Takara, the Japanese headset maker which licenses Virtuality's technology in that market, is thought most likely to step into the breach, either injecting cash through a rights issue or making an offer for the whole company.
Yesterday's suspension at 68.5p followed three months after the company crashed pounds 3.8m into the red, warning that disappointing sales of its virtual reality games were putting a squeeze on the cash flow it needed to develop its headsets. The red ink was much worse than analysts had expected and Virtuality's shares plunged below the 170p at which they came to the market three years ago and well down from the 361p they reached at the beginning of 1994.
Virtuality's honeymoon was short-lived as early bid speculation was soon replaced by the harsh reality of profits warnings, slumping sales and rapidly reined-in brokers' forecasts. Losses widened as the company passed through a difficult transition, reducing its dependence on arcade entertainment equipment and moving into lower-ticket home entertainment virtual reality headsets.
The company found it hard to make the shift from being a manufacturer and designer of equipment to a licenser of intellectual property to companies such as Takara in Japan. Yesterday it appeared the money had simply run out.
Opinion is divided on whether virtual reality was just another technological flash in the pan akin to the Sinclair C5 or whether it remains the technology of the future whose day will come, if not quite yet.
Whichever is right, investors have paid the price, with shareholders stumping up for a placing at 280p at the height of the stock's popularity. They became victims of a company that even analysts close to the business failed properly to understand. After October's loss, a huge range of forecasts underscored the guesswork that lay behind most expectations.
Virtual reality began in the US Air Force as a way of training pilots without risking millions of dollars worth of aircraft. Once inside his headset, a trainee pilot believes he is in the cockpit of a plane. If he turns his head to look at wingtips, he sees wingtips.
Other applications include architects taking clients on a virtual walking tour of a proposed building, and there are important uses in medicine and aeronautics. Virtuality had some success with a motorcycle simulator that was used in Japanese driving schools to train bikers.
If Takara does not take advantage of Virtuality's woes, the company boasts a roll-call of the world's electronics giants on its share register - including Philips, IBM and Motorola - which might welcome the opportunity to combine the company's technological know-how with their financial clout.Reuse content