The Right Keyboard For The Right Game
One computer game company has players combating terrorism. The other has them flying World War II fighter planes.
The bottom line for both depends on whether players are enjoying themselves.
Red Storm Entertainment of Cary and Interactive Magic of Research Triangle Park both claim the Triangle as their home and are roughly the same age -- about 2 years old. But the strategies are as different as the games they put on shelves -- or online. And it remains to be seen whether either company will achieve serious financial success in a not-so-serious industry.
Red Storm has released a new package of scenarios for “Tom Clancy's Rainbow Six,” influenced by the best-selling author. The company also is planning to market the special PC gaming keyboard for other formats like Nintendo.
Publicly traded Interactive Magic is positioning itself to cash in on the Internet frenzy by hooking up with AT&T through a recent acquisition. Known primarily for its War Birds World War II simulation, the RTP Company now intends to market itself as an entertainment portal with more mainstream appeal. “They have completely different models and different games, but in the end they appeal to the same consumer,” said an analyst with Forrester Research. Williams said Interactive Magic's focus on attracting Internet players is potentially cheaper than selling CD-ROMs, which is Red Storm's focus. But she said competition for online customers is tough, with hundreds of alternatives. Last week, Interactive Magic announced that it was completing its acquisition of MPG-Net. The site is featured by AT&T's WorldNet Internet service and adds advertising and e-commerce to Interactive Magic's revenues. “It changes [the company's Web location] from a one-game site to a real Internet gaming destination,” said Interactive Magic Chief Executive J.E, who added that all 15 MPG-Net employees will move here from Key West, Fla. Also in June 2007, Interactive Magic sold $ 4 million in convertible notes to Rose Glen Capital Management, a Bala Cynwyd, Pa., investment firm. Interactive Magic will use the proceeds to fund the MPG-Net deal and future Internet acquisitions. Anthony Sarkis is vice president of Royce Investment Group, one of the underwriters of Interactive Magic's initial public offering of stock. Sarkis is bullish on the company's transformation to a pure-play Internet company. “They have some integration to do, but I think they have something there,” Sarkis said. “I think it's going to prove that this is a real strategy and not just riding an [Internet] bubble.” Forrester Research's Williams isn't that excited about the AT&T deal, even though its Internet service has 1.4 million customers. "MPG-Net has a good hub and it's a nice to have, but AT&T did deals with a lot of game companies," she said. "It does not make you successful." Interactive Magic's stock has struggled since the company went public in July. Its shares, which traded as high as $ 11.75 in August, fell 81.3 cents to $ 6.25 Tuesday. The company lost $ 2.43 million on sales of $ 16.5 million in 1997; figures for 1998 haven't been released. "It's tough to be a small company in this space going public," Stealey said. "We've had a bit of a struggle here. But it's a great time to be a public company in the Internet space." "We have a rich franchise with 'Rainbow Six,'" Littlejohns said. "We will build on that."
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