GT Interactive Software

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GT Interactive Software
Former type Public
Industry Interactive entertainment
Fate Stake purchased by Infogrames
Successor(s) Infogrames Interactive
Founded 1993
Founder(s) Ron Chaimowitz,
Cayre Family
Defunct 2000 (became Infogrames Entertainment, SA, then Atari, Inc in 2003)
Headquarters New York, NY, USA
Area served World
Key people Ron Chaimowitz
Kenneth Cayre
Joseph Cayre
Stanley Cayre
Harry M. Rubin
Products Unreal ('96-'99 period), Mortal Kombat III, Mortal Kombat Trilogy, Doom II, Quake, Duke Nukem, Oddworld, Rogue Trip: Vacation 2012, Select Beavis and Butt-head video games
Revenue Decrease$408 million (1999)[1]
Operating income Decrease$-267 million (1999)[1][2]
Net income Decrease$-254 million (1999)[1][2]
Employees 1,168 (August, 1999)[3]
Parent GoodTimes Home Video
Subsidiaries Humongous Entertainment, Legend Entertainment, Reflections Interactive, Cavedog Entertainment

GT Interactive Software Corporation (Good Times[4] or GTI[4]) was an American video game publisher and distributor, which later developed both video games and PC games.

GT Interactive ceased to exist in December 1999 when Infogrames Entertainment SA (IESA) took a controlling stake and renamed the company Infogrames, Inc.[5] In 2003, Infogrames Inc. changed its name to Atari Inc.[6]

History[edit]

1993 – GT Interactive is founded[edit]

GT Interactive was founded in 1993 as a division of Good Times Home Video, a video-tape distributor owned by the Cayre family with Ron Chaimowitz as co-founder and President. That same year, the publisher saw the release of their first shareware title, the hugely popular Doom, eventually sell 2.9 million copies.[7] In its first year, revenue reached $10.3 million.[8]

1994 – 880% revenue growth[edit]

GT Interactive revenue soared 880% and reached $101 million on its second year of existence and profits reached $18 million.[9] GT Interactive's partnership with id Software scored another hit with Doom II: Hell on Earth, which was released in October and sold over 2 million copies.

1995 – GT Interactive's IPO[edit]

In February, GTIS obtained the publishing rights to games based on Mercer Mayer property, which included Little Critter and Little Monster.[10] GT Interactive began to set up displays at K-Mart and Wal-Mart for low cost software.[11]

GTIS signed an exclusive software supplier agreement with Wal Mart,[citation needed] that meant according to UBS Securities analyst Michael Wallace: "All software developers have to deal with GT if they want to sell in a Wal-Mart."[8]

In December, GT Interactive debuted on Nasdaq, its IPO raised $140 million and was one the biggest IPOs of the year only losing to the IPO of Netscape.[citation needed][12] GT Interactive Software Corporation was listed on Nasdaq as GTIS.[13]

GT Interactive offered 10 million shares to the public at $14 each.[12] During GT Interactive's IPO, Appellee Cayre sold more than 1.4 million shares, 9.2% of his shares, for a $20 million return.[12]

GTIS reported a strong revenue growth of 134% in the year to $234.4 million but, in the first sign of trouble ahead, profits increased a meager 23% to $22.6 million.[3]

1996 – Humongous Entertainment is acquired[edit]

In January, GT Interactive obtained the publish rights for the highly anticipated Quake from id Software.[citation needed] In February, GTIS and Target signed an agreement in which GT Interactive became the primary consumer software supplier to all Target's 675 stores.[14]

In June 1996 GTIS acquired WizardWorks, which developed Deer Hunter, for 2.4 million shares and FormGen, which had the publishing rights of Duke Nukem, for 1 million shares[13] or $17 million.[15]

Quake was also released in June by GT Interactive for PC game. Quake sold 1.8 million copies and became a classic PC game.[16]

In July, the game developer Humongous Entertainment was bought by GT Interactive for 3.5 million shares or $76 million.[17] In 1995, Humongous Entertainment's revenue had risen to $10 million, an increase of 233% over 1994's revenue of $3 million.[17] The deal gave GT Interactive rights to successful children's software titles such as the Putt-Putt franchise as well as the Freddie the Fish and Spy Fox series.

