ZeniMax Media raised $105 million to acquire id Software, according to a document filed today with the Securities and Exchange Commission.
Id Software, which created the Doom and Quake game franchises, stunned the game industry two weeks ago when it announced its acquisition by ZeniMax, which publishes the Elder Scrolls series of role-playing games developed by its Bethesda Softworks studio. The sale surprised many because id Software, based in Mesquite, Texas, had rebuffed numerous buyout offers over the years, preferring to maintain its independence.
Because both companies were privately held, neither was obligated to divulge the price.
The filing with the SEC suggests that the price may have been $105 million. That's what ZeniMax issued in the form of a "convertible note," so called because the holder of that bond can convert it into either cash or shares in the issuing company. It's unclear from the filing if ZeniMax used the entire amount to pay for id or whether the deal called for additional payment.
ZeniMax and id Software declined to comment on the filing.
ZeniMax, based in Rockville, Md., has deep pockets backing the company. In 2007 it snagged a $300-million investment from Providence Equity Partners, and its board of directors include retired baseball player Cal Ripken Jr., CBS Corp. President Leslie Moonves and Hollywood producer Jerry Bruckheimer, who in May announced his entry into the video game business.
Updated 6:42 pm to reflect the companies' denial for comment.
-- Alex Pham and Ben Fritz
Follow or random thoughts on games, entertainment and technology on Twitter@AlexPhamand @BenFritz.
Midway's latest hit, Mortal Kombat vs. DC Universe. Credit: Midway Games.
A Bankruptcy Court judge on Wednesday approved the sale of most of Midway Games' assets to Warner Bros. for $33 million in cash, removing the last big obstacle for the movie studio to acquire the rights to Mortal Kombat, Spy Hunter, Joust and a small library of classic game franchises. Warner will also gain two development studios in Seattle and Chicago.
The Chicago game publisher filed for bankruptcy protection this year after it was unable to satisfy creditors. Last year, majority owner and media mogul Sumner Redstone sold his 87% to Mark E. Thomas, a mysterious Massachusetts investor with no experience in video games, for a mere $100,000. As a result, the financially troubled Redstone was able to claim a $700-million tax loss in 2008.
It turned out to be a sweet deal for Thomas, who received $5 million from the sale to Warner Bros., according to the Chicago Tribune.
Warner Bros. was the only bidder to emerge last month in the sale of Midway's assets. Warner has not said what it plans to do with Midway. One can only surmise that there will be more games similar to Mortal Kombat vs. DC Universe, which sold more than 2 million units.
All over but the shoutin' for Midway sale? Credit: Togoodtobe4gotton via Flckr.
Times up! The deadline for submitting bids to buy Midway Games passed Wednesday afternoon with just one offer -- a $33-million deal from Warner Bros. to purchase most of the bankrupt Chicago company's assets.
After Warner Bros. lobbed its offer in May, Midway had hoped to spark a bidding war that would jack up the price. A Chicago investment group and several game publishers had been kicking the tires at Midway, according to a source familiar with the discussions. But none pulled the trigger on a deal.
"No other bids came in, so there's not going to be an auction," confirmed Midway's spokesman, Geoff Mogilner.
Before the deal goes through, the Delaware court overseeing Midway's bankruptcy will have to resolve complaints by several creditors about the acquisition process. One of those is producer Larry Kasanoff's Threshold Entertainment, which produced two previous "Mortal Kombat" films and claims it has exclusive big-screen and TV rights to the series. Also objecting to the sales process is Tigon Studios, a production company controlled by Vin Diesel, which claims it is owed $200,000 for the star's work on the recently released game "Wheelman."
The next court hearing to address those and other issues will be July 1. As soon as they are resolved and the bankruptcy court officially approves Warner Bros.' bid, the acquisition will close 10 days later, Mogilner said.
Warner Bros. declined to comment. An acquisition would buttress Warner's growing game portfolio, according to a report today in the Times.
The offer includes most, though not all, of Midway's assets, including the company's Mortal Kombat, Spy Hunter, Joust and Wheelman franchises. It also includes two of Midway's four development studios -- one in Chicago and another in Seattle. It remains unclear what will happen to the company's studio in Newcastle, U.K., which makes the Wheelman games, and its studio in San Diego, which is developing a wrestling game based on a license with TNA Entertainment. Those assets could potentially be sold to another buyer.
Wolfenstein, a shooter developed by id Software. Credit: id Software.
Id Software, the creator of Doom, Wolfenstein 3D and Quake games, has been sold to ZeniMax Media for an undisclosed amount. ZeniMax's Bethesda Softworks studio created the popular Elder Scrolls role playing series of games.
In a statement released this morning, ZeniMax said the development process at id will remain untouched:
John Carmack. Credit: id Software.
id Software will continue to operate as a studio under the direction of its founder, John Carmack. No changes will be made in the operations of id Software in the development of its games. All the principals at id Software have signed long-term employment contracts, assuring they will continue in their roles developing games at the studio.
