Interplay - Keeps on keeping on

[Dhruin]

Gamasutra has news of Interplay's latest financials, which sees them almost out of the red and still keeping an eye on Fallout Online (FOOL):

Said Interplay chairman and CEO Herve Caen, "I am pleased with the progress the company has made, particularly with our debt load, which has improved from $59 million in December 2001 to less than $3 million today. With that difficult period behind us, we are focused on securing funding for development of a Massively Multiplayer Online Game (MMOG) based on the popular Fallout franchise. Along with our strategy of leveraging our existing portfolio of intellectual gaming properties, Fallout Online will play a key role in the future of Interplay."

That said, they've sold almost everything so that last few million and then the capital for FOOL might get harder. Still, the very definition of gaming undead, you can't write them off because if there is one thing Caen has demonstrated, it's a fiendish survival tenacity.
More information.

 

[Lucky Day]

I seriously doubt his $56 million+ in creditors agrees with that statement. Some of those are ex-employees.

If he hasn't declared bankruptcy he still owes them.

I'm sure Brother none could enlighten us some more *waits for this thread grows to 30 posts*

that said the success of Fallout 3 could make FOOL a valuable property.

 

[magerette]

And no one could say that acronym isn't appropriate...

 

[rune_74]

I thought bethesda came out and bought the online rights after getting the rpg rights?

 

[Dhruin]

Bethsoft purchased everything but part of the agreement is a license for IPLY to develop FOOL. If certain conditions aren't meant, the rights revert back to Bethsoft. I'd bet Bethsoft banked on that when agreeing to the contract.

 

[curiously undead]

they have the right to devlop and publish it, or one of the two?

 

[GhanBuriGhan]

...FOOL...

aptly named !

 

[Dhruin]

Both.

B. Interplay wishes to use the Licensed Marks solely in connection with
the development and implementation of a Massively Multiplayer Online Game (as
defined below).

C. Bethesda, as the owner of the Licensed Marks, is willing to grant
Interplay a license strictly limited in duration and scope to use the Licensed
Marks in compliance with the terms and conditions of this Agreement.

...and part of the "sting":

2.3 MMOG DEVELOPMENT. To retain its license rights under this
Agreement, Interplay agrees that (i) full-scale development of its FALLOUT MMOG
will commence within twenty-four (24) months of the Effective Date of this
Agreement (such commencement date defined herein as the "MMOG DEVELOPMENT
COMMENCEMENT DATE") and (ii) by the MMOG Development Commencement Date,
Interplay will have secured financing for the FALLOUT MMOG in an amount no less
than US$30,000,000.00 ("MINIMUM Financing"). In the event that within this
24-month period Interplay has failed to commence full-scale development of its
FALLOUT MMOG or has failed to secure the Minimum Financing, Interplay will
immediately lose and permanently forfeit its license rights under this Agreement
and the license rights automatically shall end, be void and otherwise terminate
on the anniversary date of the second year after the Effective Date and this
Agreement shall no longer remain in effect.

They have 24 months to get $30M in initial funding and get started. There are also other completion requirements.

I think Bethsoft knows this is close to impossible (close -- but never rule Caen out), and then they will get the rights back. The risk is that Fallout 3 is successful enough to open doors for Caen but it would still be hard.

 

[magerette]

It's amazing to me that it takes $30 million to develop a game, but with Interplay's track record you can't fault Bethesda for those conditions. With the present lending climate, it would seem like only a master snake oil salesman could lay hands on that kind of cash, let alone rush directly into "full scale development"---does IPLY even have any employees left for such a thing? If they have to license engines, hire teams, etc. I'd say that FOOL would apply to any potential lender as much as to the title of the game

 

[Alrik Fassbauer]

I often wonder how a company with so many debts can survive that long ? Is it legal to let a company survive that long with so many debts ?

I'm no lawyer, but I thought that a company like this should go bancrupt at one point, from a legal point of view ?

 

[txa1265]

I often wonder how a company with so many debts can survive that long ? Is it legal to let a company survive that long with so many debts ?

It really depends upon the creditors ... if they could get financial backing to reorganize their debt then they could persist. The question is who would provide such backing based on what appears to be a FOOLish business plan.

 

[Dhruin]

Bankruptcy proceedings have been brought against IPLY multiple times - basically each time he has delayed with various tactics and/or then sold off some IP rights to raise some cash as required to stay afloat.

I haven't stayed abreast of it all because it has gone on forever. As an example of tactics, BioWare and IPLY have been in litigation for some time over outstanding royalties. This is a simplification but when IPLY had some cash courtesy of the Fallout sale to Bethsoft, they sent a notice to BioWare saying they would only recognise claims made within a certain very limited time - the idea being BioWare wouldn't have time to act and IPLY would then claim the debt was no longer due.

BioWare has returned to court over these tactics. I have no idea if it will stand up - but you get the idea how IPLY operates.

 

[Brother None]

What Dhruin says is correct, though not as backhanded every time, but Interplay did shrug off a lot of debts due to payment being too slow.

I seriously doubt his $56 million+ in creditors agrees with that statement. Some of those are ex-employees.

Actually, Interplay has only 2.9 million USD left in debt (about 5 million in liabilities).

All ex-employees have been paid. It turned out Bethesda had a bit in the Fallout licensing contract which forced Interplay to pay certain creditors, including the ex-employees. The Forced Bankruptcy litigation probably helped.

Have no doubts about Bethesda's plans, though. With the opening of ZeniMax online division, it should be obvious they fully intend to take over and produce FOOL. Fallout 3 being a hit won't change shit for Herve, because it'll come to late for him to harvest the insane amount of 30 million dollars.

Not saying it's impossible, I'm saying it's more likely Herve cuts and runs, sells the company for anywhere up to 10 million to someone willing to produce FOOL. But even that's unlikely.

Herve's been selling IPs like crazy, for those trying to puzzle out where everything went. Fallout's the most valuable one interplay had left, which is very, very ironic, but he also sold Earthworm Jim, Rednecks Rampage and others.

 

[Alrik Fassbauer]

I sometimes wonder about Stonekeep, because David Pulver once wrote he'd like to have the rights of his story "Thera Awakening" back. And the keeper of the License has always been Interplay.

 

[Brother None]

As far as I know, Interplay has not sold Stonekeep, but I could well be mistaken.

 

[Gorath]

When did the 24 month period start?

 

[Brother None]

When did the 24 month period start?

April 9, 2007. So the deal ends April 2009. Fallout 3's release can be anywhere in late 2008, but I don't expect it too early, so that might end up giving Caen little over half a year after Fallout 3's release. No help there, unless some investors go insane from hype.

 

[chamr]

It's amazing to me that it takes $30 million to develop a game,

That's probably just the start up capital. Rarely do projects like this receive full funding from the get-go. It's usually a milestone/deliverable per payment model. Not knowing much about the sordid details of video game financing, as others have said, $30mil up front does indeed sound like an unattainable goal.

 

[Brother None]

It's an MMO, the overhead can go up to 100 mil, while the overhead of a normal singleplayer game is practically nil.

30 mil up front is unattainable for someone who has absolutely nothing to offer, like Herve Caen. Which is why Bethesda demanded it