Acclaim Entertainment filed for Chapter 7 bankruptcy in a filing with the US Bankruptcy Court in Central Islip, New York. 600 employees have lost their jobs and the fates of several in development games, including Juiced, The Red Star and 100 Bullets, as well as new entries in the “Worms” franchise, are currently up in the air. The company has also faced lawsuits from some of its top licensees, including ones from teen superstars Mary-Kate and Ashley Olsen and biking legend Dave Mirra. At least one creditor was owed more than $20 million. Earlier this year, it restated three fiscal years of financial results to correct an accounting error. The company had been trying for months to get new financing. Negotiations with a proposed lender to replace the company’s former primary lender, GMAC Commercial Finance had terminated and the company’s credit facility with GMAC expired on Aug. 20 and was not extended. According to its annual report filed with the U.S. Securities and Exchange Commission, the company’s assets totaled $47.3 million and liabilities of $145.3 million, as of July 1. Shares of the Glen Cove, New York-based company, which was founded in 1987, peaked at more than $30 a share in late 1993 but last broke $5 in mid-2002 and have traded below $1 since last September. Over-the-counter Pink Sheets of Acclaim traded at around 2 cents on Thursday morning. RIP…..
The prospect of consolidation of the video game software sector took another step forward Friday, as Acclaim Entertainment warned that it may soon wind up in bankruptcy after shares hit a 52-week low of 25 cents a few days ago. “Acclaim shares remain a speculative investment until management demonstrates its ability to execute on its strategy of making fewer, higher quality games,” Wedbush Morgan analyst Michael Pachter wrote Friday. “We believe that the company has a respectable lineup of games planned for release in [fiscal 2005] , but due to continuing cash flow problems, its ability to deliver these games on time remains in question.” In its annual report filed Thursday and in an earnings release on Friday, the game maker reported that it is in default on some of its convertible notes and at least three of its licensing agreements are in dispute, in part because Acclaim’s partners claim it hasn’t been paying royalties on time. While Acclaim negotiated a $30 million line of credit in May, it is facing a cash crunch. At the end of fiscal year on March 31, the company had just $1.1 million in cash, compared to $41.2 million in short-term debt.
In what was probably one of the most successful spamming campaigns yet (judging by the sheer number of “announcements” that hit the web) two ex-Microsoft employees – Herb Marselas & Chas (Charles) Boyd formed Redmond game studio Emogence LLC. If you are at all familiar with DirectX development then you know these guys have been in the trenches at Microsoft for years. Marselas is Emogence’s CEO and is a veteran who worked for game developers Ensemble Studios and Bungie Studios, both of which were acquired by Microsoft where he became a lead developer on DirectX graphics. Boyd was the architect of Direct3D at Microsoft for the last several years. Marselas is quoted as stating that the game is being designed to his and Boyd’s strengths, with an emphasis on advanced graphics technology. The two say they founded Emogence last September to create games that will take advantage of the latest, fastest technology, such as video cards and graphics chips. They claim that they want a shorter development schedule because graphics technology changes so rapidly they feel they can ship a game in 10 months – apparently by automating the generation of a lot of the content.
From the IGN Interview:
Jonric: Shipping this year would represent a much shorter development period than we’re used to seeing. How realistic is this? What are the keys to achieving it without undue bugginess?
Marselas: We wouldn’t have announced the date if we weren’t confident in it.
But the programmers, who run a “virtual company” that employs half a dozen artists across the country, have no publisher for their game, called “Grafan”,’ at this time. They plan to show the game at E3 this year.
In an interview with CNNMoney, Valve’s marketing director Doug Lombardi stated that the company “is currently targeting this summer for the completion of Half-Life 2″. They aren’t going to reveal any more information till E3 in Los Angeles (May12-14). The article discusses the other games that were delayed along with HL2, those that are planning to use the HL2 engine. The article also claims that between the HL2 delay and the delay of id Software’s Doom 3, PC games sales are down due to gamers waiting for these games to ship before upgrading their systems. (Sales were down 14% from 2002) They also think that games sales will pick up once these title hit the shelves.
