Eidos Interactive Ltd.

Overview

Eidos is a videogames developer and publisher based in the UK. The company operates publishing offices in Europe and US (San Francisco), and is headquartered in Wimbledon, southwest London.

The Eidos group includes some strong development studios, including: Crystal Dynamics, developer of 2006's Tomb Raider: Legend; IO Interactive, developer of the Hitman series; and Pivotal Games, developer of the Conflict series. Eidos also has a 25% stake in Rocksteady Studios, developer of Urban Chaos: Riot Response. The company also has a mobile games division, focusing on cellphone technologies.

Originally a specialist in video compression technology, the foundations for Eidos as it stands today were laid in the 1995-96 period through a series of acquisitions and mergers. British development houses Domark Group Ltd., Simis Ltd., and The Big Red Software Company Ltd. were combined to form Eidos Interactive. This was followed by the acquisition of 8-bit publishing powerhouse US Gold, which - most significantly - brought with it a small but successful British studio called Core Design.

Following the unexpected success of Core's first Tomb Raider title, Eidos found itself catapulted to the centre of massive attention - and showered with massive profits. A string of strong franchises were born, including Commandos, Hitman, Deus Ex, Legacy of Kain and Thief. Infamously, Eidos also burnt millions of dollars making John Romero's Daikatana - and on the Ion Storm development offices in Texas where the title was created.

After the successes of the late 90s, the beginning of the 21st Century brought troubles for Eidos, as a string of financial setbacks hammered the company's reputation at the London stock exchange. By 2004 the company's once-soaring shareprice was brought down low, leaving the door open for a potential acquisition, and rumours spread of competitors being given tours of Eidos' Wimbledon offices.

In early 2005 US venture capital group Elevation Partners, lead by former Electronic Arts president John Riccitiello and famously backed by U2 lead singer Bono, tabled an offer for the Eidos group. Shortly thereafter, the small but financially strong UK publisher SCi Games tabled a counter offer, culminating in a final package totalling $75m in cash and shares - and proposals to reduce Eidos' running costs by £14m ($26m). Elevation Partners, backed by the existing Eidos board, stood firm with an offer of $71m. The Eidos shareholders opted for SCi's deal and in April 2005 Elevation withdrew, leaving the way clear for SCi's bid.

The SCi acquisition and restructuring resulted in the immediate replacement of the Eidos board and many of the company's senior managers. Only Eidos' British figurehead, Ian Livingstone (granted an OBE by the Queen in 2006), remained. SCi succeeded in vastly reducing costs, partly by de-listing Eidos from the stock exchange, thereby eliminating the significant costs associated with being a listed company. Major new titles Tomb Raider: Legend and Hitman: Blood Money were pushed into 2006 in order to deliver high-quality products, resulting in widespread acclaim and strong sales performance for both.

Navigating the difficulties of the PS3/ Xbox 360 transition will be make-or-break for the new SCi group. Mid-2006 brought news of fresh interest from potential buyers for the newly-restructured group, leaving many wondering how long the UK's last major publisher would remain an independent force.

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