(This is a repost from an original article written by Allen Varney who designed the PARANOIA paper-and-dice roleplaying game (2004 edition) and has contributed to computer games from Sony Online, Origin, Interplay, and Looking Glass. The article was printed on a magazine that is no longer in circulation, but I liked it and I wanted to share it with all... - Tribal Plague)
The scene: a bar at a gaming convention in the late 1980s. The speaker: an executive at the computer game company Origin who today, no doubt, would prefer to remain anonymous.
Why the holy-fire view of William M. Hawkins III, founder of Electronic Arts? Because (as this exec explained) EA meant to win in the computer game business not only by making good games, but by preventing competitors from making good games too - by actively interfering with their ability to do business. As one example, EA had filed a frivolous lawsuit against Origin. Forced into a costly out-of-court settlement, Origin execs asked Trip Hawkins why he had allowed the suit; he responded, "This is just business. This is the way we're going to win."
Furthermore, EA was all about marketing. For Hawkins the question was never, "How good is this game?" It was always, "How can we sell this?" To high-minded execs at Origin - makers of the Ultima and Wing Commander series, the high priests of the high end, who valued commitment to an artistic vision - this attitude was sacrilege.
Ultima designer and Origin co-founder Richard "Lord British" Garriott even worked an EA reference into Ultima VII (1992). Two high-profile nonplayer characters, Elizabeth and Abraham, perform seemingly helpful tasks for the player - but E. and A. turn out to be murderers in league with the player's nemesis, the Guardian. The three items that power the Guardian's evil generators are a cube, a sphere and a tetrahedron - the former EA logo.
This reference in Ultima VII proved prophetic. In 1991 Hawkins left EA to found the short-lived 3DO Company. The next year, 1992, Origin entered dire financial straits and sold out to EA. Yet Origin never sold its soul; rather, EA spent the next 12 years gradually and painfully devouring it. The sad story could be a case study for future MBA students.
Why did Origin sell? It was partly due - brace yourself - to the price of floppy disks.
Changing the World
Founded in 1983, Origin was a creature of the dawn. Garriott had already gotten rich in high school, from a game he coded in BASIC in his bedroom and sold in a ziplock bag. Founding Origin with $70,000 in family money, he and his brother Robert created a culture that prized creative vision and expansive, thoroughly developed game settings. The company later took the slogan "We create worlds."
Origin project director Stephen Beeman recalls, "Origin's cardinal virtue was its commitment to do whatever it took to ship the director's vision. We had a motto for it: 'A game's only late until it ships, but it sucks forever.' If the game's creative vision demanded a megabyte of graphics, and the only way to load that into memory was to write our own operating system - " (the dubious "voodoo memory" scheme Origin created in 1992 for Ultima VII: The Black Gate) " - well, that's what we did, and damn the risk to the schedule or the consequences to the budget, not to mention the programmers' lives."
In recent years, Electronic Arts has taken heat for its sweatshop working conditions, but marathon crunches were a fact of life at Origin long before the purchase. Project teams endorsed Beeman's doctrine: "Sleep is for the weak."
Producer Warren Spector worked at Origin from 1989 to 1996. "I always felt we were genuinely trying to change the world," he says. "There was a feeling of creating something new, of being on the cutting edge; that was incredibly exciting. That, more than anything else, drove people to do exceptional work."
Employees treated each game as a learning experience. Richard Garriott made it a point of pride to start each new Ultima entirely from scratch, with not a line of code carried over from earlier games. Even the map editors and other tools were coded anew.
Beeman says, "We started with the vision of what we wanted the game to be - a vision generally inspired by our love of film - then busted our asses to figure out a way to pull that off. By contrast, companies like LucasArts or id started with an idea of what it was possible to do, then crafted killer gameplay around that. When our creative vision turned out to be achievable in a reasonable time (as with Wing Commander I and II), we hit home runs. When the creative vision turned out not to be achievable, development dragged on until the next year (or beyond), when improvements to the hardware made it achievable."
The problem was, creating worlds took a lot of disk space.
Seventy Cents Times Eighty Zillion
By 1992, Origin faced a cash shortfall caused by factors almost entirely outside its control.
Origin was a publisher, which meant manufacturing boxes and stocking them in the retail channel. In that primeval pre-Myst era, computer games shipped not on CD-ROMs but on 3.5-inch, 1.44-megabyte high-density floppy disks. Origin games, in particular, required lots of disks - often eight to ten disks that cost about 70 cents apiece. Cost of goods became such an issue that while Strike Commander was in development, the team jokingly suggested shipping the game pre-installed on its own 20MB hard drive. (Strike shipped on eight floppies in 1993, but CD-ROMs finally became commonplace in time for a later expanded edition.) Wing Commander was a huge, unanticipated success, and the high cost of manufacturing it consumed all the company's ready cash and more.