Founded in 1999, ZeniMax in 2004 bought the Fallout franchise from Interplay Entertainment. It then created Fallout 3, an action role-playing game that turned out to be one of the most critically successful games of 2008 with a Metacritic score of 93%. Any score above 90% is considered outstanding.
Other terms of the deal, which closed Tuesday, also were not disclosed. Both companies were privately held.
The seeds of the transaction were planted in Los Angeles at last year's Electronic Entertainment Expo, when...
In 1980, a 27-year-old Shigeru Miyamotodoodled a caricature on a sheet of paper. It had overalls, an oversize head and a handlebar mustache. The character eventually became Mario, one of the most recognizable figures in video games. You can watch Miyamoto demonstrate how to draw his famous character in the video above.
“I wanted a character I could put in all my video games,” Miyamoto said in an interview today at E3. He cited Osamu Tezuka, the creator of Astro Boy and regarded by some as the founding father of Japanese anime, as a source of inspiration. Osamu had a set of key characters that would appear in all of his comics, he said.
Miyamoto also drew on Popeye the Sailor cartoons, featuring the bumbling but lovable sailor, Olive Oyl as the female figure and Bluto as Popeye’s nemesis. With that in mind, Miyamoto simultaneously created Mario, Princess Peach and Donkey Kong as his core cast of characters.
But it was Mario who rose to stardom. His mug, which has remained largely unchanged in the 29 years since Miyamoto created him, has graced the covers of hundreds of Nintendo games that collectively have sold hundreds of millions of copies.
Miyamoto explained the origins of Mario’s appearance, which was not born out of market research or informed by art school theories. Instead, Mario’s look was driven by a combination of technology and Miyamoto’s penchant for comics.
In 1980, computer graphics were crude. The pixels and the palettes of what was known as 8-bit color graphics severely limited what artists and programmers could render on a screen. To make characters recognizable, developers opted for exaggerated features and bright, contrasting colors. Mario was no exception.
Miyamoto gave Mario overalls with a color different from his shirt so that players could better distinguish when he was moving his arms while running. With limited processing power, Mario’s hair could not move in a realistic manner. So he got a hat. And because his eyes and nose were so big, there was little room left to draw a mouth, chin and neck. Miyamoto solved that by plastering on a bushy mustache. Mario’s squat physique allowed him to be more easily spotted on the screen. And he got big white gloves that helped exaggerate his movements.
The character was first known as Jumpman in the original Donkey Kong arcade game that came out in 1981, but Miyamoto personally referred to him as “Mr. Videoman.” A year later, he reappeared in Donkey Kong Jr. as Mario.
Miyamoto dismissed the legend that the name came from Nintendo’s landlord in Redmond, Wash., where the company’s U.S. headquarters are. “Mario was named after the manager of our warehouse in New York,” Miyamoto said. “He had a mustache too.”
We figured that, because not everybody can get in, why not share the fun? Here are several cool panoramic views of who and what's at E3 this year. Photos
Also, check out what the CyberGuy is finding at E3.
You have been warned. Credit: Alex Pham / Los Angeles Times.
Don't even think about it.
The security guards at E3 are keeping eagle eyes on E3 badges to make sure no one sneaks in. One guard tried to snatch infiltrators by making sure the name on the badge matches with the gender of the person wearing it. That guard, who declined to reveal his name, said he caught a man wearing a badge for someone named "Jenny." It didn't match the name on his drivers license.
Others have tried to get in by making color photocopies of legitimate badges. The show confiscated a stack of fake paper badges more than an inch thick, the guard said.
In past years, it was a teenage boy's rite of passage to sneak into E3, the world's largest industry-only video-game event.
They contributed to some playful pranks and some not-so-fun mayhem. One year, the legend goes, an interloper wreaked havoc by shearing power cords throughout the convention center.
Mostly, though, they clogged the booths and made it hard for everyone to see the games and navigate the sardine-packed floor.
This year, the Entertainment Software Assn, the group that puts on E3, said it would police the list of attendees to keep the show at a manageable size. More than 35,000 people registered for the show, down from more than 65,000 at the show's peak in 2005.
"We pre-qualified every individual to make sure they have a connection to the industry," said Michael Gallagher, president of the ESA. "We have to fight to keep the numbers down."
Brutal Legend is on display as an Electronic Arts offering at the E3 this week. Credit: Jonathan Alcorn / Bloomberg News
On the show floor at E3 today, Electronic Arts' Brutal Legend is one of the hottest and most heavily promoted games.
Behind the scenes, it's also the source of the day's biggest drama as Activision Blizzard, the country's biggest video-game publisher, has filed a $15-million lawsuit against developer Double Fine Productions and is attempting to prevent competitor Electronic Arts from releasing the game this fall.
Brutal Legend, which stars Jack Black as a heavy metal roadie fighting against mystical demons, was originally set to be released by Vivendi Games. Last year, that company merged with Activision, whose executives took charge of the new entity known as Activision Blizzard.
It appeared at the time that Brutal Legend was one of numerous games previously in production at Vivendi that Activision Blizzard was dropping when it wasn't on a short list of titles the new company announced it was picking up.
