Acclaim Entertainment

Last updated

Acclaim Entertainment, Inc.
Company type Public
Nasdaq: AKLM (pre-2004)
OTC Pink: AKLMQ (2004)
Industry Video games
Founded1987;37 years ago (1987) in Oyster Bay, New York, U.S.
Founders
DefunctSeptember 1, 2004;20 years ago (2004-09-01)
Fate Chapter 7 bankruptcy
Headquarters
Glen Cove, New York
,
U.S.
Area served
Worldwide
Key people
  • Rodney Cousens (CEO)
  • Gerard Agoglia (CFO)
Products
BrandsAKA Acclaim (formerly Acclaim Max Sports)
Club Acclaim
Acclaim Sports
Number of employees
585 (2004)
Subsidiaries § Subsidiaries

Acclaim Entertainment, Inc. was an American video game publisher based in Glen Cove, New York. Originally formed by Greg Fischbach, Robert Holmes and Jim Scoroposki out of an Oyster Bay storefront in 1987, the company established a worldwide development team through a series of acquisitions in the late 1990s and early 2000s. After poor financial returns in their 2003 fiscal year, Acclaim filed for Chapter 7 bankruptcy in September 2004. Properties owned by Acclaim were subsequently auctioned off to various parties.

Contents

History

1987–1990: Founding

In the early 1980s, Greg Fischbach was employed by American video game company Activision, where he worked together with Robert Holmes and Jim Scoroposki. He left Activision to join RCA Records, which was subsequently acquired by Bertelsmann and Fischbach found himself unemployed. In 1987, he met with Scoroposki in Oyster Bay, where Scoroposki owned a sales rep company, to discuss a possible shared venture. After Scoroposki suggested that the two should re-enter the video game business, they contacted Holmes to join them, and the three jointly founded Acclaim Entertainment. [1] Acclaim did not have any venture financing, and was financed entirely by Fischbach and Scoroposki. [2] In its initial years, Acclaim was exclusively a video game publisher, either farming out the creation of its video games to external developers or localizing existing video games from overseas. But as it grew, it purchased some independent studios, including Iguana Entertainment of Austin, Texas; Probe Entertainment of London, England; and Sculptured Software of Salt Lake City, Utah. [3] [4]

The name of the company was picked because it had to be alphabetically above the co-founder's former place of employment, Activision, and also had to be alphabetically above Accolade (another company formed by ex-Activision employees). This was a common formula for picking names of new companies that were founded by ex-Activision employees (the founders of Activision used this formula when they left Atari).

Many of Acclaim's products used licenses from popular comics, television series and movies. [5] Fischbach has said that because the video game market was less discerning during the late 1980s and early 1990s, with specialist gaming publications having little influence on consumer opinion, the use of a popular license was one of the few reliable ways to convince retailers to stock a game. [2] In its earlier years, the company entered into an agreement with Interactive VCR Games Inc., whose best sellers include NFL Quarterback, to produce interactive VCR games, as well as its handheld game market. [6] [7] They were also responsible for the ports of many of Midway's arcade games in the early to mid-1990s, including the Mortal Kombat series. They also published some games from other companies that at the time of publication did not have an American branch, such as Technōs Japan's Double Dragon II: The Revenge and Taito's Bust-a-Move series.

1990–2004: Success

In 1990, Acclaim partnered with TV producer Saban Entertainment and distributor Bohbot Entertainment to launch Video Power , which subsequently went on air in the fall of 1990. [8]

In December 1993, Acclaim signed a distribution deal with the European Spanish branch of Buena Vista Home Video to allow the company to distribute its titles in Spain. [9]

In May 1994, former Sega Enterprises USA president Tom Petit, who had worked at Sega for nine years, became the president of Acclaim's coin-op division. [10]

Through much of the 1990s Acclaim were one of the most successful publishers of console video games in the world. In the financial year ending August 1994 they saw a profit of $481 million, and this figure rose to $585 million the following year. [5] [11] Franchises such as Mortal Kombat, NBA Jam , and NFL Quarterback Club acted as reliable cash cows for Acclaim. [2] Acclaim's expansion continued when the company signed a relationship with Marvel Entertainment Group whereas Acclaim handled the video game license to some of Marvel's comic book properties. [12] Later that year, the company acquired a minority interest in the FMV gaming studio Digital Pictures and released its titles through Acclaim Distribution. [13]

