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ASPYR MEDIA TAKES AIM AT PC MARKET
Copyright 2001 www.tombraiderchronicles.com

[ October 14th 2001 ]

Austin's Aspyr Media Inc. has taken quite a bite out of the Macintosh gaming market, and now it's hungry for more. In November, the Mac game publishing company plans to release a new game for personal computers - a move that could boost the company's revenue by 50 percent.

In preparation for the move into the PC market, the company recently relocated from 1,600 square feet in the Central Business District to 4,000 square feet in the West Campus area. The company, now based at 2404 Rio Grande St., employs 12 people and soon will double its tech support team from five to 10 to back its new PC title, says Michael Rogers, president of Aspyr.

Since its founding in 1996, Aspyr has gained about 35 percent of the Mac market with titles such as "Tomb Raider," "The Sims," "Tony Hawk's Pro Skater II" and "Madden 2000 Football," says Jeff Baietto, Aspyr's vice president for marketing. The company signs royalty agreements with companies like England's Eidos PLC and Redwood City, Calif-based Electronic Arts Inc. that produce and develop the games for PCs. It then publishes those games for Macs, creating the advertising and marketing momentum to sell those games to a Mac audience.

Aspyr only markets the software. Austin-based Westlake Interactive Inc. writes the code for the games. Suellen Adams, business manager of Westlake Interactive, says the move into the PC market might reduce some of the financial risks that Aspyr assumes when it produces a Mac title. "Publishers have a lot risk when they bring a Mac title to market, because there are fewer users," Adams says.

"There is never any guarantee about what will sell. Gamers are fickle. I think just because you have a bigger user base, you'll sell more copies [of the PC game]." Adams says that although analysts and others are predicting the death of PC games at the hands of gaming consoles such as Microsoft Corp.'s XBox and Nintendo Co. Ltd.'s GameCube, there's still money to be made in Mac and PC games.

Michael Rogers, president of Aspyr, says his company is a niche player and can expand in areas where other gaming companies no longer are heading. As companies such as Electronic Arts proceed into the game console business, those companies will leave the PC market to others, Rogers says.

Shawn Milne, a research analyst at Old Greenwich, Conn.-based SoundView Technology Group Inc., says the Mac market barely registers compared with the PC and console markets. PC games make up about one-third of the entire gaming industry, he says, but PC growth is slowing compared with console games. "There is a still a very high gross-margin business for the PC games," Milne says. "Right now, there is more online gaming played through the PC, but the consoles are becoming Internet-ready."

Rogers estimates the Mac gaming market is about 3 percent to 5 percent of the entire software industry. The Washington, D.C.-based Interactive Digital Software Association reports the U.S. software gaming market topped $6 billion in 2000. In releasing its first PC game, "iPuppet Presents Colin's Classic Cards," Aspyr had to consider whether its move into the PC market would hurt its royalty agreements with companies such as Electronic Arts and Eidos.

Baietto says Aspyr will review its plans for future PC games with its partners and will consider distribution deals with them. Rogers declined to disclose revenue for the company, but Aspyr has been profitable for the past three years. Other than friends and family investors, the firm hasn't received outside investments, he says.

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