As a result, few were surprised at reports that developer Double Fine was negotiating with other publishers, or when Electronic Arts announced last December that it would release the game this fall.
But in its lawsuit, filed Wednesday in California Superior Court in Santa Monica, Activision claims it was caught unaware. The complaint states that the two companies had been in negotiations over the future of Brutal Legend after Double Fine claimed in February 2008 that it would need an additional $7.6 million on top of the original $15.4-million production budget to complete the game. After learning of the deal with EA, Activision sent Double Fine a cease-and-desist letter.
The complaint claims that under Vivendi's deal with Double Fine, which stayed in effect after the merger, the developer was not allowed to seek a new publisher unless the original agreement was terminated by Activision Blizzard. It also claims that neither Double Fine nor EA have paid back Activision Blizzard any of the game's original production budget.
"Double Fine intends to unilaterally transfer Activision's $15-million investment to one of Activision's chief competitors, without anyone paying Activision a nickel in return," the lawsuit states.
Executives at Double Fine have yet to provide their own interpretation of the events of the last year. However, it appears that the developer, which has been represented in its negotiations with EA by the Creative Artists Agency, believes Activision Blizzard gave up its rights to Brutal Legend after the merger closed last summer and it didn't affirmatively decide to publish the game.
Tim Schafer, chief executive of Double Fine and creative director of Brutal Legend, released a brief sardonic statement today: "Hey, if Activision liked it, they should have put a ring on it. Oh great, now Beyonce is going to sue me too."
About 13 people gathered outside the Convention Center in what appears to be a marketing stunt. Credit: Tony Pierce / Los Angeles Times
Update June 9, 3:14 pm: Electronic Arts Spokeswoman Tammy Schachter has confirmed that the "protest" was a publicity stunt. But that hasn't stopped some journalists, including ourselves, from thinking it was real. After the recent ruckus over EA's Godfather 2 gag, the score appears to be rogue viral marketing 2, game journalists 0.
It now appears that the protest against the Electronic Arts game "Dante's Inferno" that we posted about Wednesday was actually a publicity stunt arranged by EA itself. A brochure handed out by the protesters -- or is that actors? -- points to a website, wearesavedgroup.org, which appears designed to promote "Dante's Inferno" as much as bash it. There's a video full of game footage, a link to the trailer, and a link to the official Dante's site.
The site was registered on Monday, June 1, through Domains By Proxy, a company that lets people set up websites without disclosing their identity.
Michael Gallagher, left, president of the Entertainment Software Assn., and Los Angeles Mayor Antonio Villaraigosa. Credit: Kirk McKoy / Los Angeles Times.
This year, the elves returned to the City of Angels. And they brought money with them -- more than $15 million in direct spending on taxi rides, hotel rooms, wine and sushi, among other things.
The Electronic Entertainment Expo, which was substantially scaled back in 2007 and 2008, came roaring back to its former glory this week at the Los Angeles Convention Center, attracting more than 35,000 visitors to the video game confab. For Los Angeles, E3 is the biggest convention so far this year, according to Mayor Antonio Villaraigosa, who welcomed the conventioneers Tuesday.
Some Angelenos may remember E3 for its over-the-top spectacles: soldiers rappelling from U.S. Army helicopters, models strutting in thongs and 6-inch heels, skateboarders sailing off half-pipes and celebrity-soaked parties that were more like three-ring circuses.
But the merriment came to a halt in 2007 when game companies decided enough was enough. The show, which hit peak attendance in 2005 with more than 65,000 attendees, was toned down that year to a stately affair in Santa Monica with an invite-only guest list of about 4,000. It returned to the L.A. Convention Center last July but was so low-key that some in the industry lamented that it looked like a pipe-fitters convention.
This year, the Entertainment Software Assn., the industry-funded group that puts on E3, screened the event's registration to keep out the "fanboys" -- people who like to play games but don't work in the game industry. The group vetted booths for their "appropriateness." And companies, sobered by the bad economy, willingly spent less money on parties. Some, including Take-Two Interactive Software, which publishes the popular Grand Theft Auto game franchise, went without a booth altogether and opted for a more practical meeting room above the show floor.
The result?
"On a scale of 1 to 10, I'd give it an 8.5," said Don Mattrick, senior vice president of interactive entertainment at Microsoft, which makes the Xbox 360 game console. "But I'm a strict marker."
Mattrick and other attendees said the show this year struck a good balance between hype and reality.
"This year, the world’s focus will rightfully be on E3 in Los Angeles," said Mike Gallagher, president of the ESA. "Really, what we’ve done is put together a show that is much more reflective of the high-octane high energy, innovation and excitement that is the video game industry."
Depending on the model, your device features either a hard drive or flash drive that allows you to read and write files to it just like an external drive.
More E3 photos
RSS: Subscribe to this Blog
LOL, Fred. :-) Let me clarify....Assumin...
My company sells Faculty eBook at the do...
Thatll be 99 cents to answer that questi...