In 1995, the company acquired Sculptured Software, Iguana Entertainment and Probe Entertainment and the companies switched to the first-party development studio, known as Acclaim Studios from 1999 to 2004. [4] [14] Acclaim's gaming business was further expanded with the purchase of exclusive rights to publish Taito's games in the Western Hemisphere. [11] The company also had a motion capture studio built into their headquarters, making them the first video game company to have an in-house motion capture studio. [15]

A less significant aspect of Acclaim's business was the development and publication of strategy guides relating to their software products and the issuance of "special edition" comic magazines, via Acclaim Comics, to support the more lucrative brand names. Lastly, they created the ASF/AMC motion capture format which is still in use in the industry today. [16]

Acclaim enjoyed a long relationship with the World Wrestling Federation (WWF) dating back to 1988's WWF WrestleMania . However, after failing to match the success of World Championship Wrestling (WCW)'s THQ/AKI games amidst the Monday Night Wars, the WWF announced to not renew their deal with the company in April 1998 and sign a joint-publishing deal with Jakks Pacific and THQ, which was after WCW's contract with the latter publisher expired and instead signed a deal with rival Electronic Arts. [17] in October 1999, Acclaim signed a contract with Extreme Championship Wrestling (ECW) to publish video games based on the promotion. [18] Under this contract, Acclaim released two video games until ECW's bankruptcy in 2001 who still owed Acclaim money. The game publisher would release three wrestling titles under the Legends of Wrestling banner in the throes of its final years. [19]

2004: Decline and bankruptcy

Acclaim suffered financial problems in 2004, the result of poor sales of its video game titles. This resulted in the closure of Acclaim Studios Cheltenham and Acclaim Studios Manchester in England and other places and their filing for Chapter 11 bankruptcy protection, leaving many employees unpaid. Amongst the titles under development at the UK studios were Emergency Mayhem , ATV Quad Power Racing 3 , The Last Job, Interview with a Made Man and Kung Faux . [20] [21]

In May 2004, it was announced that Major League Baseball had revoked its licensing agreement with Acclaim for the All-Star Baseball franchise due to a lack of royalty payment from the publisher. The following month in June, Turok owners Classic Media announced that it had terminated Acclaim's video game rights to the franchise also due to non-royalty payments. [22]

When Acclaim's agreement with GMAC Commercial Finance, their primary lender, expired on August 20, 2004, [23] the company closed all of its facilities on August 27, [24] of which the Austin and New York studios saw all employees let go. [25] Prior to the closures, as of March 31, 2004, Acclaim employed 585 staff worldwide. [23] Acclaim announced on August 30 that they were to go bankrupt, [26] and filed for Chapter 7 bankruptcy with the United States bankruptcy court in Central Islip, New York on September 1. [27] [28] A September 2005 complaint filed with the same court found founders Fischbach and Scorposki, as well as executives Rodney Cousens, Gerard F. Agoglia, Edmond P. Sanctis, Bernard Fischbach, James Scibelli, Robert H. Groman and Michael Tannen, accountable for the financial losses of Acclaim shortly before the bankruptcy filing, seeking $150 million in damages. [29]

Asset selling

On October 1, 2004, Rod Cousens purchased the former Acclaim Studios Cheltenham and Acclaim Studios Manchester development studios and some of its existing unfinished projects. Cousens attempted to reopen the studios under a new publisher tentatively entitled "Exclaim" on October 11 [30] but was stalled following a lawsuit and legal wrangling over Acclaim's intellectual property, with both the US and UK administrators claiming rights. [31]

After interested offers from Take Two Interactive, on October 8 it was announced that THQ had acquired worldwide publishing rights to Juiced. [32]

In November 2004, Acclaim's headquarters were sold to Anthony Pistilli of Pistilli Realty Group for $6 million. [33]