Data released on Monday by Mercury Research shows that ATI edged out NVIDIA in sales for Q4 2003. The numbers were Intel 31.7%, ATI 24.9%, and NVIDIA 24.7%. ATI increased at Intel & NVIDIA expense. Most of the change was in add-in cards (vs. integrated chip-sets), where ATI has handily been beating NVIDIA. This was quickly followed by Goldman Sachs analyst Andrew Root questioning if NVIDIA can meet is revenue estimates, though he didn’t change his estimates for the company. NVIDIA’s stock price has dropped about 10% this year while ATI’s has increased about the same amount. NVIDIA will host a conference call to discuss its financial results for the fourth quarter and the fiscal year ending January 25, 2004 on February 12, 2004 at 2:00 PM, Pacific Time. The Company’s prepared remarks will be followed by a question and answer period, which will be limited to questions from analysts and institutional investors. To listen to the conference call, dial 706-679-0543; no password is required. The conference call will also be webcast at www.nvidia.com and www.streetevents.com.
As you already know, someone hacked into the Valve offices and stole the HL2 code, prompting a 8-9 month delay in the publishing of HL2. According to some recent articles on Slashdot and HalflifeRadio, the FBI launched a raid on the San Francisco home of programmer Chris Toshok, confiscating various items of hardware and software. Toshok was also questioned by the FBI and Secret Service regarding his association with Hungry Programmers, his ex-house mates. While some of the source code has already shown up on the net, apparently a 2-disc pirated version has found its way onto store shelves in the Russian city of Novosibirsk this month, translated into Russian, but with some gaps in the game. This delay has really screwed up ATI’s million-dollar deal with Valve – particularly the HL2 bundle with the Radeon 9600XT. Many of ATI’s partners are pulling out of the deal, not providing the HL2 copy supposedly included with video card, or just covering over the HL2 mention on the box with a sticker. ATI says;
“Beginning in December board partners had the option of purchasing the bundle from ATI for a small fee with all RADEON 9800 and RADEON 9600 series products except the RADEON 9800 XT which continued to include the bundle without charge. So, there hasn’t been any change in the availability to our partners and they all have the option to continue with the bundle or not”
In a somewhat quiet announcement (which is my excuse for not noticing it allure) Capital Entertainment Group closed its doors in October seemingly due to lack of interest from VC’s to further fund the company (to the tune of $US20-30 million). CEG was started by Mark Hood, Kevin Bachus, Seamus Blackley and Gene Mauro with the express intent of making it easier for game developers to get funded by acting as the middle man between developers and publishers by providing funding/expertise and taking a cut from the game sales. Read more about that here. The 2003 holiday season was supposed to be the delivery date for the first run of games from CEG. CEG supposedly had a deal in place with Sega for its first two games. Guess we won’t be seeing anything now. Dean Takahashi (San Jose Mercury News & author of “Opening the XBox”) seemed to be the only person who noticed CEG’s demise in this article.
“We came to the conclusion we weren’t going to close our round,” said Eugene Mauro, chief executive officer of CEG. “Our idea for a new kind of business model was good. But the timing was off for us.”
Kevin Bachus was equally obstinate.”There’s no question in my mind that this business model will appear in the games industry in the next three years. The demand is there. The challenge is finding investors who share the appetite for risk.”
Seamus Blackley continues to amaze me with his ability to come out of mediocre situations with interesting jobs. (I think he did an excellent job with XBox BTW, even though it’s a huge money hole for Microsoft). With the announcement of CEG’s shutdown was a nearly unnoticed announcement by one of Hollywood’s most powerful talent brokers, Creative Artists Agency (CAA) that they had hired Seamus as a talent agent where he’ll be scoping out new hires – (either titles or talent was unclear).
Wired also has an article about this in “Games, Movies Tie the Knot“. Gamespot has run an interview with Seamus that you can find here. It turns out that both Seamus and Kevin were at the Spike TV Video Game Awards.
Coming up from off-screen, Creative Labs has acquired Sensura for $US6.4M, acquiring all of Sensura’s 3D sound IP and existing deals. Some of Sensaura’s consumers include Analog Devices, Audiotrak, Cirrus, Crystal Logic, C-Media, ESS, Guillemot-Hercules, VideoLogic, M-Audio, NVIDIA, Realtek, Terratec, Yamaha, Voyetra Turtle Beach, and VIA Technologies… in other words pretty much everyone that Creative already isn’t selling to. Seansaura was an interesting company since they didn’t make chips – they basically did 3D sound research – and did a very good job with their “digital ear” technology. Basically they were really good at creating sounds for reproduction in 3D environments – especially those reproduced by headphones. This is particularly interesting since folks like NVIDIA & VIA are competing directly with Creative through Creative’s 3DLabs subsidiary. I haven’t heard much from 3DLabs lately, and talks with NVIDIA and ATI show they are focusing on targeting the workstation market (traditional 3DLabs territory). It’ll be interesting to see how this plays out.