ID Software and Video Games

Fortune Small Business writes about one of the first companies to distribute shareware games, id software, the creators of Doom:

The videogame business has changed significantly since id launched the original version of Doom in 1994. Today id remains a maverick in an industry where most other independent game developers have been bought out by powerhouse publishers such as Microsoft and Vivendi Universal. (According to Hollenshead, id is profitable, with $20 million in sales last year.) Of the top 50 console games of 2003, only threeSOCOM, SOCOM II, and Star Wars: Knights of the Old Republicwere created by independent developers. Today’s games, with their complex graphics and realistic effects, have become extremely expensive to producein some cases costing as much as $30 million. That’s a hefty sum for a small firm such as id.

Moreover, most videogame companies launch multiple titles each year, hoping one will be a hitmuch as a Hollywood studio releases dozens of films in search of that one blockbuster. But id, which launched its last game, Return to Castle Wolfenstein, in 2001, is betting the company on its latest version of Doom. Period. So far, that kind of faith has paid off: Over the past ten years co-founder John Carmack’s technology and the warped minds of the id creative team have run up a perfect track record. Every one of their games, from Wolfenstein 3D to Quake III, has been successful. But can a reliance on creating a nonstop stream of megahits be considered a prudent business plan?

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Rajesh Jain

An Entrepreneur based in Mumbai, India.