Virgin Interactive

History

Nick Alexander started Virgin Games in 1982 after leaving Thorn EMI. It was headquartered in Portobello Road, London. The firm initially relied on submissions by freelancer developers, but set up its own in-house development team in 1984, known as the Gang of Five. Early successes included Sorcery and Dan Dare.

Virgin Interactive's history spans two decades in which it was at the forefront of the home console revolution that spread video games to the masses. It evolved with an ever-changing industry into a sophisticated interactive entertainment maker with the aid of its close ties with Hollywood and the entertainment media. Virgin pioneered an era marked by increasingly sophisticated games that combined popular franchises with computer animations and laser discs. These changes turned the video game industry from a small operation into a multimillion dollar business and weaved video games in popular culture.

Throughout its history, Virgin developed and published games for every major platform, including PC, Mac, home consoles and handhelds such as Amiga, ZX Spectrum, Amstrad CPC, C64, Master System, Mega Drive/Genesis, Game Gear, NES, Game Boy, Super NES, Saturn, PlayStation, Nintendo 64 and Dreamcast.

Virgin was home to many talented developers, including Brett Sperry (co-founder of Westwood Studios, makers of the Command & Conquer series and the PC port of Resident Evil) and Robert C. Clardy, founder of Northwest Synergistic Software. Earthworm Jim creator David Perry got his start at Virgin before founding Shiny Entertainment. Also among Virgin Interactive alumni are famed video game composer Tommy Tallarico, artist Doug TenNapel, designer David Bishop, animator Bill Kroyer, animator/artists Andy Luckey and Mike Dietz and programmer Andy Astor.

1987 marked a turning point for Virgin after its acquisition of struggling distributor Mastertronic. Mastertronic had opened its North American headquarters in Irvine, California just a year earlier to build on its success at home, though growth exhausted its resources after expanding in Europe and acquiring Australian publisher Melbourne House. Branson stepped in and offered to buy 45 percent of Mastertronic stake, in exchange Mastertronic joined the Virgin Group. The subsequent merger created Virgin Mastertronic Ltd. in 1988 with Alper as its president which enabled Virgin to expand its business reach overseas. It was owned by Virgin Communications, Virgin Group's media subsidiary. Mastertronic had been the distributor of the Master System in the United Kingdom and is credited with introducing Sega to the European market, where they expanded rapidly. The Mastertonic acquisition was Virgin's ‘real’ entry in the gaming business, whereas before they were a small developer mostly for personal computers, they now had Sega's business which enabled them to compete with Nintendo in the growing home console market. To gain a foothold in its newly established market, Sega Enterprises, Ltd. acquired Virgin Mastertronic In 1991 and changed its name to Sega Europe Ltd. Virgin retained a small publishing unit, which was renamed Virgin Interactive Entertainment in 1993.

The nineties were a period of entertainment technology convergence, with cable companies, movie studios, telecommunications firms and computer and video game makers merging with other industries to create new forms of entertainment. Hasbro, the world's largest toy company, who had previously licensed some of its properties to Virgin, bought 15 percent—later increased to 16.2 percent—stake in VIE In August 1993. Hasbro wanted to create titles based on its brands, which include Transformers, G.I. Joe and Monopoly. The deal cut off competitors like Mattel and Fisher-Price who were interested in a similar partnership.

As more media companies became interested in interactive entertainment, Blockbuster Entertainment, then the world's largest video-store chain, acquired 20 percent of Virgin Interactive Entertainment in January 1994. It acquired 75 percent of VIE's stock later in 1994 and purchased the remaining shares held by Hasbro in an effort to expand beyond its video store base. The partnership ended a year later when Blockbuster sold its stake to Spelling Entertainment, a subsidiary of Viacom. Viacom is the owner of Paramount Studios and MTV, which made Virgin Interactive part of one of the world's largest entertainment companies.
Blockbuster and Viacom invested heavily in the production of CD-based interactive multimedia—video games featuring sophisticated motion-picture video, stereo sound and computer animation. VIE's headquarters were expanded to include 17 production studios where expensive SGI “graphics supercomputers” were used to build increasingly complicated games, eventually becoming one of the five largest U.S.-based video game companies.

One result of this investment was the creation of a new technology called “Digicel,” which could scan hand drawn animation cells into digital software, originally for an unpublished game called "Dynoblaze," which was managed by Andy Luckey, Paul Schmiedeke and Bill Kroyer in 1993. Key to developing the process were Dr. Stephen Clarke-Willson, David Perry, designer David Bishop, animator Bill Kroyer, animation producer Andy Luckey, technical director Paul Schmiedeke, animator Mike Dietz and programmer Andy Astor. The technology was first released to the general public in Disney's Aladdin for the Mega Drive/Genesis and subsequently on such projects as The Lion King video game.

In late 1993 Virgin Interactive spun off a new company, Virgin Sound And Vision, to focus exclusively on CD-based children entertainment. In January 1994 Blockbuster Entertainment, then the world's largest video-store chain, acquired 20 percent of Virgin Interactive Entertainment in an effort to expand beyond its video store base. The partnership ended a year later when Blockbuster sold its stake to Spelling, a subsidiary of Viacom, Viacom had planned to sell Spelling and buy Virgin Interactive out of Spelling before the sale. While it abandoned the Spelling sale some time ago, the collapse in the games market appears to have killed off any interest in buying Virgin.

The worldwide operations were acquired by Interplay Entertainment in a majority stake buyout backed by Mark Dyne, who became its Chief Executive Officer in 1998. Tim Chaney, the former Managing Director was named president. The U.S. operations were divested to Electronic Arts as part of its $122.5 million (£75 million) acquisition of Westwood Studios that same year.

VIE's equity shares were sold to Interplay (43.9%) and Titus (50.1%) in February and October 1999, respectively. Titus took control of all assets and IPs while Interplay got distribution rights of Virgin's titles in the Americas. VIE ceased to exist as an independent entity after all assets were transferred to Titus Software in 2003.

The Company's assets were acquired by the French publisher Titus Software—its name was changed to Avalon Interactive on July 1, 2003. Titus/Avalon became defunct in 2005.

In May 2002, the Spanish division of Virgin Interactive, known as Virgin Interactive España, was purchased by Tim Chaney along with former Spanish president and founder Paco Encinas. The branch was then separated from the main Virgin Interactive company, already part of Titus Software, and kept its own identity as a Virgin brand. Renamed Virgin Play in October 2002, Chaney left in 2008, it then entered liquidation in 2009.

Games

Source: Giant Bomb