Take it easy on Steve Race. A few things about this:
Race didn't call the final shots at Spectrum/Microprose. Don't kid yourself.
That place never made money. Maybe a few quarters in ten years, in reality, never a full year. Check the San Francisco Chronicle archives going back 5 years for avid condemnations of management, way before Race. Like most computer game companies, most years. They never got decent distribution like EA had, and they seemed always to be in grow or die mode.
Like most game companies, they knew d**k-all about developing software, and like most gamers, the staff and management thought they knew everything about everything. Add to that the tendency to let novices in software development and production make lots of important decisions, and you have the beginning of the standard game company failure scenario.
Then add lots of staff overtime and burnout, lousy equipment and conditions. People kept on by promises of bonuses and royalties that never arrive. Promise the programmers, who are gamers, creative design input and then ignore them. Pretty soon, you have a huge staff turnover. Every time a programmer leaves, all their code gets dumped, because of poor management understanding and coordination. (No ordinary IS ability.)
To apply the coup de gras, make all design decisions by committee, with occassional design by management drive-by. Add another committee to review all new game ideas, and you will have finished trashing the creative process.
That's why most games cost too much and take too long to succeed. And why most game ideas for games that actually get made suck.
Especially think about this - this started out as a Robert Maxwell company - you know, a little thought about the implications of that and none of us would have been so surprised.
Next time you buy a game company, ask yourself what their burn rate is and how many 4-million-copy sellers they have to have each quarter or year to just survive. MPRS would have needed a blockbuster each and every quarter to survive their burn rate. Even movie studios control costs enough so that one or two big hits a year are all they need. If the math of success doesn't seem way inside the easily possible range, don't buy the stock.
Race did a fairly good job of giving the place a fighting chance, but this is not the time or stock market for companies that perpetually have promised but never delivered. He got hired just in time to hold the bag.
Computer game company stocks are mostly for suckers. Not that I didn't get caught in this particular trap myself, I admit. For years they have mostly served as marketing adjuncts for movie and toy companies, with investors paying to keep costs down for those who really matter.
Now that that isn't working out so well, the game business will explitcitly end up in the hands of media, game, and entertainment outfits, who will now pay for their own game-as-free-advertising efforts.
MSFT will pay for games to be made to promote Windows, Hasbro to promote toys, Dreamworks and Lucas to promote movies, extend brands and so on. Because of the strength of their licensed assets, they will actually make some money on some games, and won't lose it back doing other stuff. Kids will live in those little licensed worlds of toys, games, clothes and tapes. Straight computer game companies will continue to struggle.
The only real shot will be for small tight teams with their own ideas, sans much management or marketing overhead, who market initially free and on the internet, ala Id (Doom.) When they IPO, buy them if they have one good game. Then, as soon as they begin to look organized and managed, dump them. It's the death knell.
If you are tempted by a new game company also remember this: You will be buying a new company, in a mature industry, with flat sales growth, lots of bitter competition, and very few profitable companies. Sound good? I'd like to talk to you about an investment, pal...
Cheers,
Chaz |