In November, GTIS acquired Warner Interactive Europe for $6.3 million in cash, with this acquisition GTIS gained access to software markets in Western Europe.[13]

In a further sign of uncertainty about GT's future, GTIS, for the year, reported a net income increase of only 11% over the previous year to $25.1 million. Revenue growth also decelerated to 56%, revenue for the year was $365 million. Making matters worse, net income in the fourth quarter reduced 16.8% to $8.5 million when compared to 1995's fourth quarter.[3]

1997 – $530 million in revenues but $25 million net loss[edit]

In January, GT bought One Stop, a European value software publisher, for $800,000 in cash.[13]

In June, GTIS signed a deal with MTV, the deal gave GTIS the rights to publish games based on Beavis and Butt-head and Aeon Flux.[citation needed]

On October, GTIS bought game developer SingleTrac for $14.7 million, $5.4 million in cash and $9.3 million in stock. SingleTrac owned and developed such games as Twisted Metal and Jet Moto.[18] In September game developer Cavedog Entertainment, a division of Humongous Entertainment,[19] made its first release, Total Annihilation,[20] which sold more than 1 million copies.[3]

On October 5, 1997, GTIS announced that it had signed a definitive agreement to acquire MicroProse for $250 million in stock; the deal had even been unanimously approved by the Board of Directors of both companies and was expected to be completed by the end of that year.[citation needed][21]

But on December 5 the acquisition was cancelled, according to both CEOs "the time is simply not right" for the deal. MicroProse's stock plummeted after the announcement of the deals cancellation.[22][23]

GTIS's result was negatively affected because, in March, GTIS stopped being the exclusive computer software distributor to Wal Mart, who decided to buy its software directly from the publishers.[citation needed]

In 1997 GT Interactive's share of the Entertainment software market reached a historical low of 6.4% down from the record highs of 9% and 10% years earlier. GT Interactive was a leader only on the arcade/action category, with a 20.3% market share. Making matters worse, GT Interactive also had a high debt/equity ratio of 41%, Electronic Arts had a debt/equity ratio of just 8%. For 1997 GTIS's return on equity was a dismal -16.14%.[24] For the year, GTIS's revenue growth continued to decelerate, increased only 45% to $530 million.[25] During 1997 GT Interactive posted its first net loss, totalling $25 million.[3]

1998 – Revenue growth falls to 10%[edit]

In May, Epic Games's Unreal was published by GT Interactive, in the first 10 months over 800,000 copies were sold. Coincidentally Deer Hunter II, which was released in October also sold 800,000 copies.[3]

In November, GTIS bought One Zero Media for $17.2 million in stock, becoming the first game publisher to own an entertainment Internet website.[18]

Legend Entertainment was acquired for around $2 million,[18] while Reflections Interactive was acquired for 2.3 million shares or $13.5 million.[18] Both companies were bought in December of 1998.[26]

In the fourth quarter of 1998 GT Interactive posted a net income of $16.7 million on revenues of $246.3 million.[1] For the year, GT Interactive reported revenues were almost flat rising 10% to $584 million, but GT Interactive swung into black by posting a $20.3 million net income (results from the fiscal year ending on December 31, 1998).[1][3]

1999 – Infogrames buys GT Interactive[edit]

The year of 1999 brought bad news for GT Interactive's shareholders: GTIS posted first quarter losses of $90 million due to restructuring costs.[3] In February, in light of the bad results, CEO Ron Chaimowitz was replaced.[25]

Games sales in 1999 fell in comparison to 1998, which had dire consequences on GTIS's finances. In April, GTIS predicted for 2000 a first quarter loss of $55 million on revenues of around just $95 million. A failure to release 5 major games and a planned relocation to Los Angeles added to the losses.[citation needed] In June, GTIS announced it had hired Bear Stearns to look into the possibility of either a merger or a sale of the company and in October GT Interactive fired 35% of its workforce or 650 employees mostly from its distribution section.[27]

In June Reflection's Driver was released, selling approximately 1 million copies.[3] In July GTIS sold One Zero Media for $5.2 million in cash, just six months after it was purchased.[18]

On November 16, Infogrames announced that it would buy 70% of GT Interactive for $135 million and assume $75 million in bank debt. By June 2000, Infogrames had invested $30 million in GT.[27]

Ten days later GT Interactive made one of its last releases, the classic Unreal Tournament which went on to sell more than 1 million copies.[citation needed]

IESA's acquisition came just in time because GT Interactive's 1999 results were dismal. Revenues fell 30% to $408 million in 1999 and GT Interactive posted a net loss of $254 million for the year (results with the fiscal year ending on December 31, 1999).[1][2]

