Teen handheld maker wants to play

Cybiko, the AOL Time Warner-backed maker of handhelds for teens, is trying to reinvent itself as a maker of games for cell phones.

The company, which still sells the $99 Cybiko Extreme, is evaluating whether it will continue in the hardware business at all. The company has come up with designs for a next-generation Cybiko device but has not decided whether it will go ahead with it.

"It gets more and more risky to be in the hardware business," said Don Wisniewski, president of Cybiko's wireless game unit.

Gaming has taken on an increasingly important role for Cybiko. The company already makes games for Motorola phones and said it is one of a handful of developers that is working with Sprint to develop games for its next-generation network.

Cybiko introduced its last new device, the Cybiko Extreme, last fall. The company said it sold 500,000 of the original Cybiko devices.

Over the past 12 months, Cybiko has seen its ranks cut by 30 percent and the company split into three units: the hardware group, the wireless game group and an advanced technology group.

A number of companies have placed bets on the emergence of a big market for cell phone games.

Researcher Datamonitor predicted last year that 21.6 million people--or one in six cell phone users--would try a wireless game. The firm estimated that 93 million people will be playing wireless games by 2006.

Although Cybiko has its sales and marketing operations in Illinois, many of its employees--including its engineers and technicians--are based in Moscow. America Online invested in the company in September 2000.