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Master Gamer's Editor in Chief Ivan Trembow recently spoke with Thomas Heymann, the CEO of GT Interactive. Here's what was said. Ivan Trembow: How is working at GT different than working at your previous jobs? Thomas Heymann: Well, GT is a very exciting business. It has lot of great assets and is really appealing to a wide variety of audiences in the whole interactive world, both PC and console... we're not as direct all the way to retail (as his previous employers were), but we have a lot of the same disciplines on the manufacturing side... you know, I don't control K-Mart, but I have to sell through K-Mart. But the idea of pre-creating product and having it sold at a retail venue is something that I'm very familiar with, and entertainment product is something that I'm very, very familiar with. The biggest difference is all the operational issues and procedures that need to be fixed here at GT relative to some of the things I've done in the past. I've never had a business that's had as many operating inefficiencies as GT does. IT: Do you play a lot of games on your spare time? TH: No, not really. I'm not much of a gamer myself. I probably spend the most time with the Humongous Entertainment products on the kids side with my own kids. I play some PlayStation games with my kids, but they more or less play the games much more so than I do. I'm not really a true gamer, so to speak, but I understand how to market an entertainment product, and in our business there's the development side and there's the marketing side, and I have a very good sense of the marketing and financial side of this business. If we were counting on me to play a game, well, we'd be out of business. IT: How did the decision come about to put GT up for a sale or a merger? TH: Well, as we stated before, we've evaluated our long-term strategic financial options and decided that capitalization wasn't appropriate for our business in the industry that we're in right now. And (we) made a decision that we needed to go out and change that and make that happen in a big way. IT: How are you planning to make things pick back up for GT over the next months and years down the road? TH: First and foremost, once we get the financial picture established, then it's really a question of building upon the strengths that we have and the great assets that we have and growing all aspects of our business. GT has strategically been in the right places, but their execution came back to haunt them in a big way. IT: When and why do you think the financial trouble began in the first place? TH: It was a combination of the business ramping up over time in terms of adding to the costs, and then having some products not ship in a timely fashion, causing the costs to exceed the potential revenues. So it's really sort of a simple process. IT: Is the re-location from New York to Los Angeles going to be complete by the end of the year? TH: That's on hold pending what happens with the financial restructuring. IT: Are you finding it harder and harder to make money off of bargain- priced PC games as the profit margins continue to go down, or are you still doing really well in that area? TH: Oh no, it's still a very profitable business. IT: Nowadays it seems like everybody's got a deer hunting game out. Do you think the added competition in the market does more to cut into your sales, or do you think that it does more to improve the quality of the games if there's more competition? TH: I think it's an expanding market, and when you own the franchise that everyone's trying to emulate, that's a good position to be in. IT: How true are reports that Oddworld Inhabitants may be up for sale or that the publishing rights to their future games may be sold to another publisher? TH: Well, you know, we're exploring a lot of options in a variety of places and that's something that's in consideration. IT: Judging by the amount of copies you shipped of Driver and Total Annihilation: Kingdoms, you had some pretty high sales expectations for both of these games. So far, have these sales expectations been met? TH: Oh, (they've been) exceeded. IT: What are the biggest games GT has planned for this fall? TH: Unreal Tournament comes out in the fall. We're very excited about that. We have Driver coming out for PC, which we're very excited about. Duke Nukem: Zero Hour for N64... we have another great product both for PlayStation and Nintendo 64 called 40 Winks. We have a PC product called Wheel of Time from Robert Jordan that we're very excited about. On the value side of the business, we've got Rocky Mountain Trophy Hunter, Deer Hunter 3, and Harley Davidson, a motorcycle game. Humongous Entertainment's got the Backyard Football program launching, and some additional products that we're all really very excited about. So we've got a lot of things going our way here as we move into the fourth quarter. IT: Is there a more specific release date for Unreal Tournament, or is it just sometime in the fall right now? TH: Sometime in September, yeah. IT: This is a question I know a lot of gamers are asking themselves: Where is Duke Nukem Forever? When can we expect to see it on store shelves, and what's taking so long with its development? TH: 3D Realms is really a very special developer. Duke is an unbelievable franchise. It's one of those things where it's a franchise product and you want to bring it out when it's ready. So we're looking at the spring for that product. IT: Is there any particular age group that GT is targeting more than others? TH: Nope. That's the strength of GT. We appeal to a lot of different demographics, a lot of age and income demographics as well. IT: Is GT specifically targeting casual gamers or hardcore gamers more than the other? TH: Nope. The diversity of our revenue source is one of our great strengths. IT: Are you looking to expand into sports games and RPGs more, or not really? TH: Not really. We're just going to try to play on the strengths that we have today. IT: What are GT's plans for the next-generation of video game systems? Which ones are you going to be supporting? TH: We're going to be, at least, supportive of PlayStation 2 at this time, and sort of watch how everything else develops. Certainly we'll do Nintendo product when that evolves and moves on. IT: Are you concerned that the PlayStation 2 is going to be too expensive or difficult to make games for? TH: No. It's going to be more expensive, it's going to take some additional money, but we're going to be okay with that. IT: Do you think it's really realistic to expect to see the PlayStation 2 on US store shelves by the end of next year? TH: Oh, you know what? That's really... I'm going to follow along with what Sony is proposing. IT: At what point are you going to scale back your PlayStation development to make more room for PlayStation 2 development? TH: Probably a year or so from now. IT: What's your stance on the Dreamcast? Is it more of a wait-and-see approach? TH: We're taking a wait-and-see approach. IT: Is Project Dolphin something you're going to be looking to support as well? TH: Yup, as we get to know more and more about that. IT: Where do you see the video game industry going over the next few years? TH: I think the excitement around the backward-compatibility of PlayStation 2 and where PlayStation 2's going to go really eases us into another level of continued growth. And when you're finding that the business is growing 20% a year, it's exciting and I think we can see that kind of continued growth. IT: What do you think the biggest new trends in the video game industry are going to be over the next few years? TH: I think it's really the maximization of what the Internet capabilities can be... being able to attract a new level of gamer to the business because of the high quality that's going to come with the PlayStation 2. You know, the graphics and all those really neat things that go along with that. You're going to interest a whole new level of people that haven't heretofore been interested. The Full Motion Video that's available today is still going to be a fraction of what's going to happen in the future, which is just very exciting. IT: What do you think the video game industry's biggest weaknesses are? TH: Well, I think that the consolidation that's going to occur is going to be a good thing, and having two to three platforms that are really serious platforms is going to be really helpful. But I think the technology is really driving it, and it's something that's exciting. IT: Do you think the market, as big as it is now, can really support all three of the next-generation systems? TH: Yeah, if there's a unique-ness to them all and a time-frame that works, then potentially, yeah. I think there's growth in the marketplace for it. Send your thoughts on this interview to ivan@mastergamer.com
© 2001 ivan@mastergamer.com