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Mindscape (company)

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Mindscape
Company typePrivate
IndustryVideo games
FoundedOctober 1983; 41 years ago (1983-10) in Northbrook, Illinois, US
FounderRoger Buoy
DefunctSeptember 2011; 13 years ago (2011-09)
Fatejudicial liquidation; overseas subsidiaries continue to operate independently
Headquarters
Boulogne-Billancourt
,
France
Parent

Mindscape was a video game developer and publisher. The company was founded by Roger Buoy in October 1983 in Northbrook, Illinois, originally as part of SFN Companies until a management buyout was completed in 1987. Mindscape went public in 1988 and was acquired in 1990 by The Software Toolworks, eyeing Mindscape's Nintendo license. When Toolworks was acquired by Pearson plc in 1994, Mindscape became the primary identity for the development group. Mindscape was then sold to The Learning Company in 1998 and bought out by Jean-Pierre Nordman in 2001, becoming headquartered in Boulogne-Billancourt, France. Following the poor performance of its products, Mindscape exited the video game industry in August 2011 and soon ceased operations after filing for liquidation. However, its Dutch and Australian-based subsidiaries, Mindscape B.V. and Mindscape Asia Pacific Pty, Ltd., continue to operate as independent publishers and distributors.

Notable titles released by Mindscape include the MacVenture series, Balance of Power, Moonstone: A Hard Days Knight, Legend, Warhammer: Shadow of the Horned Rat, Warhammer: Dark Omen and Lego Island.

History

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Early years (1983–1988)

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Mindscape was founded in October 1983 as a wholly owned subsidiary of the holding company SFN Companies.[1][2] Mindscape's founder, the Australian entrepreneur Roger Buoy, had previously been a computer analyst for Rolls-Royce and later worked for the software division of Scholastic Inc. before being hired by SFN.[3][2] Buoy acted as the president and chief executive officer (CEO) of Mindscape, and the company released its first product in April 1984.[2] Early games include Déjà Vu, Balance of Power, and Sub Mission: A Matter of Life and Death.[3][4][5] In its early years, Mindscape lost about US$6 million annually.[6]

In July 1986, Mindscape acquired the assets of Scarborough Systems, a software company from Tarrytown, New York.[7] Scarborough Systems continued its operations through Lifeboat Associates, a subsidiary that was not acquired by Mindscape.[8] In October, SFN announced that it would be selling or closing large parts of its business, including plans to liquidate Mindscape.[9] On December 31, Mindscape bought the assets of Roslyn, New York-based company Learning Well.[7] Since Mindscape was not liquidated by the end of 1986, it was assigned to SFN Partners L.P., a limited partnership company.[7] A new corporation set up by Buoy and SFN's former president and chairman, John Purcell, subsequently acquired Mindscape from SFN Partners on January 16, 1987, for $3 million.[7][10] Buoy retained his positions in the company, while Purcell became its chairman.[7] Around this time, Mindscape had 74 employees.[7]

With sales of $12 million, Mindscape was profitable for the first time in the fourth quarter of 1986; it started publishing black numbers by 1987.[7][10] In early 1987, Mindscape introduced the Thunder Mountain label to produce software at a lower price, with Rambo: First Blood Part II being its first release.[11] In March 1987, Mindscape acquired the software division of Holt, Rinehart and Winston formerly known as CBS Interactive Learning, with all operations transferred to Mindscape's Northbrook, Illinois, headquarters.[1] By June 1988, Mindscape filed with the U.S. Securities and Exchange Commission to prepare an initial public offering (IPO) and become a public company.[10] The move aimed at raising $9.6 million through sale of stock to reduce bank loan debts of $9.8 million.[10] The IPO was completed later that month, with the company beginning trading over-the-counter, and the first shares were issued by July.[12][13] Bob Ingersoll and Dennis O'Malley were appointed vice president (VP) of marketing and VP of sales, respectively, in May 1987.[14] In November, Mindscape signed a lease of 21,000 square feet (2,000 m2) of office space in Wheeling, Illinois, for $236,000.[15] Robert A. Drell, formerly of Dresher Inc., became VP of finance and chief financial officer in October 1988.[16]

Under The Software Toolworks and Pearson (1989–1997)

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In December 1989, the video game company The Software Toolworks reached an agreement to acquire Mindscape, exchanging every Mindscape share for 0.4375 shares in newly issued Toolworks common stock.[17] The deal was completed on March 13, 1990, and valued at $21.2 million.[18][19] Mindscape had been one of the approximately forty companies licensed to develop for Nintendo video game platforms, which was a major driver of the acquisition.[18][19][20] The two companies merged, and Buoy joined Les Crane on Toolworks's board of directors.[21] Following the acquisition, Mindscape became Toolworks's division working exclusively on games for Nintendo platforms, which sharply increased Toolworks's earnings.[18][19][22] Subsequently, in March 1994, Pearson plc agreed to acquire Toolworks for $462 million, with the deal closing on May 12, 1994.[23][24]

