Failing Up: The Story of Acclaim Entertainment

What do you think of when you hear the name Acclaim Entertainment?  Do you think of Turok, one of the first games of the Nintendo 64 era, or do you think of the myriad 16-bit Simpsons trash titles? Acclaim was a behemoth of the nineties and had an undeniable impact on the industry, from the creation of the ESRB ratings system to the introduction of motion capture in game design, but they’re now mostly remembered as a punchline about abandonware and corny marketing. There’s actually another layer to Acclaim’s story — one that is often forgotten, a laundry list of bad behavior that’s practically a parody of executive greed during the company’s final years.

Acclaim was co-founded in 1987 by Greg Fischbach, Jim Scoroposki, and Robert Holmes, and was named to put themselves ahead of Activision on release listing — as Activision had previously done to get ahead of Atari. One of the most interesting, and telling, facts about their start is that they built themselves on “factoring,” a risky retailer tactic which set up third parties to buy the accounts receivable for their games up front, at a discount, and then when they successfully sold the games, those third parties were paid directly. They were playing a volume game that depended on curb appeal and recognizable IP to snag speedy sales without building much brand loyalty. In 1990, with a few hits under their belt thanks to ports like Star Voyager, Wizards and Warriors, and Double Dragon II, Acclaim was up there next to Activision and EA as one of the top games publishers in the world.

Acclaim

An Immortal Monday

In the contemporary coverage of these early days of Acclaim it seems like there was a vision for the future. A 1993 New York Times piece quoting Acclaim CEO Holmes stated that “The new games… will evoke the kind of ‘willing suspension of disbelief’ that causes the heart to miss a beat when reading a suspenseful book or watching an action movie,” going on to note that “Mr. Holmes envisions software that allows players to create their own scenarios and control the actions of characters, a concept he calls synthetic actors.” Maybe it was just PR, or maybe they really believed they were on the precipice of something great.

Acclaim had a stable of successes that made them a power player in a booming industry. The next move they made was the one that set them up for their greatest achievement; they bought the rights to port coin-op games by Williams Arcade, who now owned Midway. One of those games was Mortal Kombat. What Acclaim achieved with Mortal Kombat would indeed cause a sea change in the industry, but not quite in the way Holmes indicated in that interview.

For Mortal Kombat, Acclaim dropped an unprecedented $10 million dollars in marketing and gave us the first example of a video game release becoming a media event. “Mortal Monday” transplanted Mortal Kombat from arcades into the living rooms of kids across the United States, albeit with some technical and aesthetic sacrifices, as was common at the time.

When Mortal Kombat‘s violent content garnered national media coverage, Fischbach testified before Congress and ended up shepherding the ESRB into existence in an effort to keep content decisions in the hands of the game companies and away from the government. At the same time, Mortal Kombat’s gorier Sega Genesis version pushed Sega ahead of Nintendo in the console wars. This was not just sniping between sparring executives either — even analysts were paying attention to the debate, “‘Right now, I think they [Nintendo] are lost,’ said Kaori Hasegawa, an analyst with Salomon Brothers in Tokyo… Ms. Hasegawa is placing her stock recommendation on Sega. ‘Although Nintendo is still a growth company, it will not be a leader in the next generation of games,” she said.’”

Acclaim
GamePro

Dinosaur Hunters and Things of That Nature

While 1993’s headlines were dominated by Mortal Kombat, in 1994 Acclaim was relatively quiet, despite the fact that they pushed out 20 games that year, doubling their output from previous years. They were making big moves like buying a 65,000 square foot campus in Long Island with space for a state-of-the-art motion capture studio for four million dollars, and purchasing Valiant Comics for $65 million. In the words of James Fink, a former Acclaim employee and former Mortal Kombat world champion, “They thought they were Microsoft, moved to Glen Cove and built a building and named the street Turok Way.” 

In 1995 Acclaim’s growth continued as they brought developers in-house, purchasing Iguana Entertainment in Austin, Sculptured Software in Utah, and Probe Software in the United Kingdom. They built an elaborate marketing campaign and PR blitz for the game tie-in to the year’s most anticipated summer blockbuster, Batman Forever. The sneak-peek coverage of the Batman Forever game oozed public relations, but the hype for Acclaim’s in-house mocap studio and carefully timed release was very real. However, once it was released, the game was universally panned in reviews.

