Tuesday, 27 March 2012

An Interview with Anthony Guter

As I’ve previously mentioned, one of my main inspirations for starting this blog and my collection was the article penned by Anthony Guter in Retro Gamer Issue 1. Anthony was Financial Controller at Mastertronic during its golden era and is responsible for the comprehensive history of the company that can be found on his website.

Anthony was kind enough to answer some questions about his time at the company and share a few personal memories too, so read on for an insight into the inner workings of the budget software giants...

How did you come to work for Mastertronic and what were you employed to do?
I answered a job ad in the Financial Times in 1985. I was a Chartered Accountant and was been working in the automotive parts industry for a large UK division of a very large US global company, and it was clear my career wasn’t going anywhere and that my interests were with smaller businesses. I was intrigued at the idea of working in the computer games biz.
Mastertronic employed me to run everything to do with day-to-day finance and accounts, including managing bank accounts, paying suppliers, running the payroll, doing VAT returns, preparing monthly accounts and cashflow forecasts and acting as company secretary. As part of this I designed and ran the systems for sales and royalty accounting which brought me into direct contact with every one of our games authors and rights-holders.

Did you have any familiarity with the gaming industry before you started there?
I knew nothing directly about it but I had been using an Apple II for 4 years and was the first person in my company in the UK to use any form of micro to do financial work. I was one of the first users of Visicalc in the UK and this made me a real rarity amongst my fellow accountants. I had also played the odd game on it (Galactic Empire, a strategy game, was the first one I bought with my own money) and had learned a little bit of BASIC by examining the code behind the free games that came with the computer. I read computer magazines and also looked at the games reviews. When Football Manager first came out I experimented with writing my own version on the Apple and I also fooled around trying to write adventure games and things like Monopoly. I was never going to be a games programmer but it gave me a little insight into how it was done. I sometimes used to take the Apple home at weekends to play on it, but I never bothered with a “home computer” – I thought tape-loaded games must be rubbish. The Apple of course only worked with disk drives, as did all US machines.

Anthony's early computing experience came on the Apple II

What were your initial impressions of the company and what they were trying to achieve?
My boss, Frank Herman, never disguised his ambition – to build up the business and the brand name and then to sell out either via a stock exchange listing or to an institutional investor. The business strategy was to forge strong links with retailers and to control the supply chain (i.e. manage each step from sourcing to manufacture to warehousing to wholesale distribution and to retail shelf stocking). Some of the money to start up Mastertronic came from some investors who I think had backed Frank or Martin Alper (one of the other directors) in the video distribution business. These guys also wanted to make a quick profit and had no interest in the long term.
The ethos in the early days was also very firmly fixed on budget games – we did not try to compete with full price publishers in terms of the depth of games, the packaging or the advertising. Judging by the feedback from the customers this made us very popular. But when the chance came to buy Melbourne House, much to my surprise at the time, Frank went for it. So it was always about business. There was no romance in it – it was make money or do something else. In this I’m sure we were no different to the corporates like Amsoft, Firebird, Mirrorsoft or Virgin. We were different to software-led businesses where they would start with an idea, create the game then try to market it. We never got hung up trying to make an unsellable product work because we did not create the products in the first place.  
However there was a fun atmosphere in the office and because we were answerable to nobody then whims could be indulged, such as sponsoring a car at the Le Mans 24 hour, which was arranged at incredibly short notice. And there can't be many businesses where if someone is not at their desk and is needed, you open the window and shout for them in the café across the road!

How much did it cost to produce each game and how many copies need to sell for it to be profitable?
You could duplicate a tape cassette and put a printed inlay in it for about 30p each provided you duplicated a few thousand at a time, and distribution into and out of the warehouse was say 10p. A £1.99 game might sell for 90p or maybe a bit more to the smaller distributors. Artwork and other programming such as a loading screen would be around £500. So a budget game could make money on very low sales – on 1000 units we would be just about breaking even on the production costs. But we would need a lot more than to cover our overheads. A sale of 5000 units would comfortably do that and that was easy to get in the early days.
Remember that we bought everything in – we employed no games programmers, only a couple of techies who assisted in testing and format conversion issues. So if a programmer chose to spend weeks and weeks of his own time writing a game, that was his problem. He still got the standard deal when he finally turned up at our office with the finished product.