Pearson was criticized for overpaying in the acquisition, and the acquired company lost $69 million within its first few years under the new ownership.[25][26] By November 1994, the Toolworks name was discontinued in favor of the Mindscape brand.[27] The same year, Mindscape acquired the video game developer Strategic Simulations.[28] In September 1995, it acquired Micrologic Software of Emeryville, California, to undisclosed terms.[29] In January 1996, John F. Moore became CEO after leaving the same position at Western Publishing.[30] In November, Mindscape laid off twelve developed staff as a cost reduction measure.[31] In 1997, Mindscape acquired software company Multimedia Design.[32] In 1997, the final year under Pearson, Mindscape became profitable again, earning $2.7 million.[33] One day prior to the release of Lego Island that year, Mindscape fired all of the development team which worked on the game to avoid paying them any bonuses.[34]

Under The Learning Company (1998–2001)

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Pearson proceeded to sell Mindscape to The Learning Company (TLC) in March 1998 for $150 million in cash and stock.[35] A waiting period was temporarily imposed by the Federal Trade Commission and subsequently terminated the same month.[36] TLC expected that its stocks would rise $0.05 per share as a result of the acquisition, while Pearson lost around $347 million.[33][37] Later that year, when TLC integrated its Broderbund division, Mindscape took over Broderbund's productivity, reference and entertainment brands.[38] The company's Mindscape unit would acquire Petz developer PF.Magic in 1998.[39] TLC would be eventually acquired by Mattel in May 1999 and became a subsidiary of the company's Mattel Media division, later renamed Mattel Interactive.[40] By then, Mattel occasionally used the Mindscape name for publishing.

TLC and Mattel Interactive's gaming assets were acquired by Gores Technology Group in 2000 and its game brands were reformed under a new entity, Game Studios, in January 2001.[41]

French Relaunch (2001-2010)

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In October 2001, former TLC-Edusoft executive Jean-Pierre Nordman purchased The Learning Company's international assets from Gores and reconciled them under Mindscape SA, a new company formed by Nordman located in Boulogne-Billancourt, a suburb of Paris, France with Nordman assuming a managerial role.[42][3][43] The new Mindscape continued the work on the publication and distribution of video games and software, mostly focusing towards the family and educational markets.

In November 2002, the company purchased the assets of bankrupt software publisher Montparnasse Multimedia.[44]

The UK division signed many licensing deals throughout the next few years, including one with Atari and HIT Entertainment to re-release the former's Thomas & Friends titles in July 2005, including a contract to produce two new titles;[45] and a budget reissue deal with Focus Multimedia in June 2006.[46]

In October 2005, Mindscape purchased French video game developer and publisher Coktel Vision from Vivendi Universal Games. The company absorbed the studio into its operations, including its remaining eleven employees.[47][48]

The company saw major expansion in 2009. On 20 October, they purchased the company Violet out of liquidation and took over production of their Nabaztag smart device range.[49], announcing a new a third generation Nabaztag, called "Karotz" in October 2010.[50] In November, the company opened up an internal development studio, Punchers Impact, in Paris to develop multi-platform digital download games.[51] The company developed two games: Crasher, a racing game, and U-Sing, a music game. By December 2009, Thierry Bensoussan had become the managing director for Mindscape.[51]

In September 2010, Punchers Impact's studio managers, Guillaume Descamps and Jérôme Amouyal, left the studio to found Birdies Road.[52]

Collapse (2011)

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On June 23, 2011, Mindscape was placed into insolvency after failing to reach a deal with its lawyers and banks to pay off its debts. The company announced that they would begin a restructuring process.[53] This followed the unsuccessful sales of Crasher, and the high music licensing costs for U-Sing affecting the profits the game would end up getting, despite it selling well.[54][55] On August 10, Mindscape announced its exit from the video game industry by closing Punchers Impact and laying off its forty employees.[56] On 24 August, the Nanterre Commercial Court converted Mindscape's insolvency status into judicial liquidation.[57] In November, Aldebaran Robotics, the makers of the Nao robot range, acquired Mindscape's robotic assets.[58]

The company's regional subsidiaries, including Mindscape Asia Pacific in Australia, which was sold to private investors in October 2010[59] and Mindscape B.V., were unaffected by the company's insolvency and continue to operate.

Software developed and/or published

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References

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