On April 20, 2005, it was announced by Fund4Games that Acclaim's upcoming European titles had been sold to them, with Interview with a Made Man and ATV Quad Power Racing 3 being put back into development at the Manchester studios, which were reopened by Fund4Games under the name Silverback Studios. [34] In June 2006, Mastertronic announced they had picked up the publishing rights to Made Man in Europe. [35]

The Dave Mirra Freestyle BMX and ATV: Quad Power Racing franchises were sold to Crave Entertainment in July 2005. [36]

In August 2005, former Activision executive Howard Marks purchased the Acclaim brand and logo for a reported $100,000. In the beginning of 2006, Marks formed a new company called Acclaim Games. According to a job listing for the company, Acclaim Games was aimed at the US and UK preteen multiplayer markets. However, the second iteration of Acclaim did not go well due to connectivity and payment issues for their online games, along with a lack of action against dishonest players, earning that iteration of the company an "F" grade from the Los Angeles/Southern California Better Business Bureau. [37]

In 2006, Throwback Entertainment purchased more than 50 of Acclaim's games, and vowed to bring such titles as Re-Volt , Extreme-G , Gladiator: Sword of Vengeance , Vexx , Fur Fighters and many other franchises into the next generation and beyond. [38]

In March 2007, budget publisher XS Games picked up publishing rights to The Red Star , with Take-Two Interactive handling European distribution. [39] In April 2007, Warner Bros. Interactive Entertainment, the North American distributor for Codemasters' products at the time, announced that the British publisher had picked up the rights to Emergency Mayhem. [40]

In July 2010, South Korean based company We Go Interactive purchased Re-Volt, RC Revenge, and RC De Go! (developed and owned by Taito) from Throwback. [41]

In May 2016, the Acclaim brand itself, and not any of the IP previously held by Acclaim, was acquired by Collectorvision, an independent game developer, publisher and manufacturer. [42]

In October 2018, Liquid Media Group purchased 65 ex-Acclaim titles from Throwback for $1 million. This mainly consisted of installments in the NBA Jam, AFL Live, All-Star Baseball and NFL Quarterback Club franchises, as well as games from Japanese developer Taito that Acclaim had published outside of Japan. [43]

Controversies

During Acclaim's decline towards bankruptcy, the company made several controversial business and marketing decisions in the United Kingdom. One example was a promise that a US$10,000 (£6000) prize would be awarded to UK parents who would name their baby "Turok", to promote the release of Turok: Evolution . [44] A later investigation by VG247 found that all those who had reportedly changed their names were actors. [45] Another was an attempt to buy advertising space on tombstones for Shadow Man: 2econd Coming . [44] To promote Burnout 2: Point of Impact , Acclaim offered to reimburse any driver in the United Kingdom who received a speeding ticket. Following a negative reaction to this from the UK government, the plan was cancelled. [46]

In the US, Acclaim suffered multiple lawsuits, a portion of them with former partners. Mary-Kate and Ashley Olsen sued over unpaid royalties. [47] Another lawsuit was from Acclaim's own investors, claiming that Acclaim management had published misleading financial reports. [48]

In the last iteration of the BMX series, BMX XXX , nudity and semi-nudity (e.g., full motion video of strippers and nude female riders) was added in hopes of boosting sales. [48] However, like most of Acclaim's video games during the company's final years, BMX XXX sold poorly, and was derided for its sexual content and poor gameplay. Dave Mirra himself publicly disowned the game, stating that he was not involved in the decision to include nudity, and he sued Acclaim for fear of being associated with BMX XXX. [49]

In 1997, two years after its acquisition of Sculptured Software, during which it offered employees what looked like iron-clad contracts and stock that would be vested over the course of the contracts, Acclaim terminated about half of the staff of the Salt Lake City studio, violating its own contract terms. The lay-off came abruptly to the point that the employees had to choose between taking a reasonable severance package (whose terms altered several times during the initial weeks after the layoff) and not suing, or join the other creditors and sue, but lose their severance packages. In 2007, one of numerous class action suits filed on behalf of stockholders was won, allowing some of the employees to realize a return on some of the stock that had been vested. [50]

Subsidiaries

Games published

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