A HERO OR ZERO
GAME FOR EIDOS CHIEF
Copyright 2002 www.theindependent.co.uk
[ August 5th 2002 ]
McGarvey grabs a promotional poster of the new
Tomb Raider computer game from the wall of his
bright, modern office. This is it, he says excitedly
pointing at the scantily clad figure of the Lara
Croft character flying through the air over the
strapline Lara Croft Tomb Raider: The Angel of
Darkness. Is that the same woman as last time,
I enquire? "No. We have to change the model every
year. The whole fame thing gets to them and, well..."
he says, his voice trailing off. Whatever can
runs Eidos, the computer games publisher behind
the Tomb Raider series. Appropriately, he looks
like he's just walked out of Hollywood central
casting. Aged 36, the casually dressed Californian
has the light tan and uniform features of the
all-American boy. It comes as no surprise that
he played college-standard American football in
his youth before giving it up after a tendonitis
problem in his throwing arm. "I was a quarterback,"
he says sitting in his office in Wimbledon, south-west
London. "It's the hero or zero position. But I
was too small, really. These guys are six feet
nine these days."
sense, he is in the hero or zero position again.
Eidos has been dogged by a catalogue of errors
including missed launch dates, profits warnings
and fears over a weak roster of games. Incredibly,
the so-called "Golden Age of Gaming", which has
seen the Microsoft X-Box and the Nintendo Gamecube
being launched into a market already bubbling
with the Sony PlayStation2, seems to have passed
Eidos by. Its shares are bumping along close to
their all-time lows. Things have got so bad that
investors must sometimes fear they would one day
see the headline "Eidos: GAME OVER" flashing on
business is at a crucial stage. With a balance
sheet boosted by a £50m rights issue last year
and a better launch schedule of new games, the
future should be brighter. The Angel of Darkness
Tomb Raider game (the sixth in the series) is
scheduled for launch in mid-November on Playstation2
and PC, followed by a second film in June 2003.
But if there are any slip-ups Eidos is likely
to lose its independence. And Mr McGarvey, chief
executive since November 2000, will be on the
next plane back to the America.
labelled the one-product company, which we were
for many years," Mr McGarvey concedes. "But it
is very difficult to be a public company, that
is global without having a big franchise. We still
wanted Tomb Raider as a significant part of our
business. But we stalled a bit in generating other
content. We'd done five in a row (Tomb Raider
games) and the rest of our list got a bit thin.
But we were all a bit new to the business and
we felt Tomb Raider was strong enough to carry
our business through that period."
turned out, it wasn't. A game based on the TV
programme Who Wants to be a Millionaire had one
good year but then Millionaire 2 bombed. There
were other problems as well. The finance director
left and took a long time to be replaced. Then
takeover talks with Infogrames of France took
six months and proved a damaging distraction.
Since then, Mr McGarvey has tried to focus on
business basics rather than chasing the next big
thing. "We've been reducing costs and focusing
more on leveraging the content we have. We've
recapitalised the company and are still investing
a third of revenue in R&D. Another 8 to 10 per
cent goes on advertising and marketing."
the pipeline of games launches looks better. As
well as Tomb Raider, Eidos has Timesplitters 2,
Hitman 2, Championship Manager 4 and Deus Ex 11
coming up. Hopes are high too for Fear Effect,
a game based on two women detectives who develop
a love interest in each other. "That kind of thing's
just right for our demographic," he says. Ninety
per cent of game customers are 18 to 25 year old
knows he has much work to do to raise the company's
standing in the City. "There has clearly been
a credibility issue and we need to close the gap,
he admits. "Slippage (delay of game launches)
has been one of the key things people have focussed
on and we are addressing that. We were so close
to making a profit last year. But Millionaire
just fell on its face." After last year's thumping
£96m loss analysts are forecasting Eidos to record
reduced losses of £21.7m next month for the 15
months to June. But profits should hit £12m-plus,
in the current year, they say.
says Lara Croft still has plenty of legs and will
run and run. "There are older characters than
her. Look at Super Mario and Sonic the Hedgehog.
Mickey Mouse still seems to work. Spiderman still
seems to work. Content can be robust if you are
in Pennsylvania, Mr McGarvey moved to Seattle
at the age of two where his father worked for
a company called AMP, selling electrical components
to corporate customers such as Boeing. Aged eight
he moved to San Jose, southern California when
his father set up his own management consultancy.
University days were spent at the campus in San
Diego where he studied marketing. But he was already
imbued with the work ethic and, like Angus Monro,
the former Matalan chief executive, started off
as a shoe salesman.
my way through college at Nordstrom's (the department
store retailer), selling ladies shoes. It was
a great introduction to the working world because
their approach to the customer was just fantastic.
They would always take a pair of shoes back if
someone complained, even if the customer had worn
them. I sold so many shoes that I made $30,000
one year." After a spell working for an electronics
company ("it wasn't quite as sexy as I thought")
he quit to go into the computer games business.
"I started at Domark, an English company in the
US. Nine months later it merged with Eidos and
I later took over the US office."
he was asked to move to the UK. "I was reluctant,
but they said it would just be for a year. Five
years later, I'm still here." He says he loves
the British sense of humour and that "culturally,
it's great." Predictably, though, he hates the
weather. "Then on Monday when we had good weather,
our air conditioning broke," he says in disbelief.
"It was 96 degrees in here."
happy enough to stay, though, and expresses confidence
that Eidos can remain independent despite recent
speculation about take-over interest from another
French rival, Ubi Soft. "I don't think we're going
to see a lot of consolidation right now," he says.
"Is it (a take-over) possible? Maybe. Is it inevitable?