Microprose Software

For information on the MicroProse brand and its history, see MicroProse.

MicroProse Software, Inc.^[1]

Fate	Friendly takeover
Successor	Infogrames
Founded	1982
Defunct	2001
Headquarters	United States
Key people	Bill Stealey (cofounder) Sid Meier (cofounder)
Products	Pirates Silent Service Civilization X-COM series
Parent	Hasbro Interactive

MicroProse's former headquarters at 180 Lakefront Drive in Hunt Valley, Maryland

MicroProse Software, Inc. was a North American video game publisher and developer, founded in 1982 by Wild Bill Stealey and Sid Meier. Known for publishing the majority of Meier's hit computer games, the company ceased operations in 2001 when the parent company Hasbro Interactive was acquired and merged into Infogrames.

Origin

In the 1980s, MicroProse was primarily known as a publisher of flight and military simulation titles for 8-bit home computers such as the Commodore 64, Apple II, and Atari 8-bit family, with titles such as Spitfire Ace and Hellcat Ace. It also published a few strategy games at the time.

As industry changed over to 16-bit and 32-bit CPUs in late 1980s, MicroProse started supporting IBM PC compatibles and 68000-based machines like the Amiga and Atari ST. MicroProse also started a UK branch to cross-publish titles in Europe, and to import some European titles to be published in the US.

In 1990 and 1991 MicroProse released the blockbusters Railroad Tycoon and Civilization, by Sid Meier, on multiple platforms. They quickly became two of the best-selling strategy games of all time and spawned multiple sequels.

MicroProse also released Geoff Crammond's Formula One Grand Prix to adulation in 1991. The Amiga and Atari ST versions were released first, and the DOS version followed in early 1992. The game was considered the best Formula One sim to date.

In 1992, MicroProse acquired Leeds-based flight simulation developer Vektor Grafix,^[2] who had already developed titles for them such as B-17, turning it into a satellite development studio.

Diversification attempt

MicroProse, in an attempt to diversify without changing their name, created two labels, MicroStyle in the UK, and MicroPlay in the US. This label released games like Rick Dangerous 2 (adventure), Stunt Car Racer (arcade racing) and Xenophobe (action/arcade).

In early 1990s, MicroProse, in an attempt to diversify beyond its niche roots as a flight sim and military sim company, decided to create an arcade game division, as well as invested a large sum of money to create an adventure game engine with which it could produce several games. However, the arcade division was canceled after making only two games: F-15 Strike Eagle The Arcade Game, and B.O.T.S.S. (a giant fighting robot game). Both of which featured high-end (for its time) 3D graphics, and failed to become popular as it was too different from existing machines. The adventure game engine was finished, but only three games (Rex Nebular, Return of the Phantom and Dragonsphere) were published before it was shelved and sold off to Sanctuary Woods.

In the mid-1990s insufficient financial resources prevented MicroProse from developing games for other game platforms such as PlayStation and Nintendo 64, therefore MicroProse remained concentrated on the PC game market.^[3]

Under Spectrum Holobyte

In 1993, MicroProse was acquired by Spectrum Holobyte, another game company. Founder Bill Stealey was good friends with Spectrum HoloByte president Gilman Louie, and convinced Louie to help MicroProse as Stealey was afraid that some bank would not understand the company culture. That same year, the UK office of MicroProse closed two satellite offices in northern England, and disposed of over forty staff at its Chipping Sodbury head office.

In 1994, Bill Stealey departed MicroProse. Spectrum HoloByte agreed to buy out his shares. Bill Stealey went on to found Interactive Magic, another simulation software company.

Despite cuts, president Gilman Louie managed to line up several big name licenses, including Top Gun, Magic: The Gathering, Star Trek: The Next Generation, and later MechWarrior (part of the Battletech universe). Also, the UK import UFO: Enemy Unknown, renamed as X-COM: UFO Defense, proved to be an unanticipated hit in 1994.

Spectrum HoloByte, however, was in trouble. It was trying to get Falcon 4.0 out the door ever since it pushed out Falcon 3.0 in 1991, and it had been delayed for many years.

