Stormy weather

Hot new computer game maker ION Storm appears to have all it needs for success -- top talent, plenty of money, and legions of anxious fans. So why is its future so cloudy?

"A lot of people have made a really big deal about this," says Porter. As he speaks, Porter sits at the head of a marble table in ION Storm's glassed-in conference room. Behind him is a stunning view of east Dallas. "I look at it as a real positive. The team that we have on there now is...incredibly motivated, incredibly, incredibly talented...The guys we hired to replace them were, you know, heavy-hitters...Some people who left were going to be phased out anyway. "

Though ex-ION Stormers laugh about Porter showing up in the early days decked out in business suits, he since appears to have embraced gamer chic. During this interview, he sported jeans and sneakers and a ponytail streaked with gray, which made him appear older than his 38 years.

About Daikatana, he remains upbeat: "We expect to sell two and a half million units of Daikatana." He is no less bullish about Tom Hall's project, Anachronox, a role-playing game due out this summer. "We expect to sell about two and a half million units of Anachronox." As support, he cites "awards" handed out before anyone has ever seen the games: "They've already both won 'best new game of 1999.' The most-anticipated titles of their genres."

Perhaps it is no coincidence that two and a half million units of Daikatana is about what ION Storm needs to sell in order to pay back its advances from Eidos and begin earning royalties, according to documents leaked to the Observer. When ION Storm first prepared its business plan in the fall of 1996, they projected Daikatana would sell something more like 175,000 retail copies. Of course, the plan also projected that Daikatana would be out in 17 months, and would get ION out of debt in 26 months.

Internal e-mails also hint at what Porter would never publicly admit: The defections may have killed the ION Storm owners' plan to sell part of their equity to Eidos for $12.5 million.

Like many of the men who run software game design companies, Porter is a self-taught programmer who worked his way through a half-dozen companies before striking out on his own. Born in Chicago, Porter set out to enter the seminary, attending tiny Central College in Pella, Iowa, for three years before dropping out to work in the software industry. According to testimony from a deposition, he also worked for a while as a male stripper. (He danced under the name "Preacher Boy.")

Porter has undeniable talents for myth making, self-promotion, and landing on his feet. Take, for example, the story of his previous company, Distant Thunder, a game developer consisting of himself and artist Jerry O'Flaherty. According to ION's press materials, "[w]hen Todd Porter turned a $30,000 investment into a $3 million return, it was a sign of things to come." In fact, this Midas-touch story is exaggerated. In 1994, Porter borrowed $30,000 from a software-industry investor named Stephen Kennedy. According to Kennedy, Porter quickly ran through the cash, as well as through a $240,000 advance from Merit Software. The company was about two weeks away from folding when Porter got lucky: publisher 7th Level came in with new money from its initial public offering and saved the day. In February 1995, they sold the company to 7th Level for $1.5 million. Porter got 70 percent. Distant Thunder, which existed only a year, never produced a game. It did begin G-Nome, a title that 7th Level eventually published. It flopped. (In 1996, a computer-gaming magazine named G-Nome "Coaster of the Year"--as in, fit to put your drink on.) As for 7th Level, in 1997 it got out of the game industry.

According to Porter, Romero sought him out to start ION Storm. (Romero declined to be interviewed.) "[Romero] had heard about what I did with Distant Thunder," says Porter. "And he was looking for a guy to do the business side...He wanted to start a company, and he wanted a guy with business sense behind it...and I said, well, I'll only start it if I can bring Jerry [O'Flaherty]. And he said well, only if I can bring Tom [Hall]."

Business sense or no, Porter originally came to ION Storm as game developer. When ION got its start late in the summer of 1996, it had five owners: game designers Porter, Romero, and Tom Hall; art director Jerry O'Flaherty; and Bob Wright, the sole "biz guy." With entrance of Mike Wilson--also a "biz guy"--in January 1997, the five owners became six.

Porter quickly revealed, however, that his true talent lay not in design but in arrogating power. In the beginning, Romero was to own the biggest share of ION, 30 percent, and the "suits," at 5 percent apiece, would have the least. Porter, O'Flaherty, and Hall were to have 20 percent each. According to numerous sources who were there at the start, however, Porter was unhappy with his percentage, and demanded that O'Flaherty surrender 5 percent to him. (O'Flaherty declined to be interviewed.)

But they were busy starting a company. There were publishing deals to negotiate and employees to hire. Game publishing was hot, and Romero was hot, and they dangled him as publishing-contract bait. Soon ION snared a whopper: Game publisher Mindscape offered the partners a $13 million three-game contract with a $3 million per game advance, as well as $4 million for 4 percent of the company--a figure that implied ION was worth $100 million. "We used it as the deal to beat," Bob Wright recalls. In December 1996, London-based publisher Eidos beat it. Eidos had fresh cash from an initial public offering and needed the credibility that signing John Romero would bring. On Christmas Eve 1996, Wright and Romero came home from San Francisco, Eidos' U.S. headquarters, with a six-title, $22 million deal that promised them a 40 percent royalty. (ION's effective royalty rate is actually less, since the company must pay companies from which it licensed programming technology.)

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