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 Part 1: Stardock Becomes a Game Publisher

In January 2003, computer software developer and publisher Stardock Entertainment was about to go "gold" on its first high-profile Windows game, Galactic Civilizations (GalCiv). Stardock's previous experience in the Windows game market was with its 1998 release of Entrepreneur which ran foul of Entrepreneur Magazine's demands for a name change. This resulted in 2001's release of The Corporate Machine which was published by developer and publisher Take-Two Interactive (TTI). It was a modest success and during this time, most of Stardock's energies were being put not into games but into a new Windows enhancement suite called Object Desktop.

By the time Stardock had begun to work on GalCiv for Windows, one of the programs that made up OD had really taken off -- WindowBlinds. It helped make Object Desktop a hit and put the company in a position that few game developers are ever in: the company was making a profit even as it was pouring resources into making Galactic Civilizations. This turned out to be fortuitous because if Stardock had had to rely on revenue from GalCiv, it wouldn't be here today.

This brings us back to January 2003. Stardock wasn't publishing Galactic Civilizations. Canadian game publisher Strategy First (SF) was. When they had teamed up in early 2002, GalCiv didn't look like much. And so the marketing commitment to the game was not all that it could have been. No previews, few advertisements, and little buzz as the game was about to be sent to manufacturing.

Worse, GalCiv was facing the Master of Orion juggernaut. Master of Orion 3 (MoO3) had a massive budget and been in the works for years. Stardock had taken out the ship design feature in GalCiv in order to avoid too direct of comparison.

But then a couple of lucky things happened. First, MoO3 publisher Atari (then Infogrames) offered to put a flyer advertising GalCiv in every box of MoO3 in exchange for Stardock moving GalCiv's release date back so that MoO would ship first. Second, this extra time would allow Stardock to create a mini-bonus pack for players to download upon release. So, GalCiv's release date was pushed back to March of 2003... with the mini-bonus pack along with it. Retailers, however, had banked on MoO3 being a juggernaut and Galactic Civilizations a footnote. As a result, when the latter game did ship in March of 2003, the major retailers the game was available at was EB, GameStop, and Amazon. Even then, it was not available in significant quantity.

Meanwhile, Master of Orion 3 had received a somewhat less than stellar reception. MoO3 wasn't what fans were expecting. It was very different than the first two in the series and had some stability and playability problems when it shipped. This helped drive demand for Galactic Civilizations. Unfortunately, GalCiv couldn't fully take advantage of that demand because it wasn't available at key retailers such as Best Buy, Circuit City or CompUSA until May. By then, most of the marketing and media attention had long since passed. At the same time, publisher SF was facing serious financial woes. While Stardock was handling the technical support, website, updates, and patch distribution for the game, and much of the media relations, it was not receiving GalCiv unit sales royalties from its publisher. Strategy First eventually filed for bankruptcy owing millions of dollars to numerous creditors including Stardock. Had Stardock been relying on revenue from Galactic Civilizations to carry it forward, it would have been in big trouble. SF was eventually able to pay a fraction of what Stardock was owed in royalties and has since emerged from bankruptcy.

By the end of 2004, Stardock had steadily grown in size and resources. The company decided that from this point on it would be best to publish its games on its own when it made sense. Galactic Civilizations II: Dread Lords will be a good test-case for self-publishing. In early 2005, it had signed on with TTI -- yes, The Corporate Machine's publisher -- to distribute the game to retail. Publishing a game involves completely different resources than developing. Where developing good games involves a lot of technical skills, publishing requires a lot of business organization, marketing skill, and infrastructure to deal with a wide variety of business partners. By 2005, Stardock had put together much of this infrastructure. On the marketing side, full page ads in PC Gamer, Computer Gaming World, and Computer Games Magazine publications would be reserved for half-year runs in each. Some of these campaigns will appear before, and some after the game is released. Much of the goal would be and still is to get pre-orders going for the game.

On the distribution side, Stardock has and will continue to work closely with Take-Two to ensure that on day one the game will be ready for release in most of the major retail channels for PC games. There is an immense amount of effort behind the scenes to make this happen. It becomes a lot easier to understand why publishers scream when developers miss ship dates. Missing a ship date is a very, very bad thing. If we at Stardock miss February 2006 for GalCivII, that will be very bad for us. The marketing, publishing and store availability has to be brought together which is a bit like trying to steer an aircraft carrier. This time around, however, there's no Master of Orion 3 to be wary of. But there is Civilization IV which is scheduled for release in next month from developer Firaxis Games -- far enough away so as to not negatively impact GalCivII sales and in fact may be able to help. CivIV too is being distributed by Take-Two Interactive.

The first Galactic Civilizations sold about 75,000 copies in North America at retail and roughly that same number overseas. The goal this time is approximately 100,000 copies in North America and roughly that number overseas. In 18 months, we'll have a pretty good idea on how close we came to meeting that goal.


Brad Wardell
Founder, Chief Executive Officer
STARDOCK SYSTEMS


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