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|industry= [[Consumer electronics]], [[video game industry|video game]]
|industry= [[Consumer electronics]], [[video game industry|video game]]
|products= MPI-500 Digital Television Receiver, The MPI-100 HDMI Device Switchter, MPPC-AP01 Arcade Professional controller, Redline Cabling, Powerline PSP Battery/Stand.
|products= MPI-500 Digital Television Receiver, The MPI-100 HDMI Device Switcher, MPPC-AP01 Arcade Professional controller, Redline Cabling, Powerline PSP Battery/Stand.
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Revision as of 22:47, 28 February 2008

Microprose Systems.
IndustryConsumer electronics, video game
Founded1982, 2007 as Microprose Systems.
Headquarters
New York, N.Y.
,
U.S.
ProductsMPI-500 Digital Television Receiver, The MPI-100 HDMI Device Switcher, MPPC-AP01 Arcade Professional controller, Redline Cabling, Powerline PSP Battery/Stand.
ParentInteractive Game Group
Websitemicroprosesystems.com

MicroProse Systems, LLC. (also known as MicroProse Simulation Software) is a North American video game accessories and consumer electronics developer reformed in 2007. Originally founded in 1982 by Sid Meier and Bill Stealey, it was known for its publishing of the majority of Meier's hit computer games.

History

In the 1980s, MicroProse was primarily known as a publisher of flight and military simulation titles for 8-bit home computers such as the Commodore 64, Apple II, and Atari 8-bit family, with titles such as "Spitfire Ace" and "Hellcat Ace". It also published a few strategy games at the time.

As industry changed over to 16-bit and 32-bit CPUs in late 1980s, MicroProse started supporting IBM PC compatibles and 68000-based machines like the Amiga and Atari ST. MicroProse also started a UK branch to cross-publish titles in Europe, and to import some European titles to be published in the US.

In 1990 and 1991 MicroProse released the blockbusters Railroad Tycoon and Civilization, by Sid Meier, on multiple platforms. Both of which quickly became two of the best-selling strategy games of all time and spawned multiple sequels.

MicroProse also released Geoff Crammond's Formula One Grand Prix to adulation in 1991. The Amiga and Atari ST versions were released first, and the DOS version followed in early 1992. The game was considered the best Formula One sim to date.

In 1992, MicroProse acquired Leeds-based flight simulation developer Vektor Grafix[1], who had already developed titles for them such as B17, turning it into a satellite development studio.

Diversification Attempt

MicroProse, in an attempt to diversify without changing their name, created two labels, MicroStyle in the UK, and MicroPlay in the US. This label released games like Rick Dangerous 2 (adventure), Stunt Car Racer (arcade racing) and Xenophobe (action/arcade).

In early 1990s, MicroProse, in an attempt to diversify beyond its niche roots as a flight sim and military sim company, decided to create an arcade game division, as well as invested a large sum of money to create an adventure game engine with which it could produce several games. However, the arcade division was canceled after making only two games: F-15 Strike Eagle The Arcade Game, and B.O.T.T.S. (a giant fighting robot game). Both of which featured high-end (for its time) 3D graphics, and failed to became popular as it was too different from existing machines. The adventure game engine was finished, but only three games (Rex Nebular and Return of the Phantom and Dragonsphere) were published before it was shelved and sold off to Sanctuary Woods.

In the mid 1990's insufficient financial resources prevented MicroProse from developing games for other game platforms such as Playstation and Nintendo 64, therefore MicroProse remained concentrated on the PC game market.[2]

Enter Spectrum Holobyte

In 1993, MicroProse was acquired by Spectrum Holobyte, another game company. Founder Bill Stealey was good friends with Spectrum HoloByte president Gilman Louie, and convinced Louie to help MicroProse as Stealey was afraid that some bank will not understand the company culture. That same year, the UK office of MicroProse closed two satellite offices in northern England, and disposed of over forty staff at its Chipping Sodbury head office.

In 1994, Bill Stealey departed MicroProse. Spectrum HoloByte agree to buy out his shares. Bill Stealey went on the found Interactive Magic, another simulation software company.

Despite cuts, president Gilman Louie managed to line up several big name licenses, including Top Gun, Magic: The Gathering, Star Trek: The Next Generation, and later MechWarrior (part of the Battletech universe). Also, the UK import UFO: Enemy Unknown, renamed as X-COM: UFO Defense, proved to be an unanticipated hit in 1994.

Spectrum HoloByte, however, was in trouble. It was trying to get Falcon 4.0 out the door ever since it pushed out Falcon 3.0 in 1991, and it had been delayed for many years.