In 1996, Spectrum HoloByte / MicroProse bought out Simtex, developer of Master of Orion and Master of Magic, among other MicroProse bestsellers. Simtex became MicroProse Texas, based in Austin, Texas. They had several games in the pipeline.

Both MicroProse and Spectrum HoloByte continued as separate brands until 1996. In 1996, Spectrum HoloByte, to reduce costs, started cutting a majority of the MicroProse staff.

Soon after it consolidated all of its titles under the MicroProse brand (essentially renaming itself MicroProse), Sid Meier and Jeff Briggs departed the company, forming a new one called Firaxis Games.

In a 2004 interview Jeff Brigs commented his decision to leave MicroProse:

""Civ II had just come out and MicroProse had been purchased by Spectrum Holobyte. [...] Things had gotten pretty bad. By that time I was director of product development and they were asking me to do things and tell people things that I just didn't like. I decided that I could do a lot better job running the company than they could, so I left."^[4]

Sid Meier and Jeff Briggs managed to convince Brian Reynolds, who designed Civilization II, to leave MicroProse and join Firaxis as well.^[5] A core group of disillusioned artists, designers and programmers left MicroProse UK to join Psygnosis, which opened an office in Stroud, UK, specifically to attract ex-MicroProse employees.

GT Interactive's $250 million cancelled offer

On October 5, 1997, GT Interactive announced that it had signed a definitive agreement to acquire MicroProse for $250 million in stock, the deal had even been unanimously approved by the Board of Directors of both companies. After the announcement MicroProse's stock price reached $7 a share. GT Interactive expected the deal to be completed by the end of that year.^[6][7]

But on December 5 the acquisition was cancelled, according to both CEOs "the time is simply not right" for the deal. MicroProse's stock plummeted to just $2.31 after the announcement of the deal's cancellation.^[8][9]

Legal dispute over the Civilization brand

In November 1997 MicroProse was sued by both Avalon Hill (who had the US publishing rights to the name Civilization)^[10] and Activision for copyright infringement. MicroProse responded by buying Hartland Trefoil, which had used the Civilization name in early game products^{[citation needed]} and then sued Avalon Hill and Activision for trademark infringement and unfair business practices as a result of Activision's decision to develop and publish Civilization computer games.^[11] Because Hasbro was negotiating the acquisition of both Avalon Hill and MicroProse, the lawsuits were settled in July 1998. Under the terms of the settlement MicroProse became the sole owner of the rights of the name Civilization and Activision acquired a license to publish a Civilization computer game which was later called Civilization: Call to Power.^[10][12]

Under Hasbro Interactive

In preparation for its sale, in June 1998, MicroProse closed down its studio in Austin, Texas. As a result of the closure, 35 employees were laid off.^[13]

On August 14, 1998, Hasbro issued a cash tender offer to purchase all MicroProse's shares for $6 each.^[14] The deal was completed on September 14, Hasbro managed to buy 91% of MicroProse's shares and announded that MicroProse had become a wholly owned subsidiary of Hasbro.^[15] The remaining shares would also be acquired for $6 in cash.

MicroProse was acquired for $70 million in cash by Hasbro and then merged with Hasbro Interactive.^[16] At that time MicroProse's staff cost $20 million a year.^[17]

At the time of Hasbro's acquisition, MicroProse had 343 employees, including 135 at Alameda, CA. Besides the development studio in Alameda, MicroProse had three other studios: Hunt Valley, MD; Chapel Hill, NC; and Chipping Sodbury, England.^[3]

In 1998, MicroProse finally managed to publish Falcon 4.0, before the Christmas shopping season. However, the initial release was plagued with bugs and the simulation of a real F-16 is so authentic — and thus complicated — that it intimidated most gamers, resulting in disappointing sales.

MicroProse's demise

MicroProse's demise began in December 1999, when Hasbro Interactive closed down former MicroProse studios in Alameda, California and Chapel Hill, North Carolina.^[18][19] (Alameda, CA was headquarters for Spectrum HoloByte, and Chapel Hill, NC was the location of the flight simulation team.)

