Monarch Counts On Pc Games

February 17, 1995|By Kim Clark | Kim Clark,Sun Staff Writer

Eric Dott will ride up to the Toy Fair in New York today, taking a few high-tech computer games, some low-humor cardboard flipping disks called "pogs," and hopes of cementing a turnaround for Baltimore-based Monarch Avalon Inc.

Sales of its board strategy games, such as "Diplomacy" and military games such as "Panzerblitz," have been in decline, and Monarch has lost money on its games for the past three years.

But company executives say this will be the year -- and this weekend's annual gathering of toy buyers will be key to the year -- that they finally move into new and growing markets.

Although Monarch lost $95,000 on sales of $3.2 million in its first half, which ended Oct. 31, Mr. Dott predicted it would end 1995 in the black.

"Everything is falling in place beautifully," said Mr. Dott, who is chairman of the company.

Everything, in this case, is the company's 1994 return to the computer game business and its launch of a girl's magazine.

After several years of conserving its cash, Monarch has started spending its large reserves on new ventures. Since last year at this time, Monarch has spent $500,000 on additional printing equipment and allocated another $500,000 for the start-up losses of its new magazine, Girl's Life, Mr. Dott said.

And the number of employees has increased by 25 to about 145 in the past six months.

"We are spending money like water," Mr. Dott said. But he said the investments already are paying off.

Although the new girl's magazine will probably lose money for another year, subscriptions are increasing, he said. And with a hTC new set of computer programmers, the latest computer games are winning prizes and customers, he said.

"We're an all-new company," Mr. Dott said.

If so, it is a long time coming.

Game players say that from 1980 to 1994, the company bungled its attempts to convert its military board games -- which often feature inch-thick rule books and complicated maps -- into computer games.

Computer Gaming World magazine, for example, criticized Monarch's previous attempts at grabbing a piece of the $1 billion-a-year computer game market as "a dismal failure."

But the company seems to have learned from its mistakes, and the games introduced since last year have been excellent, said writer Terry Lee Coleman.

In the March issue of the magazine, he noted, a reviewer praises the company's newest computer game -- "Flight Commander 2" -- as "a beautifully executed program and a tremendous amount of fun."

And some customers say Monarch's computer games are just what's needed to save the company from the decline of board games.

"Computer games are the way of the future," said Eric Allison, who buys toys and games for The Armory, a game store in Northwest Baltimore. "The computer makes the rules a little easier to digest" and introduces the games to a new generation of customers, he said.

In addition, he likes Monarch Avalon's decision to start offering .. toys for younger kids, such as "pogs."

But some industry analysts are skeptical.

Monarch stock is thinly traded and has wavered between $2 and $3.75 in the past year, indicating little investor faith. It closed at $2.125 on Feb. 8, the last day it traded.

William Loomis, a Ferris, Baker Watts Inc. analyst who recommends the stock of other game makers, said he steers clear of Monarch because company executives have ignored his requests for financial information and don't seem to care about increasing the share price.

"They are not working for the shareholders," he said.

Mr. Dott and his son control about 45 percent of the stock.

But longtime fans of Monarch Avalon games are cautiously optimistic.

Mark Pitcavage, who plays board and computer games when he isn't studying for a doctorate in history, said he's glad the company is shifting to the booming computer market.

He said the key will come later this year, when Monarch is scheduled to release new computer games. "This is going to be the big test."

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