Both MicroProse and Spectrum HoloByte continued as separate brands until 1996. In 1996, Spectrum HoloByte, to reduce costs, started cutting a majority of the MicroProse staff. Soon after, it consolidated all of its titles under the MicroProse brand (essentially renaming itself MicroProse). Sid Meier and Jeff Briggs departed the company after the staff cut, forming a new company called Firaxis Games. Brian Reynolds, who designed Civilization II, also moved to Firaxis. A core group of disillusioned artists, designers and programmers left MicroProse UK to join Psygnosis, which opened an office in Stroud, UK, specifically to attract ex-MicroProse employees.

GT Interactive's $250 million cancelled offer

On October 5th 1997, GT Interactive 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. After the announcement MicroProse's stock price reached $7 a share. GT Interactive expected the deal to be completed by the end of that year.[3][4]

But on December 5th the acquisition was cancelled, according to both CEOs "the time is simply not right" for the deal. MicroProse's stock plummeted to just $2.31 after the announcement of the deal's cancellation.[5][6]

In November 1997 MicroProse was sued by both Avalon Hill (who had the US publishing rights to the name Civilization)[7] and Activision for copyright infringement. MicroProse responded by buying Hartland Trefoil, who owned the rights to the Civilization name, and then sued Avalon Hill and Activision for trademark infringement, and unfair business practices as a result of Activision's decision to develop and publish Civilization computer games.[8] Because Hasbro was negotiating the acquisition of both Avalon Hill and MicroProse, the lawsuits were settled in July 1998. Under the terms of the settlement MicroProse became the sole owner of the rights of the name Civilization and Activision acquired a license to publish a Civilization computer game which was later called Civilization: Call to Power.[7][9]

Hasbro Interactive buys MicroProse

In preparation for its sale, in June 1998, MicroProse closed down its studio in Austin, Texas. As a result of the closure, 35 employees were laid off.[10]

In August 14th 1998, Hasbro issued a cash tender offer to purchase all MicroProse's shares for $6 each.[11] The deal was completed on September 14th, Hasbro managed to buy 91% of MicroProse's shares and announded that MicroProse had become a wholly owned subsidiary of Hasbro.[12] The remaining shares would also be acquired for $6 in cash.

MicroProse was acquired for $70 million in cash by Hasbro and then merged with Hasbro Interactive.[13] At that time MicroProse's staff costed $20 million a year.[14]

At the time of Hasbro's acquisition, MicroProse had 343 employees, including 135 at Alameda, CA. Besides the development studio in Alameda, MicroProse had three other studios: Hunt Valley, MD; Chapel Hill, NC; and Chipping Sodbury, England.[2]

In 1998, MicroProse finally managed to publish Falcon 4.0, before the Christmas shopping season. However, the initial release was plagued with bugs and the simulation of a real F-16 is so authentic — and thus complicated — that it intimidated most gamers, resulting in disappointing sales.

MicroProse's demise

MicroProse's demise began in December 1999, when Hasbro Interactive closed down former MicroProse studios in Alameda, California and Chappel Hill, North Carolina.[15][16]

In January 2001, after French game publisher Infogrames Entertainment SA (IESA) took over Hasbro Interactive for $100 million [17], MicroProse ceased to exist. Its latest title in US, European Air War, was reissued with Infogrames logo instead of MicroProse logo.

Atari shut down the former MicroProse studio in Chipping Sodbury, United Kingdom in September 2002.[18]

The last new game released with the MicroProse name was the UK version of Geoff Crammond's Grand Prix 4, in late 2002. In the 1990s MicroProse had a development studio in Chipping Sodbury UK, which commissioned many games from smaller UK developers, including Grand Prix and Transport Tycoon. The MicroProse name was preserved on GP4 in the UK due to the respect it held amongst fans of racing simulation games.

IESA intermittently used the Atari name as a brand name for selected titles before officially changing the U.S. subsidiary's name to Atari, Inc. in 2003.[19] In November 2003, Atari Inc. closed the last former MicroProse development studio in Hunt Valley, Maryland,[20] which was MicroProse's original location. However, several game developers now exist in the area, including Firaxis Games and BreakAway Games, who all owe their origin to MicroProse.

MicroProse Returns

During the summer of 2007, Frederic Chesnais resigns as CEO of Atari Interactive, Inc. and acquires Microprose and several of its properties under his Interactive Game Group (I2G) Corporation. The company is divided into two new divisions - Microprose "Blue" which is its newly formed Consumer Electronics Division and Microprose "Red" which is busily writing new games and software. Microprose Blue has a full line up of Consumer Electronics, cabling, power products as well as a line of new game controllers. All of which will be available into retail channels in late spring/early summer 2008.