In January 2001, after French game publisher Infogrames Entertainment SA (IESA) took over Hasbro Interactive for $100 million,^[20] MicroProse ceased to exist. Its latest title in US, European Air War, was reissued with Infogrames logo instead of MicroProse logo. Rollercoaster Tycoon, released in 1999, was reissued with the Infogrames logo at this time as well.

Infogrames shut down the former MicroProse studio in Chipping Sodbury, United Kingdom in September 2002.^[21]

The last new game released with the MicroProse name was the UK version of Geoff Crammond's Grand Prix 4, in late 2002. In the 1990s MicroProse had a development studio in Chipping Sodbury UK, which commissioned many games from smaller UK developers, including Grand Prix and Transport Tycoon. The MicroProse name was preserved on GP4 in the UK due to the respect it held amongst fans of racing simulation games.

IESA intermittently used the Atari name as a brand name for selected titles before officially changing the U.S. subsidiary's name to Atari, Inc. in 2003.^[22] In November 2003, Atari Inc. closed the last former MicroProse development studio in Hunt Valley, Maryland,^[23] which was MicroProse's original location. However, several game developers now exist in the area, including Firaxis Games and BreakAway Games, who all owe their origin to MicroProse.

Legacy of MicroProse

Sid Meier, who now works at Firaxis Games, eventually got the rights of most of his games back under his control from Atari Inc.

Railroad Tycoon series rights was sold to PopTop software, who developed 2 and 3. Eventually, Poptop was acquired by Take Two Interactive, which later also acquired Firaxis as well, thus returning the rights to the series to Sid Meier. With this, he made a new game in the series, known as Sid Meier's Railroads!. Master of Orion 3 was developed by QuickSilver Software, and released under the Infogrames label, but met horrendous reviews.

Falcon 4 rights was sold to GraphSim who developed Falcon 4: Allied Forces. There are persistent rumors about Falcon 5, but so far nothing concrete has emerged.

Microprose Systems was founded to revive the name brand.

Financial performance

The tables below contain selected financial data extracted from MicroProse's Annual Report of 1998 and 1997.^[1][24] Fiscal Year ends on March 31.

MicroProse's Revenue (in millions )

Year	1993	1994	1995	1996	1997	1998
Revenue[25][26]	$13.6	$40.9	$84.3	$59.6	$100.3	$60.0
Variation		200%	106%	-29%	68%	-40%

As it can be seen from the table above, MicroProse's revenue performance varied according to game releases. The release in February 1996 of Civilization II is one of the factor that weighed positively on 1997's financial result, that year revenues rose 68% to $100 million. MicroProse recognized that deficiency, the Annual Report of 1998^[27] informed:

"The Company depends on both the timely introduction of successful new products or sequels to existing products to replace declining revenue from older products."

And continued:

"If for any reason revenue from new products or other activities fails to replace declining revenue from existing products, or if revenue from back-catalog titles declines significantly, the Company's operating results may be adversely affected."

That's why MicroProse's revenue varied so wildly, and in order to grow stably an ever increasing number of major game titles would have to be released in a timely basis and just maintaining revenues on the level of the previous year was a challenge.

MicroProse's Net Income/Loss (in millions)

Year	1993	1994	1995	1996	1997	1998
Net Income (Loss)[26][28]	$-4.0	$-58.4	$-18.0	$-39.8	$7.9	$-33.1

MicroProse lost $145 million between the years 1993 and 1998. The incapacity of MicroProse to operate profitably explains why the company could not stay as an independent one for much longer and sought acquisition from GT Interactive and Hasbro Interactive. In addition, MicroProse's over dependence on new releases for both profits and revenues helps explain why MicroProse's market value went from $250 million in October 1997 to just $70 million 10 months later.

