For a decade, Richard Garriott has been the most innovative computer-game maker in Texas. But now that the competition has caught up, he’s learning some hard truths about the software business.
FOR RICHARD GARRIOTT, real life sometimes looks a lot like a computer game. Consider what happened one night last March at Britannia Manor, his custom-built home in the hills of Northwest Austin. Garriott had retired around midnight, after an evening of watching comets from the observatory at the top of the house, when the doorbell rang. Using a lens from a telescope to see into the night, he peered out the living-room window and spotted a stranger circling the house. After watching him for an hour, Garriott loaded his Uzi—“The only gun I was sure I could make fire,” he says—and started to close the remote-controlled front gate; the visitor took the hint and left the property. Relieved, Garriott went back to bed.
But at three-thirty in the morning, the stranger was back. From his bedroom, Garriott heard a glass door shatter, then the sound of the glass crunching beneath the intruder’s shoes. Garriott got his Uzi again, grabbed a cordless phone, and dialed 911. After describing his situation to the operator, he said he had an Uzi and asked, “If this guy comes upstairs, what should I do?” If you feel threatened, he was told, you may use deadly force. When he saw a bare-chested, tattooed man start up the stairs, Garriott yelled out, “Stop or I’ll shoot!” He held the man at gunpoint while waiting for the police, but after some three minutes, the intruder shrugged his shoulders and began strolling away. Garriott fired a warning round into a wall, but the stranger kept walking toward a guest room, where he shut himself in. A few minutes later, four Travis County sheriff’s officers arrived and carted him off to jail—where they learned not only that he had been inside Britannia Manor before (on Halloween, when Garriott transforms his home into a spectacular interactive haunted house) but also that he is a big fan of Ultima, the signature series of medieval-fantasy computer games that helped launch Garriott’s company, Origin Systems, and make him a multimillionaire. The stranger told investigators he had seen a hologram of his own face in front of Garriott’s house, beckoning him as “the chosen one.”
Apparently, the man had a hard time distinguishing between fantasy and reality. In the introduction to The Official Book of Ultima, which doubles as a guide for players and a biography of Garriott and Origin, Garriott wrote, “[Y]ou journeyed to the world this Garriott of Lone Star calls home. There thou must infiltrate Garriott’s ‘Tower of Knowledge’ in Oztin and unearth the secrets of his reputed powers to make and shape new worlds at will.” The intruder, it seems, took the invitation literally.
The incident seems especially fitting given the kind of year Garriott has had, because like the intruder, the realities of the computer-game business are not just knocking on his door, they’re crashing in. In the past six months he has seen four top lieutenants leave Origin, including his brother, who started the company with him, and the creator of the Wing Commander series, the company’s best-selling space-combat games. He’s facing stiffer competition than ever before—especially from companies such as Mesquite-based id Software, which has won national attention by designing games to be played over the Internet, a market Origin has yet to crack. At the same time, Origin’s production budgets have skyrocketed from several hundred thousand dollars per game just a few years ago to an average of $2 million today. And last March, following a decision to spend more money on fewer projects, Origin canceled several games in development and laid off twelve of its roughly three hundred workers. For a decade the company has been Texas’ leading computer-game firm, with anticipated sales of more than $50 million in 1996, but the entertainment software business is changing fast. The question of the moment is how well Origin is keeping up.
Stiff competition is not something the 35-year-old Garriott used to worry much about. He was only 18 when he wrote his first hit, a medieval adventure called Akalabeth that was distributed by now-defunct California Pacific and sold 30,000 copies, earning him $150,000 before he started college. During his freshman year at the University of Texas at Austin, he wrote the first game in the Ultima series; as sales rose, his grades fell, and he quit school after his junior year to pursue game writing full time. In 1983 Richard and his older brother, Robert—who had earned a master’s degree in business from the Sloan School of Management at the Massachusetts Institute of Technology—founded Origin in their parents’ garage in Nassau Bay, near Houston. (Their father, Owen, is a former astronaut who flew on Skylab 3, and their mother, Helen, is an artist.) The brothers moved the company to Austin in the mid-eighties, and in 1992 Electronic Arts, a software giant based in San Mateo, California, absorbed it as a wholly owned subsidiary, a deal worth $30 million to Origin’s co-founders. Over the years, more than 2 million copies of the Ultima series have been shipped to stores and mail-order houses, making it one of the highest-grossing series in the history of entertainment software and Garriott one of the world’s most successful game designers. “He has been able to live in this fantasy world, which is also his business,” Robert Garriott says. “What a great opportunity: not only to live your dreams, but to work your dreams.”
