Strategy First

Strategy First Inc.
Subsidiary
Industry Video game industry
Founded 1988 (1988)
Headquarters Montreal, Quebec, Canada
Area served
 Worldwide
Products List of Strategy First games
Owner Silverstar Holdings
Parent Silverstar Holdings
Website strategyfirst.com

Strategy First Inc. is a video game publisher based in Montreal, Canada. Founded in 1988, the company has published numerous well-known games, such as the Disciples series, Jagged Alliance series, O.R.B: Off-World Resource Base, and Space Empires series.

History

Conflicts

Strategy First has had conflict with Introversion Software. The company was distributing copies of Introversion's title Uplink entitled Uplink: Hacker Elite. However, after filing for bankruptcy, Strategy First suspended paying royalties to Introversion, already owing them tens of thousands of dollars. Introversion severed its ties with the company.

Former Strategy First developer Legend Studios also reported a conflict culminating in a press release issued February 11, 2005 where they claimed the publisher "breached the Software Publishing and Distribution Agreement", and that "we have not receive a single sales report, payments for royalties and they practically have not fulfilled a single point in our agreement."

In a postmortem article about the development of Galactic Civilizations II, Stardock founder Brad Wardell stated, regarding the original title, that "Publisher Strategy First filed for bankruptcy without paying a significant portion of the royalties we were owed."[1] Gaming news sites have also reported conflicts involving Strategy First, such as a news item by gaming industry site Gamasutra that reported developer BattleGoat Studios co-founder George Geczy stating that "We had to give them 50 cents off the dollar just to get our money out of them."[2]

The strategy developer Pollux Gamelabs also reported a conflict with Strategy First and the release of the 4X strategy game Lost Empire. According to the Lost Empire forums, Pollux Gamelabs cancelled all cooperation with Strategy First due to some disagreements between the two companies, details of which were not specified.

An openly published accusation from i-Deal Games Studio, who were responsible for the sanctioned mod Jagged Alliance 2: Wildfire, states: "Due Methodical breach of software distribution agreement by Strategy First side i-Deal Games has terminated its agreement with Strategy First inc."

In a post on the Steam community forum on June 14, 2009, Technetium Games, publishers of "SlamIt Pinball", also posted claims that Strategy First was not paying royalties or making reports of sales. "Strategy First is still not paying us any money. They are not sending us any report on sales. They are telling us stories and giving explanations."

New ownership

In 2004, Strategy First Inc filed for bankruptcy protection. On April 21, 2005 it was acquired by Silverstar Holdings. Terms of the acquisition included "cash consideration to the creditors of Strategy First of $609,000; we issued 377,000 shares of our common stock; warrants to purchase 200,000 shares of our common stock; and assumed approximately $400,000 in existing bank debt, as well as contingent consideration based on the future profitability of Strategy First."[3] Silverstar Holdings Ltd. was a publicly traded company registered in Bermuda (traded on NASDAQ under symbol SSTR), with their web home page stating that they are "focusing on acquiring controlling positions in high-growth retail-driven and fee-based electronic game businesses that could benefit from the economies of scale generated by the Internet and other technology-related platforms." Silverstar completed a purchase of game developer Empire Interactive on December 4, 2006, and claimed in a same-day press release that with the addition of Empire Interactive titles to the Valve 'Steam' service, "we are delighted that in this short time the first collaborative effort between Empire and Strategy First has born fruit."[4]

The Silverstar SEC filing for its quarter ended September 30, 2006, indicates that Strategy First was not providing a significant flow of revenue: "We have recognized a net loss of $941,000 during first quarter fiscal 2007 compared to a net loss of $48,000 during the same period in the prior fiscal year. Significant items that contributed to the increased loss included an increase in operating losses to $583,000 in the first quarter of fiscal 2007 as compared to $421,000 in the first quarter of fiscal 2006. This increase was primarily caused by decreases in sales recognized by Strategy First."[3]

Financial difficulties

On March 12, 2009 Strategy First's parent company Silverstar Holdings Ltd was formally delisted from the NASDAQ market after failing to meet a timeline extension to become compliant with NASDAQ Marketplace Rules, specifically they "had not regained compliance with the stockholders' equity requirement".[5] The final statements publicly published by Silverstar were for the period ending December 31, 2008, filed on February 20, 2009.[6] In these statements, Silverstar indicated that Strategy First revenues were minimal for the three months ended December 31, 2008 ("about $400,000" out of revenues of $8.7 million), with the bulk of revenues coming from the Empire Interactive division. Silverstar's total loss for this period was $3.4 million. As of December 31, 2008 Silverstar reports current assets of about $4 million versus liabilities of $17 million. Accounts Payable and Royalties Payable totaled $4.3 million, versus only $422,000 in available cash. In their management review Silverstar states "These factors raise substantial doubt about the Company’s ability to continue as a going concern. Since June 2008, the Company has been seeking to raise additional capital in the form of both debt and equity; to this point with no success. The results of the quarter ended December 31, 2008 have further impacted the Company’s liquidity position and without a very short-term solution to this lack of liquidity, there is substantial doubt about the Company’s ongoing viability."

Subsequent to the SEC 10-Q filing, Silverstar reported that on May 1, 2009 their Empire Interactive division filed for "administration" (bankruptcy) in the UK, and that "Empire has sold its intellectual property assets to New World IP, LLC ",[7] and all 49 staff were laid off.[8] New World IP then leased the rights to publish Empire's entire catalogue to Zoo Games.[9]

Additionally, Silverstar has reported that it is in default on its repayments on both its 2008 and 2006 Debentures.[10]

Notable games

References

  1. ↑ http://www.gamasutra.com/features/20060405/wardell_01.shtml Gamasutra 'Postmortem' April 5, 2006
  2. ↑ Gamasutra Industry News September 5, 2006
  3. 1 2 SEC 10-Q Filing November 14th, 2006
  4. ↑ Silverstar Press Release December 14, 2006
  5. ↑ Edgar Online Filing 2009
  6. ↑ SEC 10-Q Filing February 20, 2009
  7. ↑ Empire Interactive Bankruptcy SEC Filing
  8. ↑ Empire IP Rights Sold As 49 Staff Made Redundant from GamesIndustry.biz
  9. ↑ Graft, Kris (2009-05-07). "Zoo Publishing Picks Up Empire Slate". Gamasutra. Retrieved 2009-05-12.
  10. ↑ SEC Filing Default on Debentures
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