Interplay Founder Fargo Out at Game Maker
By ANDREW SIMONS
Industry sources say Brian Fargo has stepped down as chief executive of Irvine video game maker Interplay Entertainment Corp., the company he founded in 1983.
Fargo has been serving as an Interplay consultant for the past several months after French game maker Titus Interactive SA took a majority stake in the company and brought in European advisory firm Europlay 1 to guide Interplay through a restructuring, sources said.
Interplay, a publicly traded company, is expected to soon make an announcement about Fargo. His name has been noticeably absent from recent Interplay releases, with quotes instead being attributed to Herve Caen, Interplay’s president and former Titus Interactive chief executive.
Fargo “worked really hard on Interplay, but he’s ready to do something else,” said a game industry executive who knows Fargo and asked not to be named. “He was able to leave with a good financial nest egg.”
Fargo has other plans in the works, sources said, though details weren’t readily available. Fargo reportedly is relieved to be free from Interplay, which has struggled in the past couple of years.
Things have been particularly rough for Interplay since the spring, when Chicago-based LaSalle Business Credit Inc. ended its credit agreement with the company.
Fargo and his management team put Interplay on the selling block in July. Fargo reportedly had a buyer on the hook, but in September,on the day of the terrorist attacks,Interplay said that talks to sell itself had failed. At that time, Interplay said it had retained Europlay to help it restructure.
Last month, the company registered to sell 16.7 million shares that it likely will use for future fundraising. But with Interplay’s stock at about 50 cents last week, the likelihood that it could raise a significant amount of capital is slim. Interplay, which counts yearly sales of about $48 million and $23 million in debt as of Sept. 30, could have a tough time getting credit without guarantees from Titus.
Fargo made Interplay into one of the top personal computer game makers with titles such as the popular “Baldur’s Gate” series. But as money in the computer game industry started to go to consoles such as Sony Corp.’s PlayStation and the GameCube by Nintendo Co., Interplay had to change gears.
Fargo oversaw Interplay’s 1995 acquisition of Laguna Beach’s Shiny Entertainment Inc., a maker of popular console games such as “Earthwork Jim,” based on an earthworm armed with a plasma blaster. The deal, estimated by industry analysts to be worth about $7 million, made Interplay a major player in both markets, almost overnight.
But bigger competitors such as Redwood City-based Electronic Arts Inc. and Santa Monica-based Activision Inc. also made their own acquisitions and were able to wrest licenses to better titles. One of the most pressing questions facing Interplay going into 2002 is whether the company will lose licenses to game titles considered vital to its future.
The company has a lot riding on its license with Warner Bros. to make games based on the movie “The Matrix.” That pact led to an exclusive deal with Microsoft Corp. in May to produce the title for Microsoft’s Xbox game console.
Some game industry watchers have questioned whether Interplay is up to the task of creating a “Matrix” game. Big titles generally cost $5 million to $10 million to make. Interplay’s advance from Microsoft helps, but the company counted just $2.2 million in cash as of Sept. 30.
“They’ve built some good games,” said Miguel Irabarren, an analyst who follows Interplay for Wedbush Morgan Securities in Los Angeles. “But they’ve got some problems.”
