Getting Back Into The Battle

June 13, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

In Monarch Avalon's new computer game Kingmaker, the noble that loses the game also loses his little head as red video blood spews out.

The beheading is Monarch's concession to the trend toward video gore. "You've got to have it," explained Jackson Y. Dott, the 36-year-old president and chief executive officer of the Baltimore-based company.

Having beat a retreat from the computer game wars of the 1980s, the company is now back with a new generation of battle software that it hopes will establish a beachhead in the $1 billion-a-year video game market. Monarch Avalon is best known for its sophisticated board games of strategy and diplomacy sold under the Avalon Hill name.

"We're entering a brand-new era," said A. Eric Dott, Monarch's founder and chairman and father of Jackson Dott. "We've put a new direction into the company."

The Dotts hope the new computer games, along with a new national magazine aimed at girls ages 7 to 14, will revitalize the 45-year-old company, which has been been plagued by declining sales, quarterly losses and a stock price that's been stuck between $2 and $3 since 1988.

The Dott family controls about 38 percent of the company's 1.6 million shares, which trades on the Nasdaq exchange.

The planned Aug. 1 launch of Girls' Life is a particularly dramatic break from Monarch Avalon's past. The glossy magazine, which will feature articles on such topics as popularity and slumber parties, is a far cry from the company's better know cerebral board games, which are played by the likes of Henry Kissinger and Walter Cronkite.

Eric Dott said he got the idea more than two years ago when they started doing research on the female market and found there was a need to boost self-esteem among young girls. "We decided to come up with something where girls could really shine," he said.

The bimonthly magazine, to be sold on newsstands and by subscription, will not advertise the Monarch's board or computer games, company officials say.

"We feel so strongly in what Girls' Life is setting out to accomplish that we don't want it to be an in-house magazine," said Jackson Dott.

Closer to its traditional business are the new computer games, which feature sharp graphics, digitized speech and "a lot of player interaction," according to Eric Dott.

Since April it has put out two games -- Kingmaker, based on the War of the Roses in 15th-century England; and Operation Crusader, based on the World War II exploits of German Field Marshall Erwin Rommel in North Africa.

The company, which has a work force of 120, plans to have another eight computer games on the market by the end of the year, the elder Mr. Dott said.

Since being released, Kingmaker has sold 40,000 copies, and Operation Crusader, which is now available only for McIntosh computers, has sold over 6,000. Operation Crusader sales are expected to pick up when the IBM-compatible version is released in about a month.

Kingmaker was featured on the March cover of Computer Gaming World, which said the game "may signal the emergence the type of computer war game that many of us have always wanted to see out of Avalon Hill." Both Kingmaker and Operation Crusade were selected to be part of the "Software Showcase" of outstanding computer programs at the Consumer Electronics Show to be held in Chicago later this month.

"I've never been so enthusiastic," Eric Dott said, adding that he got more than 250 orders for the new games at the recent American Booksellers Association convention in Los Angeles.

The company is hoping that the new computer games, coupled with Girl's Life, will provide it with the necessary tools to win its most important game -- the profit game -- a contest they have been losing for its last two fiscal years.

1993 revenues down

Revenues from game-board sales along with the company's printing, direct mail and envelope manufacturing operations totaled $6 million for the year that ended April 30, 1993, down $848,000 from the previous year. The company lost $153,000 as game sales dropped by 18 percent to $3.5 million.

While final figures for the most recent fiscal year -- ending April 30 -- have yet to be released, the company expects to report a loss, Jackson Dott said. For the first nine months that ended Jan. 31, the company lost a net $33,000.

But the company has a rock-solid balance sheet, with no long-term debt and stockholders' equity of 90 percent of assets.

The company reached its peak profit of $1.1 million in 1982 as the company's game boards took off, and it also got several large printing contracts, Eric Dott said. Several months after that, in January 1983, the company stock reached its peak of $21.50 a share.

The company made its initial foray into the computer market that same year but pulled out three years later when its games began to lag those of competitors.

But the rising popularity of computer and video games produced a shift in the market, one that Jackson Dott blames for the declining sales of its 400 board games.

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