In the first quarter of 1999, MicroProse posted revenues of $12.1 million and net losses of $7.8 million.^[29]

Selected games

Main article: List of MicroProse games

• NATO Commander (1984)
• Solo Flight (1985)
• Silent Service (1985)
• F-15 Strike Eagle (1985)
• Gunship (1986)
• Airborne Ranger (1987)
• Pirates (1987)
• F-19 Stealth Fighter (1987)
• Red Storm Rising (1988–1990, on various hardware platforms)
• F-15 Strike Eagle II (1989)
• M1 Tank Platoon (1989)
• Railroad Tycoon (1990)
• Civilization (1991)
• Formula One Grand Prix a.k.a. World Circuit (1991)
• Gunship 2000 (1991)
• Midwinter II (1991)
• Darklands (1992)
• B-17 Flying Fortress (1992)
• BloodNet (1993)
• Master Of Orion (1993)
• Master of Magic (1994)
• Colonization (1994)
• X-COM: UFO Defense (1994) in some countries the game was known as UFO: Enemy Unknown
• X-COM: Terror from the Deep (1995) Also known as XCOM2
• Transport Tycoon (1995) followed by Transport Tycoon Deluxe (1996)
• Master of Orion II (1996)
• Falcon 4.0 (1998)
• MechWarrior 3 (1999)
• Star Trek: Birth of the Federation (1999)

References

1. ^ ^{a b} SEC Info - Microprose Inc/DE - 10-K - For 3/31/97
2. ^ "MicroProse buys Vektor Grafix" article from Computer Business Review Online
3. ^ ^{a b} "Hasbro Buying Alameda's MicroProse" from San Francisco Chronicle
4. ^ http://www.gamedaily.com/articles/features/gamedaily-interview-firaxis-games-jeff-briggs/67119/?biz=1
5. ^ http://www.forbes.com/1997/07/25/sid.html
6. ^ "GT Interactive to Expand as World's Fastest Growing Interactive Entertainment Company Through Acquisition of MicroProse" from BNET Research Center
7. ^ "$250 Million Stock Deal for Microprose" from The New York Times
8. ^ "MicroProse and GT Interactive Call Off Merger" from CBR Online
9. ^ "Company News; Microprose And Gt Interactive End Merger Talks" from The New York Times
10. ^ ^{a b} The Fall of Avalon Hill from Academic Gaming Review
11. ^ http://www.mimgames.com/tga/tgg/misc/microprose.shtml
12. ^ MICROPROSE INC/DE Quarterly Report (10-Q) ITEM 1. LEGAL PROCEEDINGS
13. ^ Microprose Inc/DE · 10-Q · For 6/30/98 from SEC Info
14. ^ Hasbro MicroProse acquisition information (SC 14D1) from SEC Info (secinfo.com)
15. ^ Hasbro MicroProse acquisition information (SC 14D1/A) from SEC Info
16. ^ Hasbro quarterly report for 9/27/98 from SEC Info
17. ^ Hasbro Interactive study from Tuck School of Business at Dartmouth (PDF)
18. ^ "Hasbro to Cut 20% of Its Jobs and Take $97 Million Charge" from The New York Times
19. ^ "Hasbro Restructures" from Gamasutra NewsWire (December 7, 1999)
20. ^ "Company News; Hasbro Completes Sale of Interactive Business" from The New York Times
21. ^ "Infogrames closes UK MicroProse studio" from GameSpot
22. ^ "Atari lives again" from BBC News
23. ^ Atari closes former MicroProse studio from GamesIndustry.biz
24. ^ SEC Info - Microprose Inc/DE - 10-K - For 3/31/98
25. ^ SEC Info - Microprose Inc/DE - 10-K - For 3/31/97, On 6/30/97 - Table in Document 1 of 5 - 10-K - Annual Report
26. ^ ^{a b} Microprose Inc/DE · 10-K · For 3/31/98, On 6/29/98 from SEC Info
27. ^ SEC Info - Microprose Inc/DE - 10-K - For 3/31/98
28. ^ SEC Info - Microprose Inc/DE - 10-K - For 3/31/97, On 6/30/97 - Table in Document 1 of 5 - 10-K - Annual Report
29. ^ SEC Info - Microprose Inc/DE - 10-Q - For 6/30/98

External links

• MicroProse company profile from MobyGames