Brand Awareness Cuts Both Ways
As video-game developers and publishers merge, what will that mean for smaller companies? "Small guys can win [in this industry]," says Phil Stokes, an entertainment specialist at PricewaterhouseCoopers. "The question is, can they win consistently?"
It's a question that SCi Entertainment, the UK-based publisher that owns the Tomb Raider franchise, has struggled to answer. Its shares fell this year when a takeover rumor proved to be no more than that, and CFO Phil Rogers was tapped to become CEO as the company tries to turn itself around. Analysts claim the company has been too reliant on too few brands; delayed product launches have also posed a problem. But shipping out quality titles at the right time is far from easy. Stores need the games on time, but companies risk alienating consumers if they ship faulty products. California-based Flagship Studios, developer of Hellgate: London, a PC game set in a post-apocalyptic London, learned that the hard way. When the game was released last year it was riddled with bugs. Blogs and Websites teemed with disgruntled players, and their ire grew when a patch intended to fix the problems wiped out players' previous scores. Now some gamers refer to products launched prematurely as "Flagshipped." That's the kind of brand recognition companies could do without. In fact, Flagship is now bankrupt. But one Flagship founder is already back in business, as head of the new Runic Games, providing a neat parallel between computer games and reality: sometimes you can die a horrible death and get right back up again. — T.B.
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