Price Central Network, Inc.

Overview

Virtual Vegas, Inc. is a prime example for a boom era enterprise that skyrocketed during the dotcom craze and dwindled into oblivion as quickly, not without taking heaps of big business money with it. Within a few years in the late 90s, VirtualVegas.com and its subsidiaries grew to be the web’s most popular game network, drew a lot of industry attention and huge amounts of investment money and, after a series of sales and mergers, ended up as a mega-flop in the hands of French mega-corporation Vivendi Universal.

Quite true to the original, the Virtual Vegas’ short history began somewhat seedy when the young multimedia entrepreneur David Herschman and his partner Hikaru Phillips, who had in the early 90s created adult Apple Quicktime movies with their start-up Interotica and later published candid “VideoPictorials of the most beautiful women in the world” on an interactive CD-ROM magazine called Go Digital, decided to launch an internet gambling platform propelled and advertised by traditionally distributed multimedia games. In 1994, they formed Virtual Vegas, Inc. in Venice, California, along with the website VirtualVegas.com. “[Gambling] is a vice that will drive masses of people to interact in virtual worlds”, David Herschman would prophesy lucidly in Wired magazine’s October 1995 issue. Herschman’s Virtual Vegas was one of the pioneers.

The company’s supposed killer applications, the card game sim Turbo Blackjack and an interactive beauty pageant called Ms. Metaverse (both released in August 1995), mixed doubtful product quality with equally doubtful pinup girl presentation and turned out to be utter trash – on the one hand. On the other hand, they were a dashing blend of everything vogue in the e-entertainment biz: full motion video on CD, brightly colored render graphics, internet tie-in (the games linked directly to the website via CompuServe’s free Mosaic Direct software – a clever cooperation on the side of Virtual Vegas) and an intriguing dotcom idea that seemed to spell big profit.

Not that the company made any yet. The games, distributed by Herschman’s pre-VV company Electromedia and designed to draw customers to the website, didn’t find any in the first place. And the website had to offer its casino games for free, since taking real money for the bets would have violated federal laws. While competing casino start-ups moved to the Caribbean, Virtual Vegas went looking for sponsors that awarded prices – an idea that proved to work out quite nicely. The multimedia games idea was dropped, the forcefully announced titles Assault Poker and Net Casino never saw the light of day. Instead, the company transformed.

In July 1996, Herschman founded Prize Central Networks, Inc. as an umbrella for VirtualVegas.com and a score of related websites such as SlotsZone.com and SolitaireZone.com, all centered around the idea of collecting virtual “tokens” through game wins and redeeming them for sponsored prizes; a Nintendo Game Boy, for example, was 8.000 tokens, which equaled winning 4.000 solitaire hands. In February 1999, Herschman merged the original Virtual Vegas Inc. with the Prize Central Networks, Inc., keeping the latter name. The website VirtualVegas.com remained. By December 1999, Prize Central announced that according to PC Data Online, it was the most popular game network on the internet, topping Microsoft’s Zone.com.

It was the time of the dotcom boom, and Herschman decided to cash in. In May 1999, Prize Central Networks sold its blackjack.com domain for $460,000. On March 29, 2000, Havas Interactive, the entertainment subsidiary of French industry giant Vivendi SA, bought Prize Central Network, Inc. for an undisclosed amount estimated at $140 million and merged it with WON.net, an internet gaming portal and server platform (e.g. for Half-Life, Counter-Strike) acquired when Havas had bought Sierra in April 1998. The joint entertainment portal was called Flipside.com, David Herschman became executive vice president for sales and marketing. On February 6, 2001, Vivendi bought interactive games company Uproar, Inc. for an additional $140 million to strengthen Flipside. On its prime, Flipside was valued at $1.3 billion.

Despite continued growth (Flipside attracted about 11 million unique visitors in October 2000, rising to nearly 13 million in Fall 2001) and solid advertising revenue, the Flipside Network was immensely oversized, its value greatly exaggerated. As start-ups imploded by the thousands in 2001, Vivendi fired 150 people, half of Flipside’s staff, only one month after the Uproar acquisition. The company’s value stalled. On July 8, 2003, Vivendi sold Flipside, Inc. to the US direct marketing company The Vendare Group for an undisclosed amount reported to be “considerably less” than $140 million. As competing websites sped ahead, customers turned away, and Flipside’s unique visitors fell to 7 million per month as of 2005.

In November 2003, the VirtualVegas.com website went “temporarily offline” and stayed that way through all of 2004, until it was finally taken off the web.

David Herschman died in April 2003 at the age of 35.

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