On December 16, the deal was consummated and GT Interactive was no more, becoming Infogrames, Inc., a subsidiary of IESA.[3]

IESA has since retired the GT Interactive brand, after Infogrames, Inc. became Atari, Inc in 2003.[28]

Games published[edit]

Game.com[edit]

Game Boy[edit]

Game Boy Color[edit]

Macintosh[edit]

Nintendo 64[edit]

Microsoft Windows[edit]

PlayStation[edit]

Sega Saturn[edit]

Games developed[edit]

Macintosh[edit]

PC[edit]

PlayStation[edit]

References[edit]

  1. ^ a b c d e f SEC Info - Atari Inc - 10-Q - For 12/31/99, As Of 2/14/00 - Table in Document 1 of 2 - 10-Q - Gt Interactive Software Corp
  2. ^ a b c SEC Info - Atari Inc - 10-K - For 3/31/99, On 6/29/99 - Table in Document 1 of 9 - 10-K - Gt Interactive Software Corp
  3. ^ a b c d e f g h i j SEC Info - Atari Inc - 10-K - For 3/31/99
  4. ^ a b Kushner, D. (2003). Masters of Doom: How Two Guys Created an Empire and Transformed Pop Culture. Random House. ISBN 0-375-50524-5
  5. ^ "Infogrames Entertainment Corporate Profile and Annual Report" (PDF). Infogrames Entertainment SA. Fiscal Year 2005-2006. p. 7. Retrieved 2007-11-06. 
  6. ^ Atari Inc. (March 31, 2003). "10-KT · For 3/31/03, Overview Subsection". Atari Inc. Retrieved 2007-11-06. 
  7. ^ "Now What Was That GT and Hasbro Were Saying About American Game Purchasers Being a Group of 17-28 Year Olds Only Interested in Bloody Games?". Just Adventure. Archived from the original on 2010-12-06. Retrieved 5 February 2012. 
  8. ^ a b 09/02/96 LOTS OF "DOOM" BUT NO GLOOM
  9. ^ SEC Info - Atari Inc - 10-K - For 3/31/99, On 6/29/99 - Table in Document 1 of 9 - 10-K - Gt Interactive Software Corp
  10. ^ GT INTERACTIVE REPORTS RECORD SECOND QUARTER REVENUES; Publishing Business Increases Nearly 300 Percent. - Free Online Library
  11. ^ SEC Info - Atari Inc - POS AM - On 5/1/97
  12. ^ a b c FindLaw for Legal Professionals - Case Law, Federal and State Resources, Forms, and Code
  13. ^ a b c d SEC Info - Atari Inc - 10-Q - For 6/30/97
  14. ^ GT Interactive and Target Stores enter distribution agreement; GT Interactive to Become Primary Software Vendor to More Than 600 Target Stores Nationwide. - Free Online Library
  15. ^ Game Matters: Royal tease
  16. ^ Now What Was That GT and Hasbro Were Saying
  17. ^ a b Baker, M. Sharon (July 14, 1996). "Humongous lives up to name with $76 million sale". 
  18. ^ a b c d e SEC Info - Atari Inc - 10-Q - For 12/31/99
  19. ^ MobyGames - Cavedog Entertainment
  20. ^ cavedog - GameSpot
  21. ^ "$250 Million Stock Deal for Microprose". The New York Times. October 6, 1997. Retrieved May 4, 2010. 
  22. ^ [at /www.cbronline.com/article_cg.asp?guid=99237717-6B91-4283-9EC4-3338CE1B46B0 MICROPROSE AND GT INTERACTIVE CALL OFF MERGER - Computer Business Review]
  23. ^ "Company News; Microprose And Gt Interactive End Merger Talks". The New York Times. December 6, 1997. Retrieved May 4, 2010. 
  24. ^ ElecArts.PDF
  25. ^ a b Gt Interactive Hires Disney Honcho, Raises Cash
  26. ^ Amazon.com: Game Design, Second Edition: Books: Bob Bates
  27. ^ a b "Infogrames Gets Control of GT Interactive". The New York Times. November 16, 1999. Retrieved May 4, 2010. 
  28. ^ Microsoft Word - couverture_GB.doc
  29. ^ Nintendo Power, Volume 86, page 15
  30. ^ http://ign64.ign.com/objects/001/001975.html

External links[edit]