IN THE MID- TO LATE-'90s, industry tradition dictated that console manufacturers build their brand around mascot. Nintendo had Mario, Link, Princess Zelda, and Samus Aran. Sega had Alex the Kidd and, more famously, Sonic the Hedgehog. Crash Bandicoot, though created by Naughty Dog, became a surrogate mascot for Sony's first PlayStation.
Ed Fries bucked that tradition. Windows was a platform, not a console. He and the games group within Microsoft defined their brand in their own way. "It was more of a portfolio approach. My goal was trying to grow our market share, so we took what we could get. We weren't trying to specialize in one area," Fries says.
Where most console mascots came from platforming games, Fries aimed to diversify Microsoft's portfolio by representing all genres: shooters, one-on-one fighters, and sports. He had a strong foundation to build on. Microsoft Flight Simulator had been going strong since creator Bruce Artwick licensed his game to Microsoft in 1982. The game grew so popular under the Microsoft banner that hardware manufacturers adopted it as an unofficial benchmark [DC1] to test graphics cards and other new products. Tony Garcia had led acquisition efforts of MechWarrior and Crimson Skies creator FSAA in 1995. Age of Empires demonstrated the efficacy of Microsoft's and Ensemble's partnership, and golf fans could tee off in Links 386 and Microsoft Golf, both of which happened to be developed by the same development house, Access Studio.
Fries set his sights on Access Studio first. He finalized the acquisition in 1999. "They made Microsoft Golf for us, and then they made their own Links Pro, built on the same technology," he says of Access. "When we acquired them, we dropped Microsoft Golf and went forward with Links. We were really growing with our eyes on competing with Electronic Arts and being the biggest PC game company. That was really my goal until the days those Xbox guys walked into my office."
Dropping Microsoft Golf in favor of Links made sense. Access sold more copies of Links, so it subsumed its counterpart. Age of Empires was different. The real-time strategy (RTS) genre was booming, with Age of Empires, Blizzard's WarCraft II, and Westwood's Command & Conquer leading the pack. Fries appreciated what both companies brought to the strategy genre. Westwood had popularized real-time strategy with Dune II and improved on its formula with Command & Conquer, both of which were rooted in science fiction. Blizzard had distinguished WarCraft by deriving it from fantasy properties such as Warhammer.
Fries arranged a meeting with Westwood co-founders Bret Sperry and Lou Castle, and executives from Virgin, which owned the Command & Conquer studio, in 1998. "I had played their stuff extensively. I played Dune II, I played their Bladerunner RPG they did and a lot of people don't remember, and of course Command & Conquer and Red Alert. It was the gorilla in the RTS space. It was bigger than Age, yet complementary in that it was sci-fi and Age was more historical-based. I thought it would have fit into our lineup pretty well."
Virgin and Westwood seemed amenable to acquisition, so Fries drew up paperwork and left it for his lieutenants to carry out while he and his new wife traveled for their honeymoon. He returned two weeks later in mid-August to the news that Virgin and Westwood had decided to sell to Electronic Arts for $122.5 million in cash[DC2] .
"The Westwood guys wanted a royalty plan, and we didn't do that," says Fries. "What we had were Microsoft stock options, which were going crazy at the time. We tried to convince them that they'd make more money off those stock options than they would a royalty plan."
EA's acquisition happened so quickly that Fries theorized Westwood and Virgin must have been entertaining offers from Electronic Arts and Microsoft at the same time. "I was 100 percent convinced we were about to sign that deal, but it didn't happen. I think we had convincing numbers to show, especially with Age of Empires, that we could handle products like theirs, and handle them worldwide, and make similar numbers to what they were used to."
Fries worried that Westwood's owners had made a mistake. EA had no experience making or publishing RTS games. In January 2003, less than five years after the ink on the acquisition papers had dried, Electronic Arts laid off employees at Westwood [DC3] and absorbed the studio's brands into EA studios located in Redwood Shores and Los Angeles. Command & Conquer continued, but each release left fans more disappointed until bottoming out with 2018's Command & Conquer: Rivals for mobile phones.
Westwood and C&C occupied two plots in what fans came to describe as Electronic Arts' graveyard[DC4] , a burial ground of studios and properties it acquired and killed off over the years. "Obviously I'm biased on this, but I think EA really trashed the Command & Conquer brand. I think it would have been better with us," Fries adds.
Fries eyed Blizzard Entertainment several times, but the stars never aligned. The first time, he arranged a meeting with Blizzard co-founder Mike Morhaime at the studio in Irvine. Morhaime skipped pleasantries and jumped straight to demands: "I'll never put the Microsoft name on my box. I won't use your online gaming service. I'm going to keep Battle.net separate."
Fries smiled and raised his hands. "Whoa, whoa. Wait a minute. My name's Ed. What's yours?"