One element of fantasy in Richard’s life is his name: Around the software world, he’s known as Lord British, a moniker he picked up years ago at a computer camp where the kids thought he spoke like an Englishman. Not coincidentally, Lord British is a character in the Ultima series. Then there’s the ultracasual atmosphere at Origin’s offices: Garriott typically shows up in jeans, sneakers, and a work shirt and wearing his blond hair in a long, tightly braided queue. Employees—Garriott included—ambush each other in the hallways with rubber-band pistols and find inspiration in an arcade furnished with “ancient” games like Space Invaders and Donkey Kong.
And, of course, there’s Britannia Manor, the 4,500-square-foot house where Garriott lives with his girlfriend and personal trainer, Heather Smith. Complete with a dungeon, trap doors, and a secret passageway, it’s a Hill Country version of Pee-wee’s playhouse—except Garriott has different taste. Two coats of armor stand guard by the door, and the walls of the entrance hall are covered with swords and crossbows. (“I really don’t use guns much,” he says, concerned that his Uzi will give people the mistaken impression he’s a militia nut.) The guest rooms are filled with space paraphernalia like a meteorite fragment from Mars and a plaque attesting to Garriott’s ownership of Lunakhod-21, a Soviet lunar lander parked on the moon that he bought at a Sotheby’s auction for $60,000. “I’m the world’s only private owner of an object on a foreign celestial body,” he says proudly. From the study, a hidden spiral staircase descends into the dungeon, where Garriott keeps a plum-size shrunken head from Peru and a turn-of-the-century English vampire-hunting kit. Outside there’s an aviary with a dozen white doves, a wooden three-horse carousel, and a moat stocked with fish. On four Halloweens in the past eight years, Garriott has turned the manor into an elaborate haunted house that has been the talk of Austin, featuring a simulated oil-well fire and a coil that spews a six-foot corona of sparks. People have been known to camp out for a week to get tickets.
In short, Garriott hasn’t been shy about his success—which may be part of the problem. Now, he says, “everybody wants to do the Richard Garriott thing: strike out on their own, start their own company, make their own millions.” Ten years ago, Origin was practically the only entertainment software company in Austin, but today there are at least 25 others in town competing for top-notch programmers, illustrators, writers, and producers. (Several, in fact, were started by former Origin employees.) Keeping talent has become such a challenge that the joke around the office is, “At Origin, we train our competitors.” The recent high-level departures have been particularly striking, though, because between them, the four men have nearly forty years of experience in the software business. Although two of them didn’t defect to rivals—Dallas Snell, an executive producer, quit to start a fitness company, and Robert Garriott is pursuing his interest in start-up ventures—the other two did. Warren Spector, who was the executive producer of the first game in Origin’s well-known Crusader series, left in May to manage the Austin office of Looking Glass Technologies, a game company headquartered in Cambridge, Massachusetts. Even more alarming was the resignation this past June of Wing Commander creator Chris Roberts, whose titles have sold more than three million copies and made him Origin’s best-known gamemaker, next to Garriott. After cutting back on the number of titles this year, Origin simply wouldn’t bankroll the big-budget projects Roberts wanted to produce. At his new company, Digital Anvil, which opens its office in Austin this month, he’ll develop multiplayer games for the Internet as well as “cinematic live-action games”—like those he made for Origin—and has already attracted interest from entertainment and software giants such as DreamWorks SKG and the Microsoft Corporation. Garriott, for his part, is sanguine about the loss. He recently promoted Andy Hollis, who came to Origin in 1993 after founding MicroProse Software and creating its successful F-15 Strike Eagle series. “Chris’s departure,” Garriott says, “is equivalent, in my mind, to Andy Hollis’ joining us, in the sense that we gained one and we lost one.”
