Chapter 260: ID Software. Again
November 7.
Blizzard Entertainment was founded by three UCLA graduates, Michael Morhaime, Allan Adham, and Frank Pearce, as Silicon & Synapse in February 1991. It underwent several name changes during that period, but the goal was clear: to develop computer games, especially those based on real-time strategy.
In January 1994, they were acquired by Davidson & Associates. Was this a naïve move? This company specializes in educational entertainment software, with a strong track record in its creation. It was attracting attention from firms that saw the new field of education technology as a viable business option.
The acquisition was driven by two simple reasons: Blizzard had generated nearly $40 million in software sales.
This led them to invest in what they considered relevant. They hoped to sign on studios and resell them as their value increased. They just hadn't expected a negotiation to come about so soon, only seven months after acquiring Blizzard.
Steve Parks arrived wearing his classic hat and a light gray summer suit to battle the intense California heat. Blizzard's headquarters wasn't particularly impressive, especially in its early stages.
Just sending him here indicated how much Billy valued the company they were about to acquire.
-Good afternoon. I'm Steve Parks, here for a meeting with Bob and Jan Davidson, - said Steve, looking comfortable with his luggage, containing everything he needed for the meeting. What was in the suitcase? Only Steve Parks knew.
He was greeted with the utmost attention, acknowledging the significance of the company that seemed to be at the forefront of the digital content battle. Doom was a technical marvel that surpassed anything created so far, setting a high bar in the industry.
Five people entered an organizational single file, as expected, perhaps reflecting the company's organizational structure.
-Mr. Parks, you're quite punctual, - said Bob Davidson.
Steve Parks smiled as the negotiation began. He stood up and introduced himself: - I'm Steve Parks, Director of Sales at Lux Animation, and currently the negotiator in charge of acquiring Blizzard. -
There was doubt in the room, apparent in the emotions of those present.
-Mr. Parks, you're quite optimistic. When we agreed to this meeting, it was only as a sign of respect for a friendly company in the market, - said Bob Davidson.
-I don't doubt it. But my offer is so irresistible that if I don't change my mind, I'll have to tell my boss that it's impossible to seal the deal with the company, and it's better to allocate resources elsewhere, - said Steve Parks.
His statement caught their attention. He opened his portfolio, revealing numerous manuals from universities across the United States, England, France, and Spain. At least Bob and Jan were familiar with 18 universities considered among the best in the country.
-What's this? - asked Bob, who seemed to be leading the negotiation.
-You're in the educational software business. Can you tell me what you see here? - Steve Parks asked rhetorically.
-Universities, - replied Bob.
-Exactly, universities. It turns out that my company works with all these universities. Lux Animation, as the parent company, owns ID Software, which you gentlemen might be familiar with," he said, nodding. "We also own Autodesk, with different programs donated for practical teaching, such as AutoCAD, Pixar Studios, and the Engine, among other secondary products reserved for these universities. We have contracts with all of them, maintaining good relationships and listening to suggestions. For instance, if educational software comes into our hands, it's not difficult to approach these esteemed universities that have agreements with at least 120 colleges and universities. I wonder, what benefit would a company selling educational software derive from this relationship? - asked Steve Parks.
Principio del formulario
Even the absent-minded Michael Morhaime, Allen Adham, and Frank Pearce understood the significance of this negotiation opening.
-I see, it's undoubtedly irresistible for an educational software company,- said Bob Davidson.
He had it, and Steve Parks knew he just needed to push the right buttons.
-That's right, universities are a field that opens up possibilities, not just for sales, but also for feedback. But business is moving fast, with more people recognizing the importance of technology every day, - said Steve Parks.
Bob Davidson, recovering from that time bomb, remarked, "There's no doubt that Mr. Parks is knowledgeable on the subject."
-I am. Here's my offer: $7 million, a percentage of the profits from the games developed during their time in the company, and a recommendation to universities on the front list. If they negotiate in December, they could gain a good market share, - said Steve Parks.
What followed was pure annoyance and protocol. They explained that they would wait for some time and consider the offer, which was discussed in finer detail over the next thirty minutes. As they bid farewell, Steve Parks handed three blank sheets of paper to Michael Morhaime, Allen Adham, and Frank Pearce. It only meant one thing: shared co-presidents. And then he left without further ado.
Richard Boll found himself in a different scenario.
The negotiations, transitioning Raven Software and Parallax Software into sales, were somewhat simpler in the case of Raven. Their alliance with ID Software was a given, as they were hoping to partner with a major computing company. Founded in 1990, they had some conflicts with ID Software, but all they wanted was money, at least $8 million, which was negotiated down to $5.4 million, along with a juicy contract to become the director of the company.
They had used the basic engines of Doom for Shadow Caster and Heretic. With an expanding library of innovative games, they were ambitious and possessed a certain talent for video games. Parallax was still tempted, but the bidding war was between Interplay Games and ID Software, depending on who could be more convincing.
-It all sounds very nice, but what leverage do we, as Parallax Software, have if ID Software wants to push us aside? We have a healthy relationship with Interplay, and their proposals are not formidable at all, - said Mike Kulas, founder of Parallax Software.
Mike Kulas, along with Matt Toschlog, had founded a company. Both were Car and Driver programmers and had some success in the market.
-ID Software has broader concerns, with demands, but I do not doubt that Interplay demands quality for their constant work. Although it may not seem like it, our tentacles are massive, and our designs are prosperous. We receive offers for purchases or even mergers daily. You have programming talent and have worked on certain games that are frankly incredible. We propose opening an ID Software branch here in Illinois, with you as members of the core team. Success lies in trimming the game portfolio, releasing good games without focusing on the red numbers, - said Richard Boll.
-Opening an ID Software branch here in Illinois? Do we know if that's possible? Do they have a plan in place? - said Matt Toschlog, who detested the creation process and the workings of a company, always hindering his creative system with buts and obstacles.
-Our hiring process involves contracting based on the number of projects, acceptable benefits, and financial support. We'll be placing orders for certain games, but you can also work on your director do not doubt mergers daily times for the company. When you see the company's latest game, which will be distributed in November, very few will understand the advancement, - boasted Richard Boll, referring to Tomb Raider.
The contract was clear: creative freedom for games created by the branch, bonuses for games, the technology the company provided - including 3D engines, and 2D engines, along with the latest proposal for a great 3D engine, and the plan to launch a digital game distribution platform (Lux Games), akin to Steam's proprietary gaming platform.
-You would open up the game engines to Parallax, - asked.
-I would open them up to ID Software: Parallax, - said Richard Boll.
The $900,000 for the company was a small price as it was merely the hiring of a team of nine programmers. The investment was beginning, in Parallax and Raven.
-This was told to me by Billy Carson, the creator and pioneer of ID Software, like many companies. What is the most important thing about video games? What makes people pay to play them? Why will people be crazy about video games in the next twenty years? There's only one answer: because it's fun! If you want to make games at ID Software, you must know that. What makes a video game fun? - said Alexa Riley, silencing the voices. The world of video games was beginning to take shape.
The world was beginning to move, and another company working on 3D creation. Is it perhaps a monopoly?
...
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