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Role Playing (Games) Businesses

Bioware/Pandemic To Go Public 22

Posted by Zonk from the i'll-buy-that-for-a-dollar dept.
1up.com is reporting that the newly allied studios Bioware and Pandemic will become publicly traded businesses. From the article: "One analyst isn't confident the companies will have any success. How can you possibly fail with U2's Bono at your side? Albeit seemingly unthinkable, Wall Street analyst Michael Pachter isn't optimistic. 'They don't have any chance of success,' he said. 'There's not an appetite to segment the different links in the value chain.' Everyone involved, though, is slightly more cheery about the plan, believing it's an important step for developers to receive proper compensation. 'The talent is not getting anywhere what they should,' says Pandemic president Josh Resnick. 'We're the film industry in the 1920's.'"
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Bioware/Pandemic To Go Public More

Bioware/Pandemic To Go Public

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  • ...have made some of my most loved games ever, I wish them the best of luck. Even if the plan does lack even one iota of business sense.

  • Contest (Score:3, Funny)

    by Supurcell ( 834022 ) on Friday December 16, 2005 @07:45PM (#14276833)
    How will this effect the job I win from their Neverwinter Nights module contest?

  • Say What?! (Score:3, Funny)

    by Dubpal ( 860472 ) * on Friday December 16, 2005 @07:50PM (#14276875) Homepage
    'There's not an appetite to segment the different links in the value chain.'

    Does anyone here speak broker? I'm very confused and babelfish isn't helping.

    • They don't think there's any demand to break up the current system where games are developed and published/distributed by the same company... into a system where it's developed by one company and then published by someone else.

  • What are the benefits? (Score:4, Interesting)

    by LordZardoz ( 155141 ) on Friday December 16, 2005 @07:53PM (#14276893)
    As near as I know, the only reason to take a company public is for the owners of that company to make money by selling part or all of their stake in that company.

    I can see plenty of downsides. It opens them up to potential takeover by a publisher if they fail to hold onto more then 50% of their shares. It makes them answerable to shareholders, which may curtail creativity in favor of cutting a profit. But how does Bioware / Pandemic benefit as a company from this move?

    As a side note, Bioware / Pandemic are not the first pure developer to become publicly traded. Digital Illusions [www.dice.se] is also a publicly traded company, and have been for some time.

    END COMMUNICATION

    • Re:What are the benefits? (Score:5, Informative)

      by Tankko ( 911999 ) on Friday December 16, 2005 @07:57PM (#14276913)
      As near as I know, the only reason to take a company public is for the owners of that company to make money by selling part or all of their stake in that company.

      If is a good way for a company to raise money for growth. You might have a good solid business going, but if you had $10M in cash, you could grow the business by leaps and bounds. Going public is a way to raise that money.

    • Read the article:
      the companies are hoping the move will give them more leverage in negotiations with publishers
      • I just dont see how being publicly traded would put you in a better negotiating position with respect to dealings with a publisher. It can worsen your position, if the publisher were to buy up a non trivial proportion of your shares. Then in addition to being dependant on that publisher for funding, you may find yourself obligated to take a deal from that owner / publisher when you could get a better deal from a different publisher.

        The only way to improve your negotiating position with a publisher is to b

        • Re:How the hell would that work? (Score:4, Informative)

          by MBraynard ( 653724 ) on Friday December 16, 2005 @10:43PM (#14277678) Journal
          You seem like a good kid so I'm going to school you.

          First, when someone buys 'non-trivial' portions of your shares, they may actually own you. But if they don't, or even if they do, they don't depend on you at all for 'funding.'

          With additional funding that comes from an IPO, you are betting that the games in your stable will be profitable enough to not sign your soul over to a publisher - you will negotiate terms more favorable to yourself by assuming more risk that the publisher would otherwise be assuming (in exchange for a much better return on the partnership).

          It might also be something else - the cash is needed to get talent to be able to make that bet on your stable, or you want to become a publisher in your own right or fund an alternative publishing method (like Steam).

          If a publisher did buy you out, that means you are really rich, which is the purpose of everything anyway, so mission accomplished.

          • First, when someone buys 'non-trivial' portions of your shares, they may actually own you. But if they don't, or even if they do, they don't depend on you at all for 'funding.'

            You might want to re-read what LordZardoz said. Regardless of who owns a stake in whom, developers generally rely on publishers for funding (of projects).

            There are a ton of stories out there about how developers get short on cash and have to go crawling to their publisher for more, typically having to give up rights (or royalties) to
    • "As near as I know, the only reason to take a company public is for the owners of that company to make money by selling part or all of their stake in that company."

      I think that you just summed up the important benefit of going public. Porsches don't grow on trees.
    • A company generaly decides to go public to get cash to invest in the business. When a company goes public, they are essentially selling investors on a growth strategy for the business, and as well gaining the money to implement that strategy.

      Share price is a measure of many things, from the standpoint of the market, one of which being a vote, so to speak, of the future earning potential of the company and growth of value of a portion of ownership. The owners of the company are in effect foregoing long te
    • The real benefit is in bringing more operating capitol into the company. A nice thing is that if the owners set up the IPO properly, the owners can still hold on to a majority share no matter what else happens. It's not as simple as saying "This company is now entirely owned by the stockholders". If as a part of the initial filing, the current management is granted 75 percent of the company for example, then the public shares are only worth 25 percent of the company.

      It's true that going public will gener
      • Won't this move lessen the ability to make decisions that make for better games in favor of more money? I suppose it's already a decision that is weighed heavily in the cashola direction, but what is the current status of the business? privately owned? One or few people who have an interest in the company making good computer games and succeeding in that arena in the long term? I'm not an expert on anything, but doesn't a public corporation put everying underneath short term benefit for its shareholders?

  • Additional Linkage (Score:5, Informative)

    by Primotech ( 731340 ) on Friday December 16, 2005 @09:53PM (#14277455) Homepage
    Just a heads up, I found this NY Times article much more informative than that 1Up 'piece.' http://www.nytimes.com/2005/12/16/technology/16ele vation.html [nytimes.com]?
  • Albeit seemingly unthinkable, Wall Street analyst Michael Pachter isn't optimistic.

    I don't get this. Why is Michael Pachter unthinkable? I can think about him fine. And why is the fact that he's unthinkable at all related to the fact he's not optimistic?

    • The writer was using a voice recognition system and he has a lisp. While the voice recognition system managed to correct the other S's based on context, unsinkable was replaced with unthinkable.

      Michael Pachter is seemingly unsinkable. His body is divided into sixteen compartments that can be sealed off so that even if some of them are breached the others will remain watertight.
  • It's a shame that there is no real plan and there is not much business sense in it, as both of those companies have produced some awesome stuff. All I can say is that I wish them the best of luck in succeeding

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