Of course, the brain drain isn’t unique to Origin. In August, shortly after id released its eagerly awaited action game Quake, co-founder and lead designer John Romero (who, by the way, also once worked for Origin) announced he was jumping ship to start Dream Design, another software company. Odd as it may seem, id and Origin will probably work with their respective progeny on future projects, so all four firms could wind up in the strange position of being cooperative competitors. “Though it’s an awkward circumstance, it really isn’t the first time our industry has worked through it,” Garriott says. In the early nineties, he notes, Looking Glass published its own games through Origin and Electronic Arts. Fledgling companies need access to the technology and the distribution systems offered by their larger, more established partners, but eventually they sever the ties and become true competitors. Origin and Looking Glass, for instance, have now gone their separate ways.
Naturally, with all the new companies come new products—perhaps too many. Last year alone saw the release of nearly 3,500 games. “It’s an ugly market out there,” says Alex Carloss, Origin’s vice president of marketing. To distinguish itself, Origin has upped the production value of its games dramatically, and now, Garriott says, “the days when a college student can moonlight for a couple of months and crank out a hit are over.” A game that’s relatively cheap to produce, such as Ultima VIII, costs more than $1 million. And that’s nothing compared with the staggering $10 million budget of Wing Commander IV, which features more than four hours of live-action film and big-name actors, including Malcolm McDowell and Star Wars veteran Mark Hamill. Fortunately for Origin—and Electronic Arts, which bankrolled the project—Wing IV has been profitable. They’re hoping to get a similar response with Privateer 2: The Darkening, an upcoming project with a $5 million price tag that stars Christopher Walken.
But with the huge cost of producing games like Wing Commander and Privateer, and with retail prices remaining relatively flat at around $60, companies like Origin need to sell more copies than ever just to break even. According to Robert Garriott, Origin once had to sell 10,000 copies of a game to make money; it now has to sell a million. “The big challenge is to figure out how to stay profitable,” he says. And for Origin this year, staying profitable has meant cutting back. Over a few weeks this past March, the company canceled several projects and reassigned most of the 45 people working on those titles—but 12 employees couldn’t be reassigned, so they were let go.
Perhaps even more damaging than the cutbacks is the perception that Origin has fallen behind in the race to put games on the Internet. The worldwide computer network, industry watchers believe, could revolutionize the games business. Hard-core fans can get bored with traditional computer games because they learn to anticipate the machine’s moves, but playing other humans over the Internet makes a game much more unpredictable. Quake, from id, was a huge hit with game testers this summer partly because it was designed to be played on the Net. Origin, on the other hand, hasn’t developed any that run on the Net—until now. Next spring, Garriott hopes to release Ultima Online, a multiplayer adventure that can be played on the Internet. Like Quake, which advertises the chance for players to annihilate each other in “brutal and exhilarating death matches,” Ultima Online will let people from around the world engage in group combat, but unlike Quake, they’ll also be able to form guilds and talk to each other in a virtual tavern, features that Origin hopes will attract customers outside its typical base of 18-to-35-year-old men. Still, Garriott isn’t forgetting his old standbys; he’s also developing a more traditional game, Ultima IX: The Ascension.
Alas, with two games to produce and all the comings and goings at the office to watch over, Garriott has been too busy to set aside the six months he would need to plan and execute his legendary haunted house—so thrill-seekers will have to get their kicks elsewhere this Halloween. “My life is ruled by product cycles,” he laments. He’s also distracted by the new mansion he’s building; in July he closed on seventy cedar-capped acres just up the road from Britannia Manor, where he’ll construct a 10,000-square-foot stone castle with gates he says will be “straight out of Jurassic Park.” That may be enough to foil unwelcome visitors, but even a dinosaur-size gate can’t keep out the competition.
Alexandra M. Biesada is a freelance writer living in Austin.