I’m just a games geek,’ says Ian Livingstone cheerfully. One of the founders, and now creative director of games publishing empire Eidos, he has come a long way from his days of living and working in a van when starting his first business, mail order-cum-high street retail chain Games Workshop. And it’s a passion for his industry and a refusal to conform that has got him to where he is today.
It got a bit smelly in the van after two months. But my attempt to move from mail order sales to retail was not easy – meetings with retailers were almost as depressing as those I had with my bank manager. When I tried to raise money from the banks, the manager looked at me rather like a dog watching television, smiled politely and ushered me from the office,’ recalls Livingstone.
Unsurprisingly, retailers also didn’t want to know about his concept for an interactive video game (titled Dungeons and Dragons), prompting Livingstone to open his own shops and later launch and publish White Dwarf, the UK’s first interactive games magazine. These days, publicly-quoted Games Workshop (which Livingstone co-founded with friend Steve Jackson) has a market capitalisation of just over £220 million. Livingstone is no longer involved with the business and jokingly says, ‘it’s a pity I sold out as early as I did!’
Losing the fear of failure
Divesting of his interest in Games Workshop enabled Livingstone to pursue what he loves doing best – creating and innovating. He has invented board games such as Judge Dredd and Legend of Zagor, and in 1992 he became deputy chairman of computer games company Domark and was instrumental in its merger with, and the subsequent flotation of, Eidos, in 1995.
If there is one issue guaranteed to irk him, it’s the ethos in the UK that supports heroic failures.
‘We are much better at offering our sympathy than we are at giving congratulations. The UK is a place where people ask “why?”, rather than “why not?”. This discourages enterprise and innovation. It’s a nation of self-doubt – we advise children to wear goggles when playing conkers!’
He is also vocal about the issue of intellectual property (IP) ownership, believing that all the best games development studios will soon be foreign-owned.
‘We have to have faith in our own industry for companies like Eidos to succeed, instead of being negative. We need to increase the desire for individuals to start up, increase the willingness of banks to take risks and support innovation – especially in the press,’ he proclaims.
The ability to tolerate failure is also important, and he goes as far as saying that even bankruptcy can be looked upon positively.
There is an alternative
Much of his success has come from turning established perceptions on their head. His range of ‘Fighting Fantasy’ books, written together with Jackson, which contain characters such as demons and dragons and have an emphasis on combat, were originally condemned as dangerous for children.
‘A housewife rang a radio show and said that her son, having read one of my books, had started levitating. Kids then thought they only needed to spend £1.50, and they would be able to fly! There’s no such thing as bad publicity.’
The books have now sold around 15 million copies in 23 countries and have been credited for improving reading skills amongst those children who don’t like to read.
Livingstone is hopeful that a similar transformation will be worked at Eidos. At its peak, the company’s stock was worth more than £581 million, but it fell out of favour with shareholders and analysts alike after a series of profits warnings.
What the City needs to learn
Having effectively put itself up for sale just under nine months ago after a third profits warning, Eidos is now the subject of a £76 million takeover bid from computer games company SCi Entertainment. This bid has trumped one from Elevation Partners, a private equity firm co-founded by Bono, founder and lead singer of rock group U2.
Livingstone is keeping tight-lipped about the future owners of the business, but is not one for holding back on life in the public eye.
‘It’s quite bizarre that the City can’t get its head round entertainment companies dealing with digital content. It doesn’t fit in with the City’s normal financial model – it doesn’t understand that companies such as Eidos undergo continual revenue spikes. The City can cope with the seasonality of the business, but not with its cycles,’ he maintains.
He also believes the investment community needs to learn to innovate, or be more inclined to forgive, as he thinks is the practice in the US.
‘If we make a management decision to delay a launch, this leads to revenues slipping into the next quarter. For a public company, this could be a disaster, as it might lead to a profits warning. Investors see such a delay as a mistake made by incompetent management.’
Commitment and passion are all
Livingstone, however, is full of praise for people who are driven by passion and commitment, rather than skills. This is his mantra, and applies equally well to people he is willing to both recruit and back investment-wise.
‘When we opened Games Workshop, if we had recruited people with sales experience, they wouldn’t have been able to sell Dungeons and Dragons, purely because they would not have got the concept of the game. Game lovers may not be the best retailers but they can talk about the game, get enthusiastic and get the message across to customers.’
He has recently dabbled in small investments, and last year helped to fund, and became chairman of, educational interactive children’s toy developer Bright Things (he is now a non-executive director). Set up by two former Eidos employees, Bright Things floated on AIM in April last year, a market that Livingstone says has much more of a pioneering spirit than the Full List. It is a quality that he values now.
‘The idea of the new will always attract me but I also want to see if the people I back are as motivated as I was. At Eidos, we have pushed for a non-hierarchical structure – everyone can have his or her say. I’ve never been one to hit others with a stick, but if my staff abuse their freedom, they’re gone.’