Mindscape (company)

Mindscape was founded in October 1983 as a wholly owned subsidiary of holding company SFN Companies.[1][2] Mindscape's founder, Australian entrepreneur Roger Buoy, had previously been a computer analyst for Rolls-Royce Limited and later worked for the software division of Scholastic Inc., before being hired by SFN in October 1983 to set up Mindscape.[3][2] For Mindscape, Buoy acted as president and chief executive officer (CEO).[2] Mindscape released its first product in April 1984.[2] Early games published by the company 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 Assoc., 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 also acquired the assets of Roslyn, New York-based company Learning Well.[7] Because 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] At this point, Mindscape had 74 employees.[7]

With sales of $12 million, Mindscape had become profitable for the first time in the fouth quarter of 1986; it started publishing black numbers by 1987.[7][10] In March 1987, Mindscape acquired the software division of Holt, Rinehart and Winston formerly known as CBS Interactive Learning, with all operations moved 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 its bank loan debts of $9.8 million.[10] The IPO was completed that same month, with the company commencing trading over-the-counter, and the first shares were issued by July.[11][12] Bob Ingersoll and Dennis O'Malley were appointed vice president (VP) of marketing and VP of sales, respectively, in May 1987.[13] In November, Mindscape signed a lease of 21,000 square feet (2,000 m²) of office space in Wheeling, Illinois, for $236,000.[14] Robert A. Drell, formerly of Dresher Inc., became VP of finance and chief financial officer in October 1988.[15]

In December 1989, video game company The Software Toolworks reached an agreement to acquire Mindscape, exchanging every Mindscape share for 0.4375 of a share in newly issued Toolworks common stock.[16] The deal was completed on March 13, 1990, and valued at $21.2 million.[17][18] Mindscape had been one of the approximately 40 companies licensed to develop for Nintendo video game platforms, which was a major reason for the acquisition.[17][18][19] The two companies merged, and Buoy joined Les Crane on Toolworks' company board.[20] Following the acquisition, Mindscape became Toolwork's division working exclusively on games for Nintendo platforms, which sharply increased Toolwork's earnings.[17][18][21] Subsequently, in March 1994, Pearson plc agreed to acquire Toolworks for $462 million, with the deal closing on May 12, 1994.[22][23]

Pearson was criticized for overpaying in the acquisition, and the acquired company lost $69 million in its early years under Pearson.[24][25] By November 1994, Toolworks had assumed the Mindscape identity.[26] The same year, Mindscape acquired video game developer Strategic Simulations.[27] In September 1995, it acquired Micrologic Software from Emeryville, California, to undisclosed terms.[28] In January 1996, John F. Moore became CEO after leaving the same position at Western Publishing.[29] In 1997, Mindscape acquired software company Multimedia Design.[30] In November, it laid off 12 developed staff as a cost reduction measure.[31] In its final year under Pearson, 1997, Mindscape become profitable again, generating $2.7 million.[32]

Pearson proceeded to sell Mindscape to The Learning Company (TLC) in March 1998 for $150 million in cash and stock.[33] A waiting period was temporarily imposed by the Federal Trade Commission and subsequently terminated the same month.[34] TLC expected that its stocks would rise $0.05 per share as a result of the acquisition, while Pearson lost around $347 million.[32][35] Later that year, when TLC integrated its Broderbund division, Mindscape took over Broderbund's productivity, reference and entertainment brands.[36] TLC was acquired by Gores Technology Group in 2000 and its game brands were reformed under a new entitiy, Game Studios, in January 2001.[37] The same year, former TLC-Edusoft executive Jean-Pierre Nordman bought out Mindscape from TLC, installing it as a separate entity in Boulogne-Billancourt, a suburb of Paris, France, and assuming a managerial role.[3][38]

By December 2009, Thierry Bensoussan had become the managing director for Mindscape.[39] The company opened a intnernal development studio, Punchers Impact, in Paris to develop multi-platform digital download games.[39] The studio's managers, Guillaume Descamps and Jérôme Amouyal, left the studio less than a year later, in September 2010, to found a new studio, Birdies Road.[40] Punchers Impact developed two games—Crasher, a racing game, and U-Sing, a music game. U-Sing performed well at retail, but the cost of music licenses for the game had a severe impact on its revenue, while Crasher underperformed in general.[41][42] As a result, Mindscape announced on August 10, 2011, that it had closed Punchers Impact and laid off its 40 employees, while itself would effectively exit the video game industry.[43] Some regional subsidiaries, such as Mindscape Asia-Pacific in Sydney, Australia, continued operating in the video game business as entities independent from Mindscape.[44]