Morhaime's initial brusqueness faded as they talked, and the two became friends. Talks seemed to go well until Comp-U-Card International, a consumer services company, outbid him. CUC confused [DC5] Wall Street when it announced its acquisition of Sierra On-Line and Davidson & Associates, the edutainment company responsible for Math Blaster! and then-owner of Blizzard Entertainment and Diablo developer Blizzard North, in February 1996. CUC later merged with HFS International to form Cendant Corporation and, in 1998, perpetrated the biggest accounting scandal in corporate history to date when investigators found that CEO Walter Forbes had been cooking his books for years.
As the dust settled from Cendant's scandal, the company put its gaming assets up for sale. Once again, Fries put in a bid. Once again, someone else got there first: Havas, a French utility company that later sold to Vivendi. In 2008, Vivendi sold its gaming division to Activision and the two companies formed Activision-Blizzard. Morhaime eventually retired in October 2018.
"He had to protect Blizzard from multiple parent companies over the years," Fries recalls of his talks with Morhaime. "That's really the amazing job that he did: Create a safe space for game development to happen underneath these parents that are constantly trying to fuck it up. Much like my job on Word was to say 'No,' I can relate to the situation he was in."
Fries almost had a hand in publishing one of the most influential first-person shooters of all time when a former Microsoft employee pitched the game he had created with a fellow Microsoft alumni. "Both Gabe and I thought about joining them but 'there wasn't a good fit,'" Valve co-founder Mike Harrington remembers from interviewing for a position on the games group under Tony Garcia. Harrington and Gabe Newell left Microsoft to form Valve and develop Half-Life, the FPS widely credited for shaking up Doom's get-keys-open-doors-shoot-everything formula by never taking control away from players during story moments.
Later, Harrington and Newell returned to Microsoft and pitched Half-Life again, this time to Ed Fries. "They gave us a ridiculously low offer, about 11 percent with a zero-dollar or small advance, I think," Harrington says. "Part of the reason, we were told, was that senior management had a dim view of ex-employees. It was a loyalty thing. It was kind of a slap in the face. And, at the time, Microsoft was very shy about 'violent' games. Bad fit."
Fries recalled being impressed by Half-Life's tech but underwhelmed by Valve's pitch, which to his memory boiled down to "make Quake, but with a better story."
"At that time, that was the biggest game in the world," Fries says of Quake. "To have some people who were making their first game saying they were going to fix the thing that everybody knew was broken about the biggest game in the world--yeah, the story was terrible in Quake, but it was the kind of pitch I would get all the time, mostly from people new to the games business. It's like if you were to pitch Fortnite now, but with a little twist."
On top of that, Fries knew an M-rated game would be a tough sell. DirectX evangelist Alex St. John had fought that same battle with Fries when he advocated to bring Doom to Windows 95. Fries flew to Texas and met with John Carmack, but no deal came to fruition. The problem, as Harrington had predicted, was the M-rated content in all of id's shooters. "The biggest fear anyone outside our group had was the games people would endanger something that mattered," Fries says. "We put out a game, right on the box it says Microsoft, and then there's some controversy that somehow affects sales of Office or Windows. I could easily do way more financial damage to the company than our entire group would generate in revenue in a year."
Newell and Harrington ended up setting a meeting at Sierra that went better than expected when Mother Nature conspired to throw off their logistics. "It snowed that day and we ended up pitching Half-Life directly to Ken Williams, which was amazing," Harrington recalls of meeting Sierra's co-founder. "Ken's a legend in the industry."
Valve and Sierra signed a publishing agreement in April 1997. Half-Life released to critical and commercial acclaim the following year, raking in awards and virtually guaranteeing a sequel. The relationship broke down four years later. In 2002, Valve sued Sierra for violating its copyright on Half-Life by installing the game in Internet cafes. Sierra fired back by alleging that Gabe Newell had misled Sierra management with "half-truths[DC6] " and "concealment," and fought to take ownership of Half-Life.
The judge ruled in Valve's favor, freeing the developer to seek a new partnership. Newell went back to Fries and asked if he would like to publish and distribute retail editions of Half-Life 2. Fries turned him down again. This time, an M-rated game wasn't the issue. Valve wanted to publish the digital edition of its sequel on Steam, its digital storefront, so it could exercise total control over things like discounts and sales.
"We had no ability to control the price they set on Steam, so it was an unworkable deal they had proposed," Fries explains. "It was less that I was worried about Steam outselling us than I was creating a problem with retailers: 'Hey, how come you're selling it to me at this price, but they're selling it over there for this price?'"
By 2002, Fries had seen deals come and go, and no longer mourned passing up the opportunity to work with developers like id Software and Valve. At the same time he discussed Half-Life 2 with Gabe Newell, Fries spoke with another blockbuster game developer about a publishing deal.
"I had two deals on my desk: A deal with them, and a deal with Epic. I threw Valve's away and did the deal with Epic," Fries says.
