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id software rejected $105 million bid from Activision

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Amused_To_Death

Member
By GARY MCWILLIAMS
Staff Reporter of THE WALL STREET JOURNAL
September 27, 2005 4:04 p.m.

HOUSTON -- Id Software Inc., the closely-held developer of the Doom and Quake computer games, last year rejected a $90 million offer from videogame publisher Activision Inc. for its three most popular programs, according to a suit filed by a co-founder of the Mesquite, Texas, developer.

The suit, by id Software computer artist and co-founder Adrian Carmack, claims Santa Monica, Calif.-based Activision last fall bid $90 million for its Doom, Quake and Wolfenstein game programs and considered paying $105 million for the entire company. The talks ended in October, 2004, after Id's four other owners rejected the offers as too low, according to court documents.

Todd Hollenshead, chief executive officer of 14-year-old id Software, was unavailable to comment, a spokeswoman said. William Chardavoyne, Activision's executive vice president and chief financial officer, didn't respond to messages left at his office. Activision, the second largest independent videogame publisher after Electronic Arts Inc., had $1.4 billion in revenue last year.

Papers filed in a suit asking the court to void Mr. Carmack's employment contract reveal a messy squabble among the five highly-paid owners. Mr. Carmack, who was fired as an employee and director earlier this year, claims that executives tracked the hours he worked at the company, refused him access to board documents, and last year halted a long-standing practice of paying out profits in dividends so he would receive less than other directors.

The court documents provide an unusual glimpse into the small but very profitable company. Last year, id Software earned $10.5 million on revenues of $30.5 million, according to financial statements filed with the court. Mr. Carmack and co-founder John D. Carmack, who are unrelated, were paid about $3.5 million a year between 1998 and 2003.

Id's wealth stems from its first-person shooter games. The company sells about 15 different programs in addition to the better known Doom, Quake and Return to Castle Wolfenstein programs, and licenses its graphics software to other game developers.

Adrian Carmack claims the decision not to sell the company was part of an effort to force him to sell his shares back at a fraction of what he would have made in a sale to Activision. Under terms of a contract he has asked the court to void, Mr. Carmack would have to sell his 41% stake in the company for $11 million, below the $40 million he might have reaped from Activision.

In a filing earlier this month, he claims the other owners fired him after he refused an offer to be bought out for $20 million. The Activision offer was revealed by a filing by Mr. Carmack seeking to have his employment contract declared invalid. He contends Id's other owners rejected the Activision offer so they could acquire his shares as a price below what they might later fetch.
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http://online.wsj.com/public/us
 
What are the odds that two guys with the name Carmack would co-found a smallish company like Id and not be related? Weird...
 
GitarooMan said:
What are the odds that two guys with the name Carmack would co-found a smallish company like Id and not be related? Weird...
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Yeah, that's always a trip whenever I read about Adrian.
 
$500M would be more like it. id made tons of money on Q3 engine and while nowadays Epic stole their thunder with UE3 who knows what future holds...
 
why would anyone want to sell if they are making $3.5m each year? I mean a large lump sum of money is nice, but $3.5m a year? COME ON!!
 
According to that article, id made $10.5 million in profit on about $30m in revenue. Activision offered them $90m and would have offered $105m (again, according to that article--I have no idea what's true and what's not). That means Activision would have paid ten times as much as id brings in in profits for a year. That's a hell of a deal for the id guys. Most companies get offered about three times their total annual profits (or is that their total annual revenues?)

Eh, the hell with it.
 
You have to remember the guy pull more then the profit the all pull a salary out of the company as well. Hence they make 3.5 a year.
 
Companies like Valve, Id, Epic, Bioware, Blizzard and to name a few of the independents would never sell no matter how much offered. In fact from what I've read somewhere, Microsoft once offered to buy Id for a very big lump sum, but they turned down the offer.

In the end, none of these companies would never sell because they're essentially giving up the freedom they enjoyed as independent. Not only that, but none of of these companies don't have any problems getting distribution deals.

The only independent to ever cave and be bought was Monolith which was boughtout by Warner Bros. Its pretty sad when you think about since Lith is the type of developer thats proven can make it on thier own.
 
I didn't know Adrian Carmack isn't a part of the company anymore. I guess he went the way of John Romero and started slacking off.

Whats the current staff size at ID and who are the new hires?
 
Andrew2 said:
Companies like Valve, Id, Epic, Bioware, Blizzard and to name a few of the independents would never sell no matter how much offered. In fact from what I've read somewhere, Microsoft once offered to buy Id for a very big lump sum, but they turned down the offer.
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Blizzard is owned by Vivendi Universal Games.
 
Companies like Valve, Id, Epic, Bioware, Blizzard and to name a few of the independents would never sell no matter how much offered.
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Blizzard aren't independent and are 100% owned by VUG.
 
Andrew2 said:
Companies like Valve, Id, Epic, Bioware, Blizzard and to name a few of the independents would never sell no matter how much offered. In fact from what I've read somewhere, Microsoft once offered to buy Id for a very big lump sum, but they turned down the offer.

In the end, none of these companies would never sell because they're essentially giving up the freedom they enjoyed as independent. Not only that, but none of of these companies don't have any problems getting distribution deals.

The only independent to ever cave and be bought was Monolith which was boughtout by Warner Bros. Its pretty sad when you think about since Lith is the type of developer thats proven can make it on thier own.
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Keep on dreaming. Everybody has a price.
 
I think some of those companies could be bought, but we were guessing how much it would cost to buy someone like Epic, who pretty much prints money right now. I mean that would be a $150m or $200m for that company alone, but if a major publisher or 1st party bought Epic their their engine licensing would dry up.
 
The suit, by id Software computer artist and co-founder Adrian Carmack, claims Santa Monica, Calif.-based Activision last fall bid $90 million for its Doom, Quake and Wolfenstein game programs and considered paying $105 million for the entire company. The talks ended in October, 2004, after Id's four other owners rejected the offers as too low, according to court documents.
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id is only worth 15 mill? If they sold their core franchises they could build another suite of $100 mill titles in 10-15 years no problem.
 
element said:
I think some of those companies could be bought, but we were guessing how much it would cost to buy someone like Epic, who pretty much prints money right now. I mean that would be a $150m or $200m for that company alone, but if a major publisher or 1st party bought Epic their their engine licensing would dry up.
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Look what happened to Criterion's Renderware after EA bought them out. EA spent $48 million on Criterion BTW.
 
Borys said:
Keep on dreaming. Everybody has a price.
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11.jpg
 
I wonder if selling the properties was stipulation free? Or I wonder if they tried to get access to future id engines for those properties or something in exchange for the money.... If it was string free then it's a sort of strange decision by id. Why not let those properties go and create new ones..besides most fps players probably follow the developers and the games they make instead of the names of the titles....

OT
cruisehappyAv.jpg

bj33.jpg


Is that a Tom Cruise character in a game?
 
Ferrarisimo said:
According to that article, id made $10.5 million in profit on about $30m in revenue. Activision offered them $90m and would have offered $105m (again, according to that article--I have no idea what's true and what's not). That means Activision would have paid ten times as much as id brings in in profits for a year. That's a hell of a deal for the id guys. Most companies get offered about three times their total annual profits (or is that their total annual revenues?)
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id could easily raise $300M in capital by launching an IPO.
 
nightez said:
So three years ago Rareware was worth 6 times (600,000,000+) what ID software is worth now today :lol
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Microsoft acquired Rare for 600 MILLION DOLLARS? :lol

Wow. And people wonder how Nintendo has so much money...
 
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