If Microsoft is shopping for software entertainment companies, SBYT is the obvious candidate.
SBYT has extremely strong brands and correspondingly high sales numbers for 1996, with 2-3 more "killer titles" due this year. The industry source PC Data confirms SBYT's record 1996 sales.
Microsoft would have no reason to buy out Broderbund. Broderbund's best asset is cash. Microsoft needs no more of this! What Microsoft is looking for is BRAND and hit potential...not tired product lines like Broderbund, Maxis and others carry. Besides, SBYT is distanced from the "EDU"tainment compaines like Edmark and Broderbound, whose educational products have been inherently and severely challenged by the Internet/Web paradigm.
SBYT is down and out, but growing stronger. The company is beefing up staff where needed, and letting go where no longer useful. In fact, last quarter SBYT beat estimates for the first time in many quarters (see Zacks/First Call). And, almost every division of SBYT has come out with a hit, in turn...despite the tribulations introduced by organizational changes. Further (and important to Microsoft), SBYT has developed the first truly blockbuster MS-Windows title, "Civilization 2." And "Magic The Gathering" as well as "Master of Orion 2" are both on the way for Windows '95.
Sierra Online was bought out for over three times the cap of SBYT, and Sierra has nowhere near SBYT's track record in '96. SBYT's current debt is a non-issue, as most of it exists as cash reserve. The deficit is in fact miniscule for a buyer. The combination of strong products, and weak (but improving) financials puts Spectrum at the *top* of the entertainment buyout list, far above other similar companies with weak products and weakening financials.
If the entertainment software industry is challenged for shelf space, it is due in large part of late to displacement by Spectrum Holobyte/Microprose titles. The "sexy" titles started early this year and haven't stopped.
Dan Spillane
Seattle/Redmond, WA |
