This article is really long and I read it in fits and starts over the last month, even though I’m genuinely interested. Still, there’s lots of good stuff in there. Here are three quotes, first about Madden missing quite the opportunity.
Hawkins: “You stayed with me. EA is about to have an IPO [initial public offering]. You can have as much stock as you want.”
Madden: “What do you mean by ‘have’?”
Hawkins: “Well, you have to buy it — at the IPO price.”
“Hell, I’m just a football coach,” Madden says now. “I pointed with my finger, all knowing, and said, ‘I gave you my time. I’m not giving you my money.’ I showed him!”
From 1989 to 1999, EA’s share price went from $7.50 to $70. Madden laughs. “That was the dumbest thing I ever did in my life.”
This bit is about some astute corporate shenanigans.
Secretly, Hawkins assembled a team to reverse engineer the console — that is, figure out a way to make EA’s games run on Sega’s hardware without its technology or approval as a way to avoid licensing fees altogether. Publicly, he began negotiations with Sega, once meeting with the company’s executives while the reverse-engineering project went on in a nearby room. The gambit was risky: Once Sega caught wind of EA’s plan, it likely would sue — in part to discourage other software companies from following EA’s lead, in part because reverse engineering without copyright infringement is technologically vexing. Hawkins’ team, however, managed to pull it off.
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Meanwhile, Hawkins revealed his reverse-engineering project to Sega and offered a deal. Let’s team up against Nintendo. Share the glory. You can sue, but we did the tech fair and square and have great lawyers. So make us an official licensee. And give us a reduced rate. Sega normally charged an $8 to $10 fee per game cartridge. Hawkins asked for $2 per game and a $2 million cap. Negotiations stalled.
“Only two times at EA did everyone in my management team pull me into a room and say, ‘We all disagree with you,’” Hawkins said. “The first time was about not having private offices. The other time was this.”
He stuck to his guns. Ten days later, on the eve of a major consumer electronics show in Chicago, Sega relented, afraid EA would sell its reverse-engineering knowledge to other software companies and torpedo the Genesis’ entire business model.
This next quote reminds of productivity software development. Once you start something, you can’t stop or people go nuts.
Cummings: “Updating player gear is such a pain. Like a guy changing from a single wristband to a double. It never stops.”
Young: “We have people that just catalog this stuff every week. A player will start wearing team-colored gloves. A team will put a special logo on the 20-yard line for Week 8. Another team won’t wear a special patch. And if we don’t have that, it ruins the game for some people.”