Acclaim experienced massive expansion and posted their highest revenue ever in 1995, but by the end of 1996 it all came crashing down. They had to take a $51 million dollar charge for all their unsold 16-bit cartridges, an SEC investigation and shareholders alleged that they falsified sales and parked inventory in warehouses, there was an abrupt exit by their CEO Holmes, and they ended the year with rumors of insolvency. In an email, Fink told me, “I felt that the company was trying to run before walking, as did others. We had become aware that the titles we were releasing were selling well out the gate, but were being labeled as trash by consumers. While the heads of the company pushed a narrative that the Batman game was gonna be huge, the development teams knew the same old corners would be cut and the game would be released with mediocre quality.”

The N64 was released in September of 1996 in North America, and Turok was slated to be one of the first ten games on the new console. But the game was continually delayed and wasn’t released until March of 1997, and the strong reviews were overshadowed by an underlying narrative that it was the last gasp of a dying company. In their February 1997 issue, GamePro referred to it as “Turok: Deadline Hunter” and a New York Times piece featuring the upcoming game was headlined “For Acclaim, The Road Back Is Rocky” with a lede that stated “It might take more than a dinosaur hunter named Turok to rescue Acclaim Entertainment at this point.” Acclaim’s reputation haunted even the best Turok reviews. Total 64 magazine said in its positive review, “This’ll go a long way towards re-establishing Acclaim’s reputation, after a recent dodgy patch which has seen too many sub-standard products and resultant decline in their market standing.” It seemed that Acclaim was headed toward extinction. 

Acclaim
Next Generation

End of the Century

The start of 1998 didn’t look great for Acclaim, but they had a few final tricks up their sleeve. Some original titles were on the way, including Forsaken and Vexx, and sequels to Shadowman and Turok. A Q&A with Fischbach in Next Generation magazine offered a little insight into the leadership at the time, and with a headline like “To Hell and Back with Acclaim” and a moody full page photo spread of Fischbach looking pensive on windswept Long Island beaches, it did not disappoint. To Next Generation’s credit, they really pushed Fischbach to answer for Acclaim’s practices (though there were no mention of lawsuits and SEC investigations). Fischbach admitted that they hid “not-so-good-stuff in between these big hits,” though got defensive when pushed on why they flooded the market with B-grade games, essentially admitting they didn’t care about the quality of games they released, and confirming, “What we wanted to do was take a property and maximize our revenues from it — exploit it as much as we could, all over the world.” 

In 2000, Acclaim scrambled using the tried-and-true actions of a floundering public company; a carousel of new executives, layoffs for those not in the c-suite, and selling off stock. In addition to traditional financial news, Acclaim’s financial actions during 2000-2004 were closely followed by Gamasutra, one of the first game outlets to report regularly on industry financials. To everyone’s surprise, in early 2001 Acclaim began posting a profit again.

In July 2001 Acclaim also sold $9.4 million shares of common stock to institutional investors, giving the company $33 million in new funds, with which they “planned to pay down debt, finance product development and marketing, and make acquisitions.” Acclaim was optimistic, and stated that they had “expanded our release schedule and reduced our dependence on N64… we have the financial resources, including $78 million in cash on the balance sheet that will allow us to be a leading publisher for each of the next generation of consoles.” 

It’s interesting to see the differences between coverage in the first half of 2002 and the second half. Headlines spoke of a big comeback, and Acclaim even announced they were opening a new studio in Manchester, UK. In March, the New York Times published an article titled “Acclaim Entertainment: Back in the Groove” that indicated forthcoming games like Vexx and Aggressive Inline would continue to push the company forward. In April 2002 Gamasutra reported Acclaim posted an increase in Q2 revenue. But what followed this optimism was a parade of more failed games. Aggressive Inline bombed, as did most of their sports titles. “Aggressive Inline doesn’t push any boundaries, raise any bars, and won’t grab your imagination… but it’s playable,” said one lukewarm review, and a review of All Star Baseball 2002 said “Sadly, yet another Acclaim title fails to be anything but boring trash.” 

