SaaS Interviews with CEOs, Startups, Founders
1107 Activision Blizzard CEO: ICO's are Just Like Selling Digital Swords in Mortal Combat!
05 Aug 2018
Chapter 1: What inspired Howard Marks to take over Activision?
he would have listened to Steve Jobs earlier on, started building on the Mac earlier, but he's had some success of his own, going in and grabbing Activision in 1991, had a bankruptcy at a small court in Long Island out there for 400 grand for 30%, then restructured the whole company, put it as his own team, grew it over six years to over 200, 300 million bucks in revenue.
He obviously has now left that company, took over another company in the gaming space, ended up doing some work with Walt Disney, now working on again how ICOs,
and how ICOs are very similar to back in his Mortal Kombat days in the gaming industry, helping people raise capital, whether that's just investors putting in money via their credit card, or again, raising via ICOs and using the blockchain. This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn.
Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million.
I had no money when I started the company. It was $160 million, which is the size of many IPOs.
We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Howard Marks.
Before Acclaim, Mark was the co-founder of Activision Blizzard and chairman of Activision Studios from 1991 until 1997. As co-founder, former board member, and executive vice president of video game giant Activision, he and a partner took control in 1991 and turned the ailing company into the 50 billion market cap video game industry leader it is today.
As a games industry expert, Mark built one of the largest and most successful game studios in the industry, selling millions and millions of games. Mark, Howard, are you ready to take us to the top? Right, I am. All right. Gaming, especially at Activision, seems so much cooler than Start Engine. What is attracting, what's this comparison between ICOs and gaming? Are they the same thing?
It is in a way very strange that it is. And I'll tell you why.
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Chapter 2: How are ICOs similar to the gaming industry?
If anybody who's listening understands cryptocurrency, blockchain, and all of this technology, it all existed in the game industry before cryptocurrency became popular. But Bitcoin came out in January 2009. Before that, it turns out all the virtual currencies were in games. So for example, you would go in a game and you get a sword. It's worth $50,000. What a sword.
And then you would sell it to someone else for in-game currency or actually cash on PayPal. And so the game industry, in a way, from where I come from, For us, virtual currency, cryptocurrency, that was already in existence.
Take me back because it would be very stupid for me to have the former Activision guy on the show and not ask about this. In 91, what did you see in an ailing company as an asset that gave you the courage to go in and take it over?
Well, it's a great story. What happened was We were in the software business. At that point, I don't know if you remember, CD-ROM software, personal computers. That was a world totally different than today. You had the computers at home and the computers at work. They were not the same. And we were looking for a business to grow.
And we saw Activision as a publicly traded company on the NASDAQ going bankrupt, having a huge problem with their cash flow. They had over close to $20 million in debt. They had no cash. They were bleeding. And we said, you know what? Let's see if we can take it over. So we bought 30% of the company from one investor who was a venture capitalist. He was like, you know, I'm out.
So we paid that, I think, 400 grand.
By the way, was that a private deal or was this still when it was public?
It was public.
Okay, so it was public. The VC owned a big stake in it. You basically bought the VC out direct.
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Chapter 3: What challenges did Activision face before Howard's takeover?
All right, so you don't remember it, but you probably know what a cartridge looks like. Yeah. Those are hardware, expensive. You couldn't put much storage. The most you could put is 32 megabytes. We decided to go to CD-ROM, which you had... 900 or 700 megabytes, right? Can you imagine the difference? And it costs 50 cents to make the CD where the cartridge costs $20, $30. Imagine, right?
The risk was gone. You couldn't have a risk anymore. So by taking that strategy of going to CD-ROM, 3D graphics, and video, we ushered a whole new world. And what you're thinking about the VR is the same thing, is you're ushering a new world. Your strategy is to take existing properties, like we did, like Pitfall, Zork, MechWarrior, all these things. By the way, MechWarrior was a board game.
Into a new world, which is CD-ROM, 3D graphics, it worked. Because why? People love those properties.
The brands.
The same thing with board games.
Interesting. Well, we'll chat more offline about that. Let's fast forward. How is the game Mortal Kombat like the game cryptocurrency? What are you building at StartEngine?
So StartEngine is a modern financial firm. And our mission is to help entrepreneurs achieve their dreams. And my idea was very simple, is to help people raise capital. Why? When I invested in about 60 different companies here in LA, in Los Angeles, most of them went out of business. Why? They couldn't raise money. Why couldn't they raise money? They didn't fit the VC model.
VCs typically only invest in white males from Stanford. You know, these kinds of exact people that they want. Plus, the idea has to be in their favor. The geography has to be in their favor. But what is everybody else supposed to do? Women, people with minorities, people who live around the country, people who are doing new ideas that don't fit the VC model. What are they supposed to do?
They can go to friends. They may get some angels. But so we decide to build a solution for them where they can raise money from the crowd and the crowd becomes their advocate. And we've raised money for over 100 companies so far. This year, we're going to raise money for 500 companies.
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