The story
Early history (1983–1987)
Nick Alexander formed Virgin Games in 1983 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. The company expanded with the acquisition of several smaller publishers, Rabbit Software, New Generation Software and Leisure Genius (publishers of the first officially licensed computer versions of Scrabble, Monopoly and Cluedo).
Purchase of Mastertronic and rebranding to Virgin Mastertronic (1987–1991)
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 (UK), though growth exhausted its resources after expanding in Europe and acquiring publisher Melbourne House. Richard Branson stepped in and offered to buy 45 percent of Mastertronic stake, in exchange Mastertronic joined the Virgin Group. Later Virgin would acquire also the rest 55% of Mastertronic.
The subsequent merger created Virgin Mastertronic Ltd. in 1988 with Martin Alper (of Mastertronic) as its president which enabled Virgin to expand its business reach overseas. 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 Mastertronic acquisition enabled Virgin to compete with Nintendo in the growing home console market. The new owners then dissolved the Gang of Five internal development team in 1989.
Return to publishing (1991–1993)
To gain a foothold in its newly established European market, Sega Enterprises, Ltd. acquired Mastertronic from Virgin Mastertronic in 1991 while Virgin retained a small publishing unit, named Virgin Games (again). Virgin Games was renamed Virgin Interactive Entertainment (VIE, also known as Virgin Interactive) in 1993. A new London internal development team was set up in 1992.
Hasbro, 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 included Transformers, G.I. Joe and Monopoly. The deal cut off competitors like Mattel and Fisher-Price who were interested in a similar partnership.
In late 1993, Virgin Interactive spun off a new company, Virgin Sound and Vision, to focus exclusively on CD-based children's and family entertainment.
Purchase by Blockbuster Entertainment and Spelling Entertainment (1994–1998)
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. Hasbro went on to found their own game company, Hasbro Interactive the following year. The partnership with Blockbuster ended a year later when Blockbuster sold its stake to Spelling Entertainment, at the time being a subsidiary of Viacom. Viacom was the owner of Paramount Pictures 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.
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In 1995, VIE signed a deal with Capcom to publish its titles in Europe, supplanting Acclaim Entertainment as Capcom's designated European distributor. VIE later published titles released by other companies, such as Hudson Soft.
VIE's U.S. division's American development branch had adopted the name Burst in 1995 via recommendation from Neil Young. Around the same time, VIE's London development branch had adopted the name Crimson.
In 1995 the company expanded their distribution arm over to Spain, by forming Virgin Interactive España SA. In the same year, the company launched a budget reissue brand for their PC titles called "The White Label".
Re-independence and purchase of US operations by Electronic Arts (1998–1999)
Spelling put its ownership of Virgin up for sale as a public stock offering in 1997, stating that Virgin's financial performance had been disappointing. Since Spelling's purchase of the company, Virgin had lost $14 million in 1995 and was expected to post similar losses for 1996.
In 1998, Virgin Interactive's US operations were divested to Electronic Arts as part of its $122.5 million (£75 million) acquisition of Westwood Studios that same year. Electronic Arts also acquired the Burst Studios development studio, which was renamed to Westwood Pacific by its new owners.
VIE's European division though was put out in a majority stake buyout backed by Mark Dyne, who became its chief executive officer in the same year. Tim Chaney, the former managing director was named president.
Purchase by Interplay and Titus (1999–2001)
On February 17, 1999, Virgin Interactive announced they had entered into a distribution agreement with Interplay Entertainment, where Interplay would distribute Virgin Interactive's titles in North America and several other territories including South America and Japan, while Virgin Interactive would exclusively distribute Interplay's titles in Europe, folding their own distribution arm in the process. To coincide with the distribution agreement, Interplay acquired a 43.9% minority stake (Initially a 49.9% stake) in the company. The deal was made as part of Interplay's attempt to gain profits, and the deal did not include publishing, which would remain as stand-alone entities.
In July 1999, French publisher Titus Interactive announced plans to purchase 50.6% of Interplay's shares. Shortly after the purchase, they announced they would purchase a 50.1% majority stake in Virgin Interactive, with the publisher's shareholders and management retaining a 6% stake. The following year in May 2000, Titus acquired the shareholders' 6% stake, with Titus now holding 56.6% in Virgin while Interplay retained their 43.9% stake. Titus also announced on the same day that Virgin Interactive would now distribute its titles in Europe and replace their standalone distribution arm. The deal was made following a similar distribution agreement in North America that would allow Interplay to market Titus' titles in the territory. A week later, Virgin signed a deal with Swing! Entertainment Media AG to distribute their titles in all European territories.
Virgin's presence outside Europe at this point was almost non-existent, with only a few titles such as Viva Soccer and Jimmy White's 2: Cueball, which was distributed in the North American market by Bay Area Multimedia instead of Interplay. However, in 2001, the North American branch of Titus; Titus Software, announced to resurrect the Virgin Interactive brand in North America to release several of Virgin's existing European PC releases as $20 budget titles.
Acquisition by Titus, sale of Spanish operations, rebranding, and fate (2002–2006)
On 16 April 2001, Titus announced they had expanded their shares in Interplay to 72.5% and purchased their stake in Virgin Interactive, making Virgin a fully owned subsidiary of Titus Interactive, S.A. The deal was done to simplify their publishing and distribution sides, with Virgin continuing to be Titus and Interplay's exclusive European distributor. The developer Crimson, who was the London's development branch, was renamed to Point Blank by its new owners during the development of Falcone: Enter the Maelstorm, which was subsequently cancelled.
On June 11, 2002, Titus announced they had accepted a management buyout of Virgin's Spanish operations; Virgin Interactive España SA, by Virgin's former CEO Tim Chaney along with former Spanish president and founder Paco Encinas. The deal was done for Titus to focus more on the UK, French and German subsidiaries. The business was renamed as Virgin Play in October, and would continue to distribute Titus and Interplay titles in Spain.
On July 1, 2003, Titus announced that Virgin Interactive would be renamed Avalon Interactive, with the French, Benelux and German operations soon following afterward.
In August 2004, the company launched a PC budget range titled "Just2Play" with Dutch publisher Xing Interactive for the UK and Benelux territories. The range was aimed to be similar to Avalon's White Label range, but with the addition of titles from Xing Interactive.
Closure
In January 2005, Titus Interactive filed for bankruptcy with €33 million ($43.8 million) debt. Avalon France and all of Titus' French operations were closed down immediately, while the UK branch continued to trade as Titus' non-French operations were unaffected. Avalon's UK operations were dissolved by November 2005.
From Wikipedia’s article on Virgin Interactive Entertainment, shared under CC BY-SA 4.0.3