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World Golf System tees off

World Golf Systems is an enterprise investment scheme investing in a company which develops golf games based on patented golf ball tracking technology.

The group was founded in 1997 and developed TopGolf, a game which is played on the golf course with normal golfing equipment. It will use the proceeds of this EIS to roll out two spin-off games, TopChip and TopPutt to the market.

TopGolf is played with 20 balls, each containing a small microchip. There are different targets with different scores. When a ball lands in a target, the patented technology identifies who the player is and automatically updates their score on a monitor.

The first TopGolf game centre was opened in Watford in 2000. In 2002 the the centre was sold to the Baydrive Group for 3.3m and as part of the deal, World GolF Systems granted Baydrive an exclusive licence to open other TopGolf centres within the UK and Republic of Ireland.

The Baydrive Group opened a second game centre in Essex in 2004. A third will be opened in August 2005 in Surrey, while there are two centres being built globally one in the US opening in July and one in Thailand opening in June.

World Golf Systems plans to licence TopGolf and its new games TopChip and TopPutt to operators with experienced managers and access to funding. Eight license agreements have been signed so far and between them the licensees are obliged to open at least 39 game centres by 2009.

Revenue will be derived from license fees, sales of the ball system and equipment to licensees for each centre, royalties from the operators, sales of the balls, membership cards and ongoing maintenance fees.
Golf is a game in which there is interest on a global scale, so there may be a market for the games developed by World Gaming Systems.

However, there is no guarantee the games will take off and there is no barrier to competitors developing similar or better technology. Another risk is that exchange rates can affect royalties from the overseas games centres, which would impact on profitability.


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