The company was formed by three people - Martin Alper
, Frank Herman
, and began trading on 1 April 1984. They had some financial
backing from another small group of investors. All had experience of video distribution. The first premises were in the back of Alan Sharam's offices (he was also a surveyor at the time) in George St, Central London. At no time did the company employ in-house programmers - all product was sourced from other publishers and then as we became successful, directly from individual authors and from software houses. In the beginning they used to make up packages of 100 tapes ("dealer packs") and send them out to
newsagents, toy shops, motorway service stations, just about anyone who would take them. At that time the mainstream retailers in the UK refused to take budget games because they had had bad experiences in the past. Mastertronic eventually won them over by showing that new games would regularly be produced to replace old stock and by producing games that sold well. Another key figure at the time was an ex-professional cricketer (Nottinghamshire) batsman Richard Bielby who ran a distribution network
servicing a large number of small retailers.
A couple of enterprising dealers spotted the company's potential and became its partners in France and Germany.
Much of the early output was supplied by just two producers - the Darling brothers (who later formed Codemasters
), and Mr Chip Software who continued to do games for them for some time.Anthony Guter
joined in August 1985 as Financial Controller. He also managed the company's computerised business systems. During 1985 -87 the company boomed, with many games selling in large numbers. Some key retailers began to rely on
the company not just to supply all their budget games but to act as wholesalers for full price software as well (Toys'R'Us being the most prominent).
Martin Alper went to the USA in 1986
to set up Mastertronic Inc.
. The UK company was managed by Frank Herman, whilst Alan Sharam increasingly specialised in sales and logistics (warehousing, packaging, controlling production schedules). After the Sega takeover Frank became deputy Managing Director of Sega Europe, and Alan was Managing Director of Sega UK. Martin became resident in the
US and continued to work for Virgin Interactive, which was soon taken over by Blockbuster Video.
In early 1987 the company bought out the UK interests of Melbourne House. This took them into full price software, something they have hitherto ignored. At this
time they were also developing arcade software and hardware (based on the new Amiga chips) and there was an idea that the arcade games would be released on the Melbourne House label.
In 1987 Virgin Group bought the 45% of shares
held by the investor group mentioned above. The remaining 55% was held by Alper (25%), Herman (20%) and Sharam (10%) and they sold out in 1988 in a highly complex deal which required their continuing involvement in the
business and achievement of profit and cashflow targets. Virgin Games was struggling as a full price games publisher and had no control over its distribution.
It was Frank Herman who, in early 1987, spotted that Sega
had no UK distributor for the Master System range. Mastertronic obtained the franchise for one year and were then appointed as
distributors in France and Germany as well for a further year, and thus Sega Europe was born. As a result nearly all the staff moved over to Sega when they bought the business and only a handful of Virgin games programmers stayed with the publishing side (quickly renamed Virgin Interactive
Mastertronic was eventually bought up by Virgin and became Virgin Mastertronic before getting completely sucked into Virgin Interactive Entertainment
Company Location (October 1984)
111 Park Road