Skip to main content
If you click on a link and make a purchase we may receive a small commission. Read our editorial policy.

Comment: How the once-mighty might fall

Things aren't looking good for two of the oldest names in the industry at the moment. Interplay's problems are well-publicised, and the demise of the publisher has looked inevitable since Titus began stripping off the valuable assets of the company some years ago - although nobody quite expected the bizarre turn of events which saw CEO Herve Caen claiming that building a Fallout MMORPG was going to turn the firm's fortunes around. That his frankly mind-boggling announcement came in the same fortnight that saw both Ultima X: Odyssey and Warhammer Online being cancelled only added to the surreal nature of the claim. Nobody is happy to see a one-time standard-bearer such as Interplay in such deep trouble, but Caen does at least seem determined to keep entertaining the audience until the fat lady sings.

The other one-time industry leader for whom things aren't going terribly well at the moment is Acclaim; this week, the company was forced to admit that it could well go bankrupt if it cannot secure a new credit facility in the next few weeks. Acclaim needs a $30 million credit line, and it has already extended its agreement with GMAC Commercial Finance past its limit. While the chances are that the company will be able to find finance in some form before its time runs out in August, this is by no means certain - and the figures don't look good.

After all, this is a company which lost $50 million last year, and $80 million the year before; and after losing one key franchise when Criterion upped stakes and brought the Burnout series to Electronic Arts, the company has been hit with further blows by the loss of the Major League Baseball Players' Association license (which will cripple the prospects of All-Star Baseball, since it now won't have ANY stars) and the Turok license, both as a result of an apparent failure to pay royalties to the respective license owners.

More worryingly, Acclaim's shareholders have apparently lost faith. Shares in the company crashed after it filed its 10-K forms with the Securities and Exchange Commission last week, outlining its difficult position; at one point dropping below 15 cents. The biggest difficulty that this presents is that it has dropped Acclaim's market capitalisation through the floor - and the company now finds itself trying to find a $30 million credit line for a firm which is worth under $24 million on paper.

If Acclaim can survive this difficult period, there's no doubt that there's a road to recovery open for the company. The firm's release schedule for the coming year isn't terrible by any means, and like most decent-sized publishers, it has some next-generation R&D work in progress which could turn out to be valuable in the mid-term. For investors with some spare cash to gamble, it's an interesting speculative investment, according to some analysts; after all, from 15 cents, the only way is up - or bust. But Acclaim's future - and the future of the many development and publishing staff it employs - is extremely uncertain, and as is the case with Interplay, there's no obvious purchaser for the company, no matter how low its shares go.

However poor their performance in recent years may have been, it's a sobering thought that the industry risks losing two of its oldest publishing firms within the coming weeks - and insider whispers, as ever, suggest that while only two firms are known to be on the cliff-edge right now, there are several more who could end up in the same position before the end of the year. It's one thing to talk about the difficulties posed by the next generational transition; in reality, it seems like the last one still hasn't finished claiming victims.

Rob Fahey is GamesIndustry.biz' editor, and can be reached at [rob@gamesindustry.biz].

This editorial originally appeared in the GamesIndustry.biz News Digest, a free email news bulletin which is distributed to subscribers every day of the week and features a round-up of the key headlines of the day, the latest major share movements from industry companies, and the day's new job postings. Each Thursday afternoon, this digest is presented in a special omnibus form with the week's game charts and an editorial focus piece.

You can sign up to the GI.biz News Digest by entering your email address in the box on the left hand side of this page and clicking "Join". Your personal privacy is respected and your email address will not be sold on to any third parties.

Author
Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.