrates consumer interest in technologies that manipulate popular songs in an entertaining way. After signing a deal with Stingray Music and their catalogue of 16,700 re-recorded hits earlier this year, Beamz provides users with access to a significant library of songs that can be manipulated using its innovative technology. And given the many different ways to play, users may find Beamz to be more entertaining than the eventually monotonous Guitar Hero.

Nintendo: More Interaction & Novelty

Nintendo released its Wii gaming console in November of 2006 to compete against Microsoft Corporation's (NASDAQ: MSFT) Xbox 360 and Sony Corp.'s (NYSE: SNE) PlayStation 3. In December of 2009, the console broke the sales record for a single month in the U.S. And by the beginning of 2012, the Wii led the generation in worldwide sales with a much broader demographic than the other two gaming consoles had ever achieved.

The reason for this penetration and success was largely due to the Wii's innovative controller that offered something simple and novel. Moreover, the market penetration occurred when the other two consoles had a significant lead for several years before. Beamz again plays on these trends by offering a unique and entertaining interactive laser technology that's not only completely novel, but incredibly easy to use for even children and elderly adults.

Putting Together the Puzzle

Beamz may not have the notoriety or reach of Activision Blizzard or Nintendo right now, but its unique product has merged the best attributes of these two companies' best franchises. In the mass consumer market, small names can quickly develop big products when they catch on, and investors may want to keep a close eye on this stock moving forward. Capturing just a fraction of these sales levels would have a big impact on the $5.2 million company.

In addition to these mass-market consumer end markets, the company is also focused on numerous other end markets including education, senior care and DJs. These markets have already produced a lot of traction for its products, while helping management refine the technology ahead of a larger mass-market push. With the signing of Flo Rida earlier this year, the mass-market push has clearly begun and investors should take note.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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