So as many you should already know, Interplay has “risen from the ashes” and announced that they will spend $75M to create the highly anticipated Fallout MMORPG. Don’t hold your breath.
First of all, Interplay doesn’t actually HAVE $75M. That means that they are going to have to convince someone to give it to them. Normally, I would say this would be highly unlikely and you would be stupid to give Interplay and its current “management” that kind of money. I mean, like so stupid, you don’t deserve to have that kind of money to start with. You should be fired from your job, your dog should bite you, and oompa loompas should beat you with nerf bats for days if you do this deal. “Wow” you say, “did Nicodemus actually just say that?”. Damn skippy I did. Why? Read on…
At first glance all this press sounds really exciting. Interplay coming back from the dead and making an MMORPG out of Fallout, a game which is on the top ten list of many gamers. This is so cool! Most of the comments on blogs and forums that I have seen about this are just gushing about how cool a Fallout MMORPG would be, or are discussing the finer points of MMORPG mechanics and gameplay.
How quickly we forget though…in 2004 Interplay tanked and tanked hard. The parent company went bankrupt, Interplay was shut down by the government several times for issues relating to payroll taxes, employees quit or were laid off in droves, and the doors to the offices were locked a few times (late on rent?). There were even a few lawsuits over unpaid royalties. Oh, how the mighty have fallen… Seriously though…google “Interplay” and “bankruptcy”. 2004 and 2005 were bad years for Interplay.
They sold off what licenses they had to other companies (with few exceptions, including rights for a Fallout MMORPG), and hunkered down. Interplay is less than a skeleton of what it once was, and it barely qualifies as a vague shadow.
The $75M they plan on using for an MMORPG is non-existent. I don’t think there are any venture capitalists willing to risk that kind of money. Their plan? Raise it through a stock offering on the public market. Who is going to buy Interplay stock? People that are blinded by their love of Fallout and want a piece, or other people that think that Fallout will be successful because of all of the user attention….which has been created by people speculating that Interplay actually is going to spend $75M on it. Development to start in January 2007? I call bullshit. Do you know anyone that has been hired by Interplay? Have you seen any Job opening ads?
Interplay (essentially Herve Caen and possibly a bare handful of others at this point) doesn’t know an MMORPG from a hole in the ground. Honestly…look at these numbers (from their SEC Filing):
Launch (marketing?): $30M
What the hell? FIVE million for pre-production? And $30M for launch (I assume this includes marketing).
Ok so they want to start in January, they want an assload of money to pull it off, and they have an imaginary staff of a gazillion people to do this. Something doesn’t add up here.
It takes months to build and staff a studio, plus a great deal of time to design a mmorpg from scratch. You can’t just say “let’s make a Fallout MMORPG” and start hiring people.
I don’t know, maybe I am really cynical and jaded at this point, but this whole thing seems to me to be a last ditch effort to make something out of Interplay or make a grab at a lot of money to live the high life for a few years. I’ll bet that there will be delays and delays, a crappy engine, poor art, lots of grind, no real gameplay, and another big name failure in the MMORPG market.
If the guy(s) at Interplay were smart, they would have licensed the Fallout MMORPG to someone that could make a real go at it and do it well. Like Bethesda (look at how badass Oblivion was…even if it was single player, they have shown their skill at the genre), or some other solid studio. There are plenty of candidates out there. Then Interplay could just sit back and collect the royalties, and then start developing or publishing new titles again.
But nope. Let’s soak the public for $75M to make a Fallout MMORPG. People will love the idea and throw money at us!
I’m sorry guys, but you have a terrible track record, and you are just going to screw it all up. This $75M is going to be a terrible waste and a total catastrophe.
I would be excited about a Fallout MMORPG if someone else was doing it. But not Interplay.
Hell, send ME $75M and I’ll turn out three MMORPGs, or at least two really badass ones. The people with the money have got to realize they are blowing these MMORPG budgets way out of proportion.
Well anyway, let’s wait and see. It is doubtful that Interplay will get the $75M unless they whip this enthusiasm for a Fallout MMORPG into a wild press frenzy that will fool the public into thinking this is a good investment idea and buy Interplay stock. Then we will see some neat announcements and maybe some decent screenshots, and that is when it will all start going downhill.
I vote thumbsdown.
Do you doubt me? Go to www.interplay.com and look at the front page. The links there speak for themselves:
* About Interplay
* SEC Filings/Financials
* Investor Relations
* Self Support
* Play Online Chess
Do you really want to give these guys money?
* * *
October 2nd, 2006:
Herve Caen, Eric Caen, and Michael Welter all get a ton of stock. “conversion of unpaid” compensation and stuff.
“On October 2, 2006 the Board of Directors of the Company approved the restructuring of certain compensatory arrangements of Herve Caen, the Chief Executive Officer and Interim Chief Financial Officer of the Company. Under the restructuring $500,000 of Mr. Caen’s earned but unpaid salary was converted to a conditional demand note (such note to be exercisable only if the tangible net worth of the Company exceeds $1 million or in a case of change in control) bearing a 5% annual interest rate and issued 1,000,000 10-year warrants to purchase common stock which are immediately exercisable. The pricing of such warrants was not to be determined until 2 business days after the filing of the Company’s 10Q, and on November 15, 2006 the Board determined that such warrants” shall have an exercise price of $.0279.“
Source: Interplay SEC Filings from Interplay.com
Wow…so all this time that Interplay has been doing *nothing* Herve has been accruing up unpaid salary at six figures a year? And Interplay shareholders are OK with this? Reading on through the rest of the doc, it seems that the $75M is going to come from International non-US investors. //whistle//
Here is a quote:
“The Company entered into an agreement dated November 16, 2006 to engage a Paris-based French investment banking firm to conduct an offshore Private Placement of its common stock. The offering of newly issued shares for an amount of at least (euro) 20 million and up to (euro) 50 million in total will be reserved exclusively to non-US based accredited investors. The securities offered will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. There will be a Paris-based listing sponsor to obtain listing of such shares on the Euronext European exchange. Placement is expected to close before December 31, 2006 and proceeds will be used for general corporate purpose and the funding of the development of a Massively Multiplayer Online Game based on the Company’s game Fallout. The Company does not intend to commit itself to issue more shares than are currently available under its authorized share capital.”
What does this mean? It means if you still own Interplay stock, Herve and his buddies just scored some major stock (for nothing in my opinion) and you are about to have the value of your own stock diluted a LOT. And you can’t buy any yourself while it is dirt cheap! Where is the stock they are selling coming from? Is this new stock that is going to dilute everyone, again, or are these guys going to sell their newly acquired shares as part of the deal? I don’t know, Im just speculating here.What about “general corporate purpose and the funding of the development of the massively multiplayer online game”? Wow, so only part of that $75M is going towards the MMORPG development. I wonder how long until the Board of Directors (//snort//) gives Herve another raise and more stock.