down from the top of its game - massachusetts institute of...
TRANSCRIPT
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Down From the Top of Its GameThe Story of Infocom, Inc.
Hector Briceno, Wesley Chao, Andrew Glenn,
Stanley Hu, Ashwin Krishnamurthy, Bruce Tsuchida
December 13, 2000
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Outline of Presentation
� Founding and Background� Technical Achievements� Selling Games� Financial Success� Transition to Business Products� Problems in Transition� Conclusions
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Founding and Background
� Dynamic Modeling group at LCS� Created Zork for mainframes
� Original intentions� Keep people together� Make serious software for PCs� Launched Zork to get started
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From left: Marc Blank, Joel Berez (President), Al Vezza, J.C.R. Licklider, Chris Reeve
Infocom’s Board of Directors
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Company Culture
� Fun, humorous group� Young and funky
“…a level of 28 mg of Budweiser Beer was also noted. This is equivalent
to a goldfish drinking eighteen six-packs in a seven minute period.”
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Technical Achievements
� Better English parser� The Z-machine
� Made games compact� System of development
� MDL � Platform-independent byte-codes� Efficient and cost-effective
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Selling Games
� Released Zork in 1980 for TRS-80 Model I� Spawned sequels, Deadline, Starcross, more
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Why were games fun?� “Understood” many English sentences� Vivid stories, characters� Demographics
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Self-publishing
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Marketing and PR
Discover, March 1984
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Ads
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TV
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TV TV
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Infocom Rockets to the Top
Infocom's Sales (1981-1984)
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
1981 1982 1983 1984
YearD
olla
rs
Dec
embe
r 198
3
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Shift to Business Products� Original intentions � Status� Diversify products� Monetary advantages
� Higher profit margins� Consistent revenue stream
“We didn’t want to be a $10 million company. We wanted to be a $100 million company.”
-Tim Anderson
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Cornerstone is Born� Cornerstone: relational database� Idea of two members from LCS � Work starts in 1982
Brian Berkowitz
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Transition to Business Software� Changes in management
� New CEO: Al Vezza� 32 to 100 employees in 1984� New, expensive office building� Sought outside funding
Al Vezza
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Trajectory of GrowthInfocom Game Sales (1983-1985)
0
4,000,000
8,000,000
12,000,000
16,000,000
1983 1984 1985
Year
Dol
lars
Actual Projected
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� Clashes within company�Game profits business division�Games vs. business work styles
� Morale sank
Trouble Arises� Costs up, revenues flat
� Sales projections off� Inadequate funding
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Cornerstone Released in 1985� Easy to use� Not programmable, slow � $1.8 million in sales
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Struggling to Make it
� Debts� Lost over $4 million in 1985� Bank called in loan
� Cut costs� Layoffs� Cornerstone axed
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Activision Merger (1986)
Jim Levy (left) and Joel Berez (right) celebrating “InfoWedding” for
Activision merger
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Continuing Problems
� Losses of $200,000/quarter� Increased competition: Nintendo, Sega, graphics
� Infocom dismantled in 1989
Rise of Nintendo, graphics
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Reasons for Success
� Games: right products at the right time� Demographics matched products� Graphics in infancy
Mystery House, 1980 Ultima II, 1982
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Reasons for Success
� Company culture excelled at making games� Good marketing and public relations
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Text vs. graphics
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Reasons for Failure
� Engineering culture resisted graphics� Cornerstone: wrong product, wrong time
� Performance and functionality � dBASE III
� Lack of finances�Spent money didn’t have
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What Can We Learn?
� Business Lessons� No universal strategy for success� Buy time to improve and refine new products
� Success and failure not simple!
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Thanks to…
Tim Anderson, Joel Berez, Brian Berkowitz, Marc Blank, John Brackett, Scott Cutler, Bruce Daniels, Mike Dornbrook, Stu Galley, Dan Horn, Richard Ilson, Barry Jacobson, David Lebling, Steve Meretzky, Mike Morton,Chris Reeve, Al Vezza, Richard Weissberg
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Game Over