In a single year Origin's payroll skyrocketed. Prior to Wing Commander and Ultima VI, Origin games were created by a programmer or two, with some contract art and writing. Wing Commander had five core team members; Wing Commander IIsuddenly had 25. Star designer Chris Roberts, among others, drew a substantial salary.
While Origin's cash reserves were tapped harder than ever, the Apple and Commodore 64 platforms collapsed, taking with them many small retailers. Origin not only lost the sales of its Apple and C64 back inventory, but it suddenly had to eat bad debt from failed companies in the channel. Worse, Richard Garriott had chosen to develop new projects first on the Apple platform rather than the technically inferior IBM PC - "a horrific mistake," he now says. Retooling the pipeline would take six months.
Normally in this situation - high short-term expenses, but higher long-term potential - a company borrows money. But as bad luck would have it, at that time there was no money in Origin's home state, Texas. The savings-and-loan industry had collapsed following a real-estate bubble. With half the state's financial institutions unable to lend money, banks could ignore small businesses in favor of big, safe corporations. Just a year or two later, this crisis passed, but Origin got caught at just the wrong time.
As the Garriotts dipped into their own savings to make payroll, they contemplated options. Richard says, "Ultimately we chose EA because EA's vision for the future, their prediction of platform shifts, and their planning to meet that challenge was right on."
And, too, Trip Hawkins had left EA. "Had Trip still been there, there's no way we would have gone with EA," said an Origin staffer involved in the deal.
Starting Out Fine
Origin's employees on the early years after the purchase:
Spector: "For the first couple of years, EA's acquisition of Origin changed the place for the better in nearly every way. EA brought some much needed structure to our product greenlight and development processes. And we certainly got bigger budgets! We were able to do more and cooler things than we'd been able to do before. In most ways, though, EA gave us a lot of rope - enough to hang ourselves, as it turned out!"
Garriott: "We doubled the size of the company from 200 to 400 that first year. We went from 5-10 projects to 10-20, and staffed those projects almost entirely with inexperienced people. It won't surprise you to learn those projects were not well managed. That was totally Origin's fault. We failed, and we ended up killing half of those products. That's probably what set up the EA mentality that 'Origin is a bunch of [deleted],' pardon my French."
Spector: "Once it became apparent we were getting a little crazy, EA started taking a firmer hand with us, integrating us into the machine in subtle and not so subtle ways, and that's when things started to get a little less pleasant. Every company has its politics but, in my relatively limited experience, EA was an incredibly political place - lots of empire building, folks jockeying for bigger, better jobs, competing for resources, marketing dollars and so on. And there were certainly people at EA who, let's just say, lacked confidence in Origin's development management and - less sensibly, I think - in the Austin development community in general. There were a lot of strange decisions."
Denis Loubet, artist: "Before [the purchase], the desire to keep Origin afloat did much to keep politics on the back burner. But afterwards, survival transformed into a competition at the feeding trough. As production groups became more insular, Origin fractured. That was the death of any 'Origin Culture.' It didn't help that each production head was a dictator over his team, yet each had to brown-nose EA for funding."
Steve Powers, artist and programmer: "When EA assumed control, much of the joy began to fade from the Origin company culture. It was a running joke through the company that we went from working for the Rebellion to working for the Empire. Our company had a culture that made work an incredible joy, day in and day out, even though we worked tremendously long hours. And the culture *had* to be appealing, because Origin paid a pittance. I started there at wages that were just above poverty level. EA began to bring salaries up to a competitive level for the region, and people who were equivalent to hobbyists were suddenly in a career. It was no longer a nerdy fraternity; it was business."
Garriott: "There are people at EA to this day who I respect either as brilliant or at least well-intentioned. [CEO] Larry Probst was often not supportive of the things I was doing, but I respect Larry because he was always clear, rational and consistent in his lack of support. I felt [Chief Creative Officer] Bing Gordon understood sometimes; I always felt Bing's intent was to help me do my best. Nancy Smith [Executive VP, North American Publishing] empathized and desired success for all at Origin. [But] there were others who got into politics, who very clearly would get into the mode of 'Your success will work against my success. EA caring about you will mean they care less about me.' The politicians began to look at us as the enemy, and would actively work against us."
After EA bought Origin, authority for the new division fell to the president of EA Worldwide Studios, Don Mattrick.