Was there a standard contract with the programmers or were deals done on an individual basis?
The standard deal for £1.99 games was 10p a unit royalty and anything from £500 to £2000 advance. We paid more to the Darling brothers and Mr. Chip Software and gradually the rates went up generally. When the MAD range started selling at £2.99 the basic royalty was 15p. When we moved into full price software a lot of the deals were based on a percentage of the sales revenue rather than a unit rate. I think we may have paid a little less for exports. We would have paid more for disk versions of a tape game but I can’t remember how much
In the later 1980s we dealt more with software houses like Binary Design, Icon Design and Palmer Acoustics and typically paid them £10,000 at a time as an advance for 4 or 5 titles.

The Darling brothers provided many early Mastertronic games

How much on average would a programmer receive for their game?
I can’t answer for the programmers who were employed by software houses, such as Mr. Chip or Binary Design. But if you were, say, David Jones, you would have received over £30,000 for Finders Keepers (in all formats) and £22,000 for Spellbound. Not bad for the 1980s. A typical game might well sell 40,000 units so we would pay at least £4,000.

Is it true that when word got around about Mastertronic, budding programmers would call into the offices to demo their games?
Yes it is quite true. People would ring the bell as well as send games in the post. Established authors would also call in with work in progress and of course they did not necessarily do a deal with us every time but a lot of them liked us because we gave them a very quick answer and we paid advances and royalties fairly and on time.

How did the deals come about with the likes of Activision and Ultimate to re-release their games on the Ricochet label?
The deals happened once our distribution deals with retailers like Woolworths, Boots and Toys’R’Us were in place. We could assure the other publishers of reasonable sales but also they were stuck because if they did not deal with us, it was very hard for them to get their own budget re-releases out there. We had a team of merchandisers who stocked shelves in many leading retailers, something I believe no other games publisher had. For the same reason we set up Rack-It for Andrew Hewson.

Did Mastertronic have any influence over which games were re-released or did the contributing companies dictate this?
I don’t know who chose the product but I am fairly sure that we would have had the last word – we were the ones putting the games out on to the shelves and we had to choose titles that would sell. So I guess that we cherry-picked the best titles.

The company released several arcade conversions of Namco games (Bosconian, Motos, Gaplus). How did the deal with Namco come about?
Probably via Martin Alper who had set up Mastertronic USA in California and was building relationships with arcade games producers. We released our own arcade machine in 1988 called “Arcadia” but I don’t know much about it since it was only sold in the USA.

How did the company change when Virgin took over, and why did you ultimately leave?
The first obvious change was that we became much larger and the new company had the full-price arm of Virgin Games, including six full time programmers plus the growing Sega distribution business as well as the Mastertronic budget business and Melbourne House. The working atmosphere was much the same for most people. I didn’t like it - having joined Mastertronic to work with a small company I was now back in the big company sphere and there was a financial hierarchy over me going up through Virgin’s video division. There was a lot more politics.
I was actually made redundant in 1990 but then when Sega bought out its distribution business I was offered the job of IT Manager of Sega Europe. So I did not really leave the games side, it was a case of the business had changed and I moved to the bit that was offering me continued employment. At last all that early messing about with Apples was paying off!
In 1995 I was again threatened with redundancy as Sega Europe got into difficulties but was able to move to the UK amusement arcade division of Sega as IT Manager. I finally left the Sega Group in 1998 when it was obvious that my job (and indeed much of the company) was not going to last much longer, and I left to work for a music management agency as Finance Director and have been much happier ever since.

What legacy do you think Mastertronic has left on the gaming industry?
No idea - budget games no longer seem to be relevant. Kids are now expected to pay £44 for a console game. But funnily enough the budget market has been reborn in the shape of mobile phone games where the standard price seems to be, oddly, around £1.99.
Perhaps also Mastertronic kick-started the careers of some of today’s programmers and helped encourage a generation of kids to regard coding and games design as worthwhile activities. It was all rather looked down on back then but today the industry qualifies for financial support on a par with the film industry, if I understand the Budget announced on 21 March this year correctly.

Two games that Anthony recommends... and one that he doesn't!

Which original game do you think offered the best value for its £1.99 asking price?
I think this is really asking me what were my favourites. Kane, Finders Keepers, The Captive, LA SWAT, Street Surfer and Curse of Sherwood were games I’d be happy to replay.

And which do you think was the worst?
Pigs in Space, Bionic Granny and any game where you lost your lives almost at once, such as 1985 or Human Race.

1 comment:

  1. Great interview ! Also, many thanks to Anthony for originally sending me a list of releases for the Commodore 64 that I am still using to help collect titles on the Mastertronic label.