Year-End Reckoning
“Ultima Online currently has 950,000 paying subscribers, and given the growth trend, reaching one million within three weeks is all but certain. The average daily concurrent users stand at 76,351.5. During evening prime time, that number exceeds 120,000.”
Richard Garriott of Origin Systems scratched his head as he delivered the key figures for this year’s year-end settlement. Accounting data appeared on the screen beside him. Although this was ID Entertainment’s annual review, Richard Garriott spoke first instead of President Stephan Barber because of the organizational structure. ID Entertainment owned multiple game studios with guaranteed management rights, so each studio presented its results first, with Stephan Barber wrapping up at the end.
Ultima Online, launched under the unprecedented early-access model, was still in that phase. As Richard Garriott continued receiving feedback and refining the game, his desire for perfection only grew. Adding one feature after another had pushed the official release date back by several months. Even so, the early-access policy kept new subscribers flowing in, bringing the total close to one million. It was an impressive achievement.
Even in early access, the game charged a $12 monthly access fee. It was also sold in packaged form and at a slightly lower price online. Cumulative sales had reached 3.7 million units, generating $45.6 million in revenue. Many players tried it for a month and left, but 950,000 continued to pay for subscriptions. That was a substantial number—especially in December 1994. Although the North American market was the world’s largest, this was the first true large-scale online RPG, and the response had been extraordinary.
“Will the official release still happen on schedule?”
“Yes! We are developing steadily according to the early-March launch schedule.”
Richard Garriott’s answer carried a hint of nervous sweat; the date had already been delayed once.
“You’re not staying up all night coding, are you?”
One characteristic of software companies was that the word “quitting time” vanished as release dates approached. What should have been an eight-hour workday stretched to twelve hours—or employees simply slept at the office to meet deadlines.
“That never happens.”
“Good. If you find it difficult to meet the schedule, do not extend working hours. Hire more staff instead.”
No other company expanded its headcount as readily as ID Group. This policy reflected Yoo Jae-won’s personal philosophy. In his previous life he had experienced the crushing weight of doing the work of two or even three people alone. Greedy owners had tried to save a few pennies on labor costs, and Yoo Jae-won, caught in the middle, had suffered burnout so severe he seriously considered quitting. In Korea, employees who showed higher efficiency were simply given more work rather than better treatment—especially in IT. When Yoo Jae-won’s potential finally exploded, he worked himself to exhaustion, only to resign when he could no longer endure it. The company that had piled tasks on him without proper support collapsed after he left. Realizing he had been single-handedly sustaining an entire firm, he resolved to start his own business and ensure such exploitation never occurred inside ID Group.
“Of course,” Richard Garriott replied cheerfully. One advantage of online games was the dedicated fanbase that purchased subscriptions month after month. That steady revenue stream reduced the burden of hiring new employees.
Richard Garriott then reported sales figures and future development plans for other Origin Systems titles beyond Ultima Online. Although every developer at Origin was currently focused on Ultima Online, the studio had long held famous IPs such as the Wing Commander and Crusader series. He declared that Origin would continue creating original series even if it meant expanding development teams.
“Naturally,” Yoo Jae-won agreed at once. Nothing lasted forever; games were no exception to the cycle of rise and fall. Ultima Online appealed to a very specific taste. When newer, more innovative MMORPGs appeared, players would leave in droves. Maintaining a diverse portfolio was therefore prudent.
“Sales of the first Warcraft title, Orcs & Humans, have reached 2,734,000 copies to date.”
Mike Morhaime, president of Blizzard—the next studio to present—proudly announced the figure. His face glowed with satisfaction. Before Blizzard, the company had released games under the Silicon & Synapse name, none of which exceeded one million units. Warcraft had delivered their best performance yet. Sales remained steady at roughly 300,000 copies per month, making a three-million-unit milestone by January inevitable.
Of course, ID Entertainment housed even larger beasts. Return to Castle Wolfenstein and Quake from ID Software were rewriting sales records daily. Their popularity was so immense that 3D accelerator card manufacturers bundled them, driving sales even higher. Still, launching an entirely new IP and selling three million copies was deeply meaningful. Revenue was substantial as well: Warcraft alone had generated $136 million. By handling production and distribution internally, costs previously shared with partners were minimized. Both Yoo Jae-won and Blizzard were certain to clear at least $50 million in profit.
“We plan to begin development on the sequel, Warcraft 2, very soon—as a full 3D RTS using a 3D engine.”
Mike Morhaime’s words drew puzzled looks from other executives. The first game had been out less than six months; rushing a sequel seemed premature. Yoo Jae-won, however, was supportive. The executives worried the sequel might cannibalize sales of the original, but new games did not appear overnight. A title built with 486-era pixel graphics could be made relatively quickly, yet modern gamers with raised expectations would reject it. Retro styles would not return for some time. The era of large capital requirements had arrived; CD-ROMs, 3D graphics, and cinematic sequences had inflated both budgets and development timelines.
“Make sure you keep a dedicated support team for balance patches and bug fixes.”
“Of course.”
“And one more request.”
Yoo Jae-won’s tone remained measured, but he had not finished.
“I believe the Warcraft series will endure for decades.”
“Thank you for your confidence.”