A Canadian from the Vancouver suburb of Burnaby, Mattrick wasn't just a suit; he could claim seniority over many Origin coders, having programmed (with Jeff Sember) his first published game, Evolution for the Apple II, in 1982 at age 17. Mattrick joined EA in 1991 when EA paid him $13 million for his company, Distinctive Software, maker of edutainment and sports games such as the Test Drive andHardBall series. Distinctive became EA Canada, and as its Executive VP and General Manager, Mattrick led it brilliantly from strength to strength until 1997, when EA CEO Lawrence Probst III promoted him to Worldwide.
Once EA started exerting a tighter grip on Origin, Mattrick pushed teams to stay on schedule (an insistence that badly damaged Ultima VIII, according to Garriott). Mattrick killed many projects because they had spun out of control, and cancelled other projects for reasons staffers still consider mysterious. Some staffers believe (though not for attribution) Mattrick undermined Origin because it competed for resources with Distinctive's new incarnation, EA Canada. This view arose particularly because of the way Mattrick managed Origin's late-'90s move into online games.
This move was not his idea. Originally there was no money in the Origin budget forUltima Online. Garriott went directly to Probst to ask for $150K in seed money to kick off the project. Without Probst's approval, UO would have been delayed, maybe never started at all. Garriott said in a 2004 GameSpy interview, "Ultima Online was kind of a red-headed stepchild during development. Everyone at EA was focused on Ultima IX, which was seen as more of a sure thing. Nobody at EA really understood whatUltima Online was all about." But after the beta test drew 50,000 volunteers, EA made a sharp reversal. They insisted Garriott shelve Ultima IX and work only on UO.
Launched in 1997, UO's unheralded success (it peaked at about 250,000 subscribers) kicked off the MMORPG industry and roused EA's interest in online games. Origin presented EA a suite of ideas for followups: a Flash Gordon-style space opera, a martial arts game using collectible electronic cards, online soccer and more. None of the proposals were sequels, spinoffs or licenses.
But EA, which sold sports and licensed games by the millions, was used to releasing sequels every year. The corporate office commissioned Wing Commander Online, Privateer Online (based on the 1993 space sim), and the licensed Harry Potter Online. And, inevitably, Ultima Online 2, which the marketing department retitled Ultima Worlds Online: Origin.
Staffers argued against doing UO2, because it would compete with UO. But Mattrick greenlighted it in 1999, cancelled Wing Commander Online and assigned its team to UO2. A bunch of guys who liked spaceships, reassigned to animate monsters? They quit six months later, and UO2 had to start over. The game never really recovered.
In March 2001 Mattrick cancelled UO2. Among his reasons: UO2 would compete with the original UO. (EA repeated this story precisely with Ultima X: Odyssey, greenlighted 2002, cancelled 2004.)
Privateer Online: cancelled in 2000 to avoid competition with EA's big bet, Earth and Beyond. The core PO team moved to Verant (later Sony Online Entertainment) and created Star Wars Galaxies.
Harry Potter Online, cancelled at Origin 2001, assigned as Hogwarts Online to EA studio New Pencil, cancelled 2005.
Transland (a surrealist game), Silverheart (an RPG with design contributions fromMichael Moorcock), Firehorse (Hong Kong John Woo-style full motion video), mainstream RTS Technosaur: cancelled, cancelled, cancelled....
"The business was changing radically, in ways an independent developer/publisher like Origin probably wasn't equipped to handle," says Spector. "We were becoming a blockbuster business, like the movies. When Origin's revenue and profits took a hit and EA gave us a very... aggressive budget number to hit, it was mostly my projects that got killed - I wasn't happy about that. But what were they going to do? Kill Richard Garriott projects? Chris Roberts projects?"
Spector's games (Ultima VII Part 2: Serpent Isle, Ultima Underworld, System Shockand many more) consistently brought returns a small studio would think quite respectable. But the economics of a billion-dollar corporation are different. For EA it makes more sense to reach for the sky with every single project. The games that die or get cancelled become tax writeoffs, and the rare hit pays for all the rest. The worst case is the mere modest success, a mediocre return on equity without corresponding tax advantages.
Spector says, "Mattrick told me I needed to make games more like Richard and Chris - swing for the fences, go for the megahit, spend a ton to make a ton - instead of consistently turning out smaller games, making some money every year. I thought he was nuts at the time. Took me several more years to admit that, like it or not, he was right and I was wrong."
The forces that propelled Electronic Arts to success and gave it the funds to purchase Origin - the incessant marketing, the quest for blockbusters, even the ferocious executive infighting - also made it difficult to exploit Origin effectively. EA could have preserved Origin as a small design house gestating new ideas. Rather than alienating staffers and discarding the valuable Ultima and Wing Commanderbrands, EA could have kept Origin alive in body and spirit, just as it could have preserved the other studios it bought: Westwood and Bullfrog and Maxis and...
