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LucasArts' quest to be No. 1
SAN FRANCISCO--In September 2004, Jim Ward met with the director George Lucas at his office at Skywalker Ranch near here.
At the time, LucasArts, the video game company created by Lucas in 1982 and run by Ward, was in disarray. The division was making too many mediocre "Star Wars" games, it was rife with internal rivalries and it was in such lackluster financial shape that bonuses for employees were scrapped that year.
Ward, a veteran Lucasfilm marketing executive who had been named president of LucasArts only four months earlier, was there to present Lucas with a business plan, but he had a few questions of his own. Most important, did Lucas have the desire to turn LucasArts into one of the top five video game publishers? Indeed, Lucas said, he did.
"We can do this ourselves," Ward recalled Lucas telling him. "We will put our resources behind this."
LucasArts is not No. 5 yet. But last year it ranked No. 8 in sales, up from No. 13 a year earlier, according to the NPD Group. And, Ward, 46, is being credited with a turnaround. While No. 8 may seem low in an industry obsessed with No. 1, LucasArts got there selling a fraction of the games its competitors did.
The success was buoyed by two new "Star Wars" games, "Star Wars Battlefront II" and "Star Wars: Episode III--Revenge of the Sith," which were the second- and third-top-selling games last year, after "Madden NFL 2006," according to NPD. And LucasArts had a hit with "Mercenaries," a war game published by LucasArts and developed by Pandemic Studios that became the best seller based on a new property. And there are more non-"Star Wars" games on the way, including one based on the Indiana Jones character.
Analysts and others in the industry agree it is a promising turn for LucasArts and, in particular, Ward. But his most challenging days may be ahead. The video game industry has been in the doldrums for months; video game sales are lagging as consumers wait to buy the next generation of consoles, including the PlayStation 3.
Moving past the franchise
And perhaps most important, Lucas has no plans to make any more "Star Wars" movies. That means LucasArts will have to work that much harder to come up with ideas of its own. "We are not the 'Star Wars' game company," said Micheline Chau, president of Lucasfilm. "And Jim knows what he has to do."
While the games division makes up about 25 percent of overall revenue for Lucasfilm, Chau said, it accounts for only 10 percent of the company's operating profit. This is why one of Ward's main goals is to create original franchises.
"The 'Star Wars' brand is a massive advantage, but they are going to have to market new innovation," said John Riccitiello, a partner at the video game investor Elevation Partners, who has known Ward for several years. "It's early. It may take another five years for their story to develop, but it is going to be interesting."
Sitting in his office overlooking the San Francisco Bay one recent morning, Ward reflected on what he and his team had done so far. It was at a town hall meeting in August 2004, the month before he met with Lucas, that he outlined his strategy in an auditorium filled with staff members. It seemed simple: LucasArts would make high-quality games, and deliver them on time and on budget.
"I learned this from George," said Ward. "There are these countless meetings where he is rational, laid back. But then he sets the bar so high you begin to think, like, this guy is out of his mind."
To illustrate the point, Ward raised his right arm in the air, higher than the left. "I said, 'Gang, this is what we are doing,' " said Ward, slowly raising his left arm to meet the right. "Now they've learned that if they come remotely close to this, they can do amazing things."
Before joining Lucasfilm in 1997, Ward had distinguished himself for 13 years as an aggressive advertising executive working with the likes of Apple Computer, Nike and Microsoft. While working at the advertising firm of Wieden & Kennedy, he was involved in the introduction of Windows 95 for Microsoft. He and his colleagues recommended that Microsoft use the Rolling Stone's hit "Start Me Up" in its now-famous campaign.
SAN FRANCISCO--In September 2004, Jim Ward met with the director George Lucas at his office at Skywalker Ranch near here.
At the time, LucasArts, the video game company created by Lucas in 1982 and run by Ward, was in disarray. The division was making too many mediocre "Star Wars" games, it was rife with internal rivalries and it was in such lackluster financial shape that bonuses for employees were scrapped that year.
Ward, a veteran Lucasfilm marketing executive who had been named president of LucasArts only four months earlier, was there to present Lucas with a business plan, but he had a few questions of his own. Most important, did Lucas have the desire to turn LucasArts into one of the top five video game publishers? Indeed, Lucas said, he did.
"We can do this ourselves," Ward recalled Lucas telling him. "We will put our resources behind this."
LucasArts is not No. 5 yet. But last year it ranked No. 8 in sales, up from No. 13 a year earlier, according to the NPD Group. And, Ward, 46, is being credited with a turnaround. While No. 8 may seem low in an industry obsessed with No. 1, LucasArts got there selling a fraction of the games its competitors did.
The success was buoyed by two new "Star Wars" games, "Star Wars Battlefront II" and "Star Wars: Episode III--Revenge of the Sith," which were the second- and third-top-selling games last year, after "Madden NFL 2006," according to NPD. And LucasArts had a hit with "Mercenaries," a war game published by LucasArts and developed by Pandemic Studios that became the best seller based on a new property. And there are more non-"Star Wars" games on the way, including one based on the Indiana Jones character.
Analysts and others in the industry agree it is a promising turn for LucasArts and, in particular, Ward. But his most challenging days may be ahead. The video game industry has been in the doldrums for months; video game sales are lagging as consumers wait to buy the next generation of consoles, including the PlayStation 3.
Moving past the franchise
And perhaps most important, Lucas has no plans to make any more "Star Wars" movies. That means LucasArts will have to work that much harder to come up with ideas of its own. "We are not the 'Star Wars' game company," said Micheline Chau, president of Lucasfilm. "And Jim knows what he has to do."
While the games division makes up about 25 percent of overall revenue for Lucasfilm, Chau said, it accounts for only 10 percent of the company's operating profit. This is why one of Ward's main goals is to create original franchises.
"The 'Star Wars' brand is a massive advantage, but they are going to have to market new innovation," said John Riccitiello, a partner at the video game investor Elevation Partners, who has known Ward for several years. "It's early. It may take another five years for their story to develop, but it is going to be interesting."
Sitting in his office overlooking the San Francisco Bay one recent morning, Ward reflected on what he and his team had done so far. It was at a town hall meeting in August 2004, the month before he met with Lucas, that he outlined his strategy in an auditorium filled with staff members. It seemed simple: LucasArts would make high-quality games, and deliver them on time and on budget.
"I learned this from George," said Ward. "There are these countless meetings where he is rational, laid back. But then he sets the bar so high you begin to think, like, this guy is out of his mind."
To illustrate the point, Ward raised his right arm in the air, higher than the left. "I said, 'Gang, this is what we are doing,' " said Ward, slowly raising his left arm to meet the right. "Now they've learned that if they come remotely close to this, they can do amazing things."
Before joining Lucasfilm in 1997, Ward had distinguished himself for 13 years as an aggressive advertising executive working with the likes of Apple Computer, Nike and Microsoft. While working at the advertising firm of Wieden & Kennedy, he was involved in the introduction of Windows 95 for Microsoft. He and his colleagues recommended that Microsoft use the Rolling Stone's hit "Start Me Up" in its now-famous campaign.
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