Longtime Orange County game developer Brian Fargo has claimed a victory for workers at Interplay Entertainment Corp., the company he founded in 1983 and watched unravel after selling to France’s Titus Interactive SA in 2001.
Fargo recently won $3.7 million in back pay, interest and fees for ex-workers and suppliers after a Santa Ana bankruptcy judge ruled against Titus’ Herve Caen, the French chief executive who took over Interplay.
“These people hadn’t been paid for three years and everyone had just given up,” Fargo said. “It was kind of nice that I could help them. I had guys who didn’t even know they were owed money getting checks.”
A group of about 50 ex-Interplay workers and vendors were owed about $400,000 in back pay, Fargo said.
He filed what’s called an involuntary bankruptcy claim that effectively “stopped the company dead in its tracks and forced it to pay,” he said.
The average payout was about $10,000 for each worker. Some got as much as $60,000, Fargo said. The deal included 10% interest on the unpaid funds, payment for unused vacation time and various penalty fees.
Fargo said he got a “six-figure cut” from the workers and vendors who filed the claim.
The win is a bit of consolation for Interplay workers and for Fargo, who was forced out in 2002 and started a new game development company, Newport Beach’s InXile Entertainment Corp.,it’s name a slight jab at Titus.
Interplay saw early success making PC games and video game consoles, which hook up to TVs. It had more than 200 workers and about $100 million in sales a year at its height.
Things turned sour for Interplay after the tech bubble burst.
The company went public in 1998 in a drab offering, raising less than half of what it expected.
“Interplay was already struggling,” Fargo said. “We had incurred a lot of debt as we tried to ramp up our game releases. When we went public, the market went south.”
The company, once a top 10 game maker, was edged out by bigger game publishers, and, later, by those making multiplayer role playing games played over the Internet.
As the 1990s came to a close, Fargo thought it was time to get out.
Enter Titus,then the No. 2 game developer and distributor in Europe. It bought a controlling stake in Interplay in 2001.
But the rising costs of producing “epic” video games made it hard for Titus to compete against the likes of Redwood City-based Electronic Arts Inc. and other big names.
Disagreements with Titus’ management led to Fargo’s ouster, shortly after a botched deal to sell the company.
“I brought in a Chinese buyer who was willing to pay more, and that deal ended up not happening because of our French investors,” he said. “Titus was in poor financial shape when I left, as was Interplay.”
During the next three years, Titus drained the company by all accounts.
It ran up huge debts and failed to pay its suppliers, workers and bills.
Interplay was dropped by Nasdaq and traded for pennies on an over the counter exchange.
Workers went unpaid. Many were laid off or quit.
“I was watching the company through the public documents,” Fargo said. “A lot of the workers were laid off, and, from what I could tell, nobody was being paid. It was sad to watch my company get run into the ground.”
The end was near for Interplay.
Its Web site went down quietly, leaving fans confused.
The few workers left were kicked out of the company’s Irvine office because rent wasn’t paid. The doors were shuttered permanently by the state for lack of workers’ compensation insurance. It moved to a smaller office in Irvine, but was later evicted from that one.
In 2005, a French court declared Titus bankrupt.
Titus sold off Interplay’s intellectual property, including licenses and rights to graphics and game titles.
“I felt like it didn’t have to end that way,” Fargo said. “But it wasn’t meant to be.”
Meanwhile, he’s been plugging away at InXile, which has about 50 workers in Newport Beach and about 20 graphic designers in China. About six are from Interplay.
The company is growing steadily with about $10 million in yearly sales.
InXile keeps its eye on console-based games and works on smaller projects for handheld game players.
One is “Purr Pals,” a game for the younger set that involves caring for a virtual kitten.
InXile has picked up the rights to a couple of games Fargo developed at Interplay: “Wasteland,” a 1980s cult classic, and “The Bard’s Tale,” a fantasy role-playing game.
It’s got about five new titles in development.
