The People’s Box: Ouya launches Kickstarter for sub-$100 console

UPDATE NO. 3: Ouya console designer Yves Béhar, the man behind the Jawbone wearable technology company and the chief designer of the “One Laptop Per Child,” is today’s keynote speaker at our MobileBeat conference.

UPDATE NO. 2: Backers have funded the Ouya console, pledging the $950,000 goal in about eight hours.

UPDATE: As of 11:07 a.m. Pacific time today, 4,058 backers have already pledged $508,424, which is more than half of Ouya’s goal of $950,000.

Ouya aims to create the game console that everybody wants but the Big 3 publishing vendors are afraid to make.

The San Francisco-based company launched a Kickstarter crowdfunding project today to raise money for its console, which will run free-to-play indie games and cost less than $100. It’s targeting a first-quarter 2013 launch.

“It’s a new kind of game console for the TV that embraces the openness of mobile and Internet platforms,” said Julie Uhrman, the founder and chief executive of the company. Her industry experience includes work at IGN, GameFly, and Vivendi Universal.

“Some portion of the game has to be free as a benefit for consumers,” said Uhrman (pictured right). “We believe this is the people’s console.”

The system will allow developers to make money from their games in any way they want; they’ll no longer be bound to the standard $60 price for a console game, and Ouya will offer free demos and business models such as free-to-play, subscription, virtual goods, or paid fees.

Famous industrial designer Yves Behar (who also did the Jambox speakers) created the look of the Android-powered Ouya box.

[Editor’s note: will be speaking at 9:20am Wednesday morning at our MobileBeat conference in San Francisco]

The box will include a quad-core ARM Cortex A9 processor, a Nvidia Tegra 3 graphics processing unit, 8GB of Flash memory, 1GB RAM, and Bluetooth connectivity. The controller takes a cue from the upcoming Nintendo Wii U console: It can play traditional games but also has a touchpad. This means that developers can create special experiences for the Ouya console, Uhrman said. The company is seeking content such as role-playing games, shooters, and casual games.

Ouya will have a custom Android interface and its own online store. It will be open to any developer who would like to make a game for it. The system will launch with TwitchTV integration, so users may view tournaments and live-streamed plays. The standard fee for games or items purchased on the network is 30 percent.

“It is a solid value proposition for developers and consumers,” Uhrman said. “It can do content that isn’t [on] any other platform.”

Ouya will also cater to developers. Uhrman said she watched developers leave the console studios in droves. “It is a shame the games are too expensive [and] complicated, and consoles are too expensive,” Uhrman said. “It’s a shame that developers are leaving triple-A shops and going to mobile. There is a brain drain in the console game business.”

“We want people to bring their creative ideas back to the TV, which is the no. 1 platform that people like to play games on,” Uhrman said. “The majority of dollars are spent there.”

It won’t be easy for a startup to compete against Sony, Microsoft, and Nintendo. Other rivals include Valve’s Steam, a digital distribution client for PCs, and cloud-gaming service OnLive. That’s why venture capitalists turned down Uhrman when she was trying to raise money. “No one wants to take the risk,” she said. But by raising money on Kickstarter, she’s going straight to potential fans, which will enable the team to finish building out its prototypes and tools. The company is seeking to raise $950,000.

Uhrman said she came up with the Ouya name at the beginning of last year while she was running digital distribution for IGN, a highly read games news site owned by News Corp.

It might seem like a crazy move to take on The Big 3 console manufacturers. But Ouya could be the right idea with the right timing, according to analyst Michael Pachter at Wedbush Securities.

“While it is certainly a bold move to take on the likes of Sony, Nintendo, and Microsoft, I think there might be room for another player, particularly at this price point,” Pachter said. “It’s been a long time since a new console was introduced, and it is likely that pricing for consoles will go up. By coming in at a lower price point and challenging the existing pricing model for TV-based games, Ouya could hit a sweet spot with gamers.”

The company isn’t announcing partners yet but is talking to potentials. Uhrman said that the system will embrace hobbyists and tinkerers — even hackers. The console can be opened with a standard screwdriver, and it will be fully documented. “Rooting” the device will not void the warranty, and every unit has a debugging function.

“The ‘O’ in ‘Ouya’ stands for open,” Uhrman said.

Advisors include Ed Fries, the former head of Microsoft Game Studios; Brian Fargo, the CEO of InXile and a longtime game developer; Markus “Notch” Persson, the creator of indie sensation Minecraft and head of Mojang; and Adam Saltsman of Canabalt. Investors include Jay Adelson, the former CEO of Digg; Joe Greenstein, the founder of Flixster; Hosain Rahman, the founder of Jawbone; and Eric Hautemont, the publisher of Ticket to Ride. Behar is the Ouya product designer.

“Indie developers need a way to bypass the existing console platform and publisher infrastructure,” Fries said. “Ouya could be a game changer.”

The company has expressions of support from Thatgamecompany founder Jenova Chen; Owlchemy Labs founder Alex Schwartz; Prince of Persia creator Jordan Mechner; Storm8 CEO Perry Tam; Spry Fox cofounder David Edery; Madfinger Games’ Marek Rabas; and Trendy Entertainment’s Philip Asher.

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