Financial performance

The tables below contain selected financial data extracted from MicroProse's Annual Report of 1998 and 1997. [21][22] Fiscal Year ends on March 31.

MicroProse's Revenue (in millions )
Year 1993 1994 1995 1996 1997 1998
Revenue[23][24] $13.6 $40.9 $84.3 $59.6 $100.3 $60.0
Variation 200% 106% -29% 68% -40%

As it can be seen from the table above, MicroProse's revenue performance varied according to game releases. The release in February 1996 of Civilization II is one of the factor that weighed positively on 1997's financial result, that year revenues rose 68% to $100 million. MicroProse recognized that deficiency, the Annual Report of 1998[25] informed:

"The Company depends on both the timely introduction of successful new products or sequels to existing products to replace declining revenue from older products."

And continued:

"If for any reason revenue from new products or other activities fails to replace declining revenue from existing products, or if revenue from back-catalog titles declines significantly, the Company's operating results may be adversely affected."

That's why MicroProse's revenue varied so wildly, and in order to grow stably an ever increasing number of major game titles would have to be released in a timely basis and just maintaining revenues on the level of the previous year was a challenge.

MicroProse's Net Income/Loss (in millions)
Year 1993 1994 1995 1996 1997 1998
Net Income (Loss)[26][27] $-4.0 $-58.4 $-18.0 $-39.8 $7.9 $-33.1

MicroProse lost $145 million between the years 1993 and 1998. The incapacity of MicroProse to operate profitably explains why the company could not stay as an independent one for much longer and sought acquisition from GT Interactive and Hasbro Interactive. In addition, MicroProse's over dependence on new releases for both profits and revenues helps explain why MicroProse's market value went from $250 million in October 1997 to just $70 million 10 months later.

In the first quarter of 1999, MicroProse posted revenues of $12.1 million and net losses of $7.8 million.[28]

Selected games

Main article: List of MicroProse games

See also

List of MicroProse games

Notes and references

  1. ^ "MicroProse buys Vektor Grafix" article from Computer Business Review Online
  2. ^ a b "Hasbro Buying Alameda's MicroProse" from San Francisco Chronicle
  3. ^ "GT Interactive to Expand as World's Fastest Growing Interactive Entertainment Company Through Acquisition of MicroProse" from BNET Research Center
  4. ^ "$250 Million Stock Deal for Microprose" from The New York Times
  5. ^ "MicroProse and GT Interactive Call Off Merger" from CBR Online
  6. ^ "Company News; Microprose And Gt Interactive End Merger Talks" from The New York Times
  7. ^ a b The Fall of Avalon Hill from Academic Gaming Review
  8. ^ " Avalon Hill Swallowed" from Gamester's
  9. ^ http://sec.edgar-online.com/1998/08/12/15/0001047469-98-030753/Section9.asp
  10. ^ Microprose Inc/DE · 10-Q · For 6/30/98 from the SEC
  11. ^ Hasbro MicroProse acquisition information (SC 14D1) from the SEC
  12. ^ Hasbro MicroProse acquisition information (SC 14D1/A) from the SEC
  13. ^ Hasbro quarterly report for 9/27/98 from the SEC
  14. ^ Hasbro Interactive study from Tuck School of Business at Dartmouth (PDF)
  15. ^ "Hasbro to Cut 20% of Its Jobs and Take $97 Million Charge" from The New York Times
  16. ^ "Hasbro Restructures" from Gamasutra NewsWire (December 7, 1999)
  17. ^ "Company News; Hasbro Completes Sale of Interactive Business" from The New York Times
  18. ^ "Infogrames closes UK MicroProse studio" from GameSpot
  19. ^ "Atari lives again" from BBC News
  20. ^ Atari closes former MicroProse studio from GamesIndustry.biz
  21. ^ http://www.secinfo.com/dVut2.7p6e.htm
  22. ^ http://www.secinfo.com/dRqWm.8wVa.htm
  23. ^ http://www.secinfo.com/$/SEC/Filing.asp?T=RqWm.8wVa_zgb
  24. ^ http://www.secinfo.com/$/SEC/Filing.asp?T=Vut2.7p6e_10ni
  25. ^ http://www.secinfo.com/dVut2.7p6e.htm#1z5k
  26. ^ http://www.secinfo.com/$/SEC/Filing.asp?T=Vut2.7p6e_10ni
  27. ^ http://www.secinfo.com/$/SEC/Filing.asp?T=RqWm.8wVa_zgb
  28. ^ http://www.secinfo.com/dVut2.7U1e.htm#1r4
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