But though this was technically possible, it was not imaginable. Like any huge company, EA is risk-averse. The company has every incentive to play it safe and do a competent job on Madden 2009 or Tiger Woods 2017.
A New York Times article on EA (August 8, 2005), "Relying on Video Game Sequels," observes, "Electronic Arts plans to release 26 new games [in 2005], all but one of them a sequel, including the 16th version of NHL Hockey, the 11th of the racing game Need for Speed and the 13th of the PGA Tour golf game." In the article CEO Probst said sequels appeal to Wall Street investors because they have a steady following among consumers. "He added that the company had a goal of putting out at least one entirely new game every year, and had several major original games in its pipeline." Blogger Bill Harris observed, "A 'goal' of one new game a year? Damn, Larry, don't be so crazy ambitious. Remember Icarus."
Beeman says, "You'd like to think a marriage of EA and Origin would result in a merger of their strengths. But instead of combining EA's execution with Origin's creativity, the end result was more like Origin's execution with EA's creativity. EA limited Origin's selection of projects to sequels or other 'proven' ideas, then let Origin run wild. I think this was pretty much the introduction of that meme into the industry, but clearly we still see it today."
"I still think it was possible to make it work," Garriott says now, "except no one made time to make it work, and there were evil elements in the company."
In 1992 Steve Powers found in a Marketing department trashcan a group photo of the entire company. "It was taken on the steps of the Wild Basin building during theUltima VII ship party," Powers recalls. "I scanned it and used it as my Windows wallpaper for years. One by one, as people left or were fired, I Photoshopped a red dot over them, blotting them out of the scene. Most of the dots tended to come in clusters around Christmas. Just before Christmas 1997, I dotted my own face and left. For years I kept the image updated while working for other game studios, and it wasn't until fairly recently that the last face got erased."
Some notable dots:
Wing Commander designer Chris Roberts left Origin in 1996 to found the game company Digital Anvil. Roberts wrote and directed the 1999 Wing Commandermovie (Rotten Tomatoes score: 7%). He released the space game Freelancer in 2003 to modest success, then left Digital Anvil to found Point of No Return Entertainment. So far the name appears apt.
Warren Spector left Origin in 1996 to work for Looking Glass, then run ION Storm Austin. In 2000 he produced the bestselling game, Deus Ex. The genesis of DX was an Origin project called Shooter, which EA cancelled shortly before his departure. "DX could have been an EA title!" Spector says.
Artist Denis Loubet left Origin in 1997 and is now a partner in Iron Will Games, which runs the boutique MMOG Ashen Empires. One of the designers once described it conceptually as "Ultima V for 10,000 players."
In 1998, Don Mattrick opened a $54 million EA Canada development studio in Burnaby. By 2003 it had 700 employees, and Mattrick made plans to add another building. The studio currently produces sports games such as NBA Live, Triple Play Baseball, NHL Hockey, and FIFA Soccer, the best-selling sports game in the world. "Don Mattrick is a champion of the [British Columbia] high-tech industry," said studio president Sydney Williams in a 2000 interview. Last month, in a move that stunned the industry, Mattrick, the heir apparent to Larry Probst, left Electronic Arts after 23 years with the company "to seek other opportunities." EA gave no reason for his departure.
In 1999, four years after Ultima VIII, after colossal labor and at least two complete restarts, Origin released the disappointing Ultima IX. No one at the time realized this would be Origin's last new game. Richard Garriott soon left Origin and founded Destination Games (get it?), hiring most of the Ultima IX team EA laid off. In 2001, Destination metamorphosed into the American branch of Korean online gaming giant NCSoft. NCSoft Austin has published City of Heroes and Guild Wars, and is now struggling through Year Four of a projected three-year development cycle on Garriott's new MMORPG (working title: Tabula Rasa).
EA finally shut down Origin in 2004 and relocated UO to their California studio. The last employee fired was producer Jeff Hillhouse, Richard Garriott's first hire back in 1983. Hillhouse, like many other key Origin employees, worked with Garriott at NCSoft.
Update to the article by Tribal Plague:
On November 11, 2008, Garriott announced his plans to leave NCsoft to pursue new interests sparked by his spaceflight experiences. Later, however, Garriott claimed that the letter was forged as a means of forcing him out of his position and that he had had no intention of leaving. In July 2010, an Austin District Court awarded Garriott $28 million in his lawsuit against NCsoft, finding that the company did not appropriately handle his departure in 2008. In October 2011, the United States Court of Appeals for the Fifth Circuit affirmed the judgment.