During this time some of Acclaim’s marketing went completely off the rails. They offered to pay the traffic fines for anyone caught speeding to promote Burnout 2, tried to pay people to put ads on the tombstones of dead family members to promote the Shadowman sequel, offered an Xbox and $500 if you named your child Turok (a later investigation reveleaed that the “winners” were actually paid actors), and published Dave Mirra BMXXX, which attempted to replicate the success of their earlier Mirra title (but added boobs) and led to a lawsuit that ultimately ripped the BMX pro’s name off the game. The gambit earned Acclaim more scornful press, and in a quote Vinnie Longobardo, senior vice president for programming at G4 said this type of stunt was, “a cover-up for not having anything completely innovative and new on the game-play side” and PlayStation World Magazine dropped this zinger of a headline: “Man Spends 50 Days in Tent Waiting for New Turok. He Shouldn’t Have Bothered. Timesplitters 2 is Better.”

The headlines from Gamasutra over the last months of 2002 say it all: “Acclaim Shares Salvaged by Wall Street,” “Acclaim Posts Loss for 2002, Shuffles Management,” “Acclaim’s Burnout 2 Marketing Promotion Irks UK Government,” “Acclaim’s BMX Game Rejected by Major Retailers.” Executives were still undaunted, with Fischbach declaring that ”Fiscal year 2003 represents the largest growth opportunity in the history of our company… Acclaim possesses the brands, technology and vision to seize that opportunity.” The headline of that article? “At Acclaim, Too Many Lawsuits, Too Few Hits.” 

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The New York Times

Greed, Lies, and Video Games

Remember how back in 2001 and 2002, Acclaim was giving similarly optimistic quotes about financial resources and an increase in revenue? Well, it turns out they were accused of overstating earnings in advance of a stock sale that earned $21.5 million. In 2003 the New York Times, Gamasutra, and IGN reported on multiple shareholder suits against Acclaim. A Gamasutra article noted that “The company had previously disclosed a series of loans to executive officers for the purchase of homes, stock and other purposes — although it’s not known whether Fischbach and Scoroposki were among those executives who borrowed from the company.”

IGN dug into the lawsuits even further, listing grievances that included channel stuffing (a complaint they also received in the earlier lawsuit in the nineties with their 16-bit cartridges), inadequate disclosure of internal business operations, inadequate disclosure of sales results, particularly for Aggressive Inline and Turok: Evolution, inadequate disclosure about the company’s distribution and retail sales tracking information systems, and inadequate disclosure about the company’s plans to publish mature themed games (the revenge of BMXXX). 

In June of 2003 Fischbach resigned as CEO but remained on the payroll and the board of directors and continued to serve as co-chairman, and by July 2003 the SEC launched an investigation into Acclaim’s financials while Acclaim continued to post losses. Finally, in August 2004 IGN, the New York Times, Gamasutra, Ars Technica, and Gamespot covered Acclaim’s official bankruptcy. Play Magazine Australia summed it up by noting that, “For too long the wrong people were in the wrong positions making the wrong decisions that led to the wrong products, products which the consumer by and large didn’t want.”

The $150 million dollar post-bankruptcy lawsuit filed by a trustee against the executives was illuminating. A 2005 Gamespot article peeled back the layers on the lawsuit, that it “paints a picture of tawdry dealings that laundered millions of dollars through contrived avenues that netted the above defendants millions of dollars, but creditors and former employees little or nothing.” The “this company got stripped for parts by its leaders” vibe continued with another complaint that nearly $800,000 worth of artwork was stolen from the offices on the way out, leaving behind nothing but hooks, like a scene from How the Grinch Stole Christmas

Gamespot’s coverage highlighted many allegations about the pocket-lining that allegedly occurred during Acclaim’s final years, stating that “The recent history of Acclaim is replete with directors and officers rewarding each other with rich employment contracts and bonuses despite the Company’s serious financial difficulties… As a result of their stockholdings and executive positions, and despite Acclaim’s severe ongoing financial problems, defendants Fischbach and Scoroposki were able to secure employment contracts that provided them with rich salaries and benefits from Acclaim without requiring them to devote full or even passing attention to their Company duties.”

When Acclaim finally went under the staff were blindsided, but by the looks of the trustee lawsuit, executives spent the final years building elaborate safety nets for themselves. Those safety nets did not extend to their employees. But with the severity of the accusations leveled against them, Acclaim’s leadership left the industry with their reputation in tatters.

Just kidding, they’re all doing just fine. They founded their own companies and joined investment firms, and in November 2020 Fischbach announced his new indie game company, Accelerate. The announcement was covered across game and tech media, but few noted Acclaim’s fate or referenced the company’s bankruptcy or lawsuits. And so, the story of the rise and fall of Acclaim can either be a blip in video game history or a scathing indictment of executive greed — it just depends on how we decide to write about it.  

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