“It is not lip service. I mean it sincerely. The franchise will expand beyond RTS into many genres and become a game enjoyed by players worldwide.”
From MMORPGs to card games, Warcraft had spawned an astonishing variety of titles, most of them highly polished and successful.
“The most important element for that longevity is story—along with compelling protagonists and memorable villains. Yet when I read the original Warcraft material, I noticed a tendency to corrupt perfectly good characters simply for dramatic impact.”
Yoo Jae-won had been a hardcore fan of Warcraft games in his previous life. He had enjoyed them, but one recurring complaint stood out: well-crafted characters were repeatedly turned to the dark side. The first few instances felt impactful, but repetition made the trope stale and diminished his interest. Smooth narrative flow also suffered. That pattern of corruption began in Warcraft 2. Yoo Jae-won was voicing his concern in advance.
“Ah, yes. I will be sure to convey your concerns to the story team.”
Mike Morhaime accepted the feedback immediately. Much of Warcraft’s success owed to Yoo Jae-won’s guidance; the multiplayer dominance stemmed directly from implementing his earlier suggestions. This request, born of genuine affection for the game rather than a demand for maximum profit, was easy to accommodate.
The positive atmosphere reached its peak when ID Software’s turn arrived. Industry experts had predicted that Return to Castle Wolfenstein and Quake launching around the same time would split the same audience and result in self-cannibalization. The opposite occurred. The two titles cross-promoted each other spectacularly. Players who bought RTCW later purchased Quake, and vice versa. By year’s end ID Software had sold a combined ten million copies—an astonishing feat. RTCW exceeded six million units while Quake, released a month later, reached five million. Although not all sales came through retail—some were bundles with 3D cards—moving ten million PC games remained a monumental achievement.
Even so, several Nintendo titles from the 1980s had surpassed ten million copies. Still, the PC gaming boom was only beginning. With continued growth, selling tens of millions would become realistic. Given that Yoo Jae-won’s ID Entertainment led the PC gaming charge, the first ten-million-unit PC title would almost certainly come from one of its studios.
John Carmack and John Romero of ID Software discussed both current results and future plans. Carmack mentioned steady preparations for the upcoming Quake tournament to be broadcast on ESPN, while Romero announced plans for an RTCW expansion pack. Incidentally, the bet between the two had gone to Carmack; Quake outsold RTCW by roughly 500,000 copies in the first month after launch. Romero accepted the loss without complaint. Despite their rivalry, they were colleagues under the same roof at ID Software. Moreover, RTCW’s cumulative sales and revenue far exceeded Quake’s. RTCW offered twelve hours of single-player content plus robust multiplayer and carried a $49 full price, whereas Quake, multiplayer-only, was priced at $24. Carmack had never been overly invested in the wager, so the outcome felt anticlimactic. Yoo Jae-won was simply relieved that any potential fracture within ID Software had been avoided.
Even after ID Software finished, several smaller studios remained. One had ported Doom to PlayStation; another developed Tetris and various board games for Nextcom. Though each employed only about ten people, they were proud members of ID Entertainment and received their moment in the year-end report.
“Good afternoon. I am Stephan Barber, president of ID Entertainment. I will now report on the results of our film investments this year.”
Only after every studio had spoken did Stephan Barber take the stage. His presentation was simple: a projector displayed the 1994 box-office rankings. Several titles from first to tenth place were highlighted in blue—precisely the films ID Entertainment had invested in: Forrest Gump, Speed, The Lion King, Schindler’s List, Interview with the Vampire, Cool Runnings, and others that had performed strongly at the box office.
“The highlighted films are those in which ID Entertainment invested. Investment per title ranged from $5 million to $30 million, with a success rate above 70 percent. Because we focused on commercial films, returns were high—minimum 50 percent, and up to 400 percent in the case of unexpected hits like Speed.”
Stephan Barber’s face shone with pride, yet he remained modest. While his own eye and his task-force team’s reports had guided some choices, none matched the accuracy of the notes Yoo Jae-won sent via ID Talk. Those mysterious tips had produced far more winners. Whatever data or analysis lay behind them, the results were uncanny. After such performance, boasting would have been presumptuous; humility was the only option.
“In total, we invested $200 million in films and achieved a combined return of 268 percent, generating $536 million in profit beyond the principal.”
Applause erupted. The remaining game-studio presidents sat with mouths agape. They had spent six months to nearly two years creating games and earned respectable sums, yet film investments had dwarfed those figures. Earning hundreds of millions in a single year was staggering. The returns were so impressive that some wondered whether Yoo Jae-won might shift focus entirely to film. But film investment was inherently risky—ten projects might yield only one success. Moreover, the game industry was poised to surpass film, and Yoo Jae-won’s true passion remained games. Their fears would not materialize.
With ID Entertainment’s year-end review complete, Yoo Jae-won turned to the final division: technology. ID Technology’s review differed from the others. Rather than summoning President Remington to report, Yoo Jae-won visited the departments himself. Because he received daily operational updates from ID Technology, a separate year-end presentation was unnecessary. What he sought now were the results of the quietly advancing project teams. Their laboratories and offices were all located in Silicon Valley, so touring them in a single remaining day was feasible.
The first stop Yoo Jae-won chose was the processor development team led by Dr. Lisa Su.