At 68, Bernie Stolar is still running ambitious game startups

Bernie Stolar has been in the video game business for three decades. And at 68, he’s not about to stop. He loves the industry, and he figures he’ll die if he stops doing what he loves.

Stolar recently became the chief operating officer of Elemental Path, the maker of the upcoming CogniToys, smart, connected toys that use the artificial intelligence of IBM’s Watson supercomputer to hold conversations with children. Watson is famous for beating human players at Jeopardy. It’s a promising startup, one of many that Stolar has worked at.

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Things haven’t always gone his way. He worked at Atari just before it went bust. And he was executive vice president at Sony Computer Entertainment America before it released its groundbreaking PlayStation console. But he left before the triumphant debut. He also joined Sega to help launch the Dreamcast, but he was fired before the launch. Still, he was considered instrumental in putting together a strategy that made Sega competitive, for a time.

He was also president of Mattel, and he sold Adscape Media, an in-game advertising company, to Google in 2005. He tried to get Google to move into games, but he couldn’t convince then-CEO Eric Schmidt to do so.

Since then, he has participated as an executive and board member at numerous game startups. He hasn’t always been successful, but Stolar has always been street smart and passionate about games. I caught up with him recently to talk about his career. Here’s an edited transcript of our conversation.

GamesBeat: How many years have you been in the business now?

Bernie Stolar: Thirty years.

GamesBeat: What was your first industry job?

Stolar: First game industry job, with my partner, Brian Semler, I helped start Pacific Novelty Manufacturing, which was a coin-op game company we started in 1980. We wound up selling the company to Atari/Warner. We thought we were geniuses because we sold the company for stock. Then Atari imploded and was shut down.

After that I started another company called Amitron, which burned circuit boards. We sold that for cash to the Tramiel family when they owned Atari and wound up working there. I later became the EVP for third-party software at Sony PlayStation, working for Steve Race.

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GamesBeat: That gets us to the middle 1990s.

Stolar: 1994 was when I did that, yeah. Unfortunately Steve got fired by Jeff Sagansky, who was running Sony Computer Entertainment America after others were fired. That changed the whole complex of the company because Mr. Maruyama, who was the lead board member for PlayStation in Japan, came over to restructure the entire company. Everybody else was there doing work for hire.

What happened then was, I got worried. Everybody was getting fired. I felt like I was the last man standing. I got the job offer to become president of Sega of America after Tom Kalinske left.

GamesBeat: That was right before the PlayStation launched, right?

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Stolar: Yes. The PlayStation launched in 1996. I took the Sega position based on conversations with Hayao Nakayama, who was then chairman of the company. We’d institute and bring in a new hardware system that would do online multiplayer games. That became Dreamcast. I headed that up. Unfortunately Nakayama got pushed out of the company by Mr. Okawa at the end of 1999, and when he got pushed out, I got into an argument with Japan as well. I was pushed out as well.

That’s when I was hired as president of Mattel Interactive by Jill Barad. The problem with that was, when Jill bought The Learning Company—It was the right decision for Mattel to go into the software business. They just bought the wrong company. She didn’t realize she was buying a company that had top-end revenue but no bottom line. When I joined the company they were losing a million dollars a day. That’s when the board asked me to get out of the business, which is what I did.

GamesBeat: You went through all that, and you also did the ad company that Google bought.

Stolar: Right. I went on to help start a company called AdScape Media that did in-game advertising. I took the position as chairman of the company, became CEO of the company, sold that to Google in 2006, and then got involved with helping develop Android from 2006 to right around the end of 2007.

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GamesBeat: What was it like to be a game guy inside Google before Android?

Stolar: Let’s say this. There was no interest in games at Google at the time. I went to the CEO, who was Eric Schmidt, and said, “Why don’t we put advertising in all these games and give them away for free online?” He said, “We’re not in the game business.” I said, “We’re not going into the game business. We’re not developing games. We’re taking games from publishers and streaming those through our online network.” He wouldn’t do it. That’s when I knew I should leave the company. I started helping them evangelize, but I knew there was no future for me.

GamesBeat: Then began the period where you got engaged with a lot of different startups.

Stolar: I’m still doing that now, yes.

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GamesBeat: The latest one is Elemental Path?

Stolar: Right. We’re doing a voice-activated toy, but it’s not just a toy company. It’s a technology company. The technology will go into games eventually. Think of playing a sports game where you can call the play, like in Madden or NBA 2K. It could add a whole different element to a product. You can do it on mobile or console.

GamesBeat: Are you on the boards of any other companies right now, or is Elemental Path your main thing right now?

Stolar: I was recently also sitting on the board of a company called Fizzle, a mobile messaging company, but now it’s just Elemental Path.

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GamesBeat: I remember the award show where Martin Short made the joke about how Bernie Stolar has worked at every company in the business. What would you say you’ve learned from working at so many game companies?

Stolar: To me it’s about the team and the product. If you don’t have the right team, you’re not going to win. If you look at what I did at Sega, I basically fired all the senior people from sales and marketing and brought in a whole new team. I brought in Peter Moore, who’d worked with me at Reebok. When I brought Peter in, Hayao Nakayama said to me, “Why am I hiring a shoe salesman?” I said, “I don’t care about that. I believe that he understands how to build a brand. I want to rebuild this brand, because right now we’re showing the consumer that we’re losing. We need to show them that we’re a winning company.”

He agreed with me finally, and so Peter got the job. Now he’s COO at Electronic Arts. I brought in Chris Gilbert, who didn’t work for a game company either. Now Chris is EVP for marketing and sales at Namco Bandai. I think I brought in some good key people. What’s important is that with the right team and the right product, you can build a good company. I think that’s what I’m best at.

GamesBeat: It seems like the classic pattern of foreign ownership goes like this: they hire some interesting people. They try to give them control. They ultimately fail to give them control. Then a lot of fighting happens, they fire everybody, and whatever they wanted to happen doesn’t happen.

Stolar: Jack Tretton was hired as the VP of sales when I was at PlayStation. Jack was there for almost 19 years, and I thought he did a great job helping structure the company. All of a sudden Andrew House and some of the Japanese individuals there—He was a retail person, not an online person, so they pushed him out. Shawn Leydon is an online person, but what have they done online? What have they really built? The problem, to me, is that Jack understood online. It’s not a technology you can’t learn on the job. They just didn’t want to pay his salary anymore.

GamesBeat: Sony became remarkably stable for a time, a sort of rarity in the game industry.

Stolar: I’ll give you an example. When Sony came out, Ken Kutaragi was the founder of PlayStation. It was Ken’s idea. What Tom Kalinske didn’t understand, when he had meetings with Micky Schouloff, he didn’t realize those guys weren’t creating the hardware that was going to come out. They had nothing to do with it. They were in charge of North America only. When Micky went and bought Guber Peter Productions and Sony lost close to $2 billion, that’s when he and Olaf got fired. Then it just trickled down.

I remember talking with Trip Hawkins on the phone once when I was running third-party. Trip said to me, “What does Sony know about the gaming business? You guys are crazy. This is never going to be successful.” I said, “It’s not a matter of Sony knowing about the gaming business. Sony’s hiring the right talent to run the business. We all come out of games. We have technology that’s going to beat whatever you have.” And that’s what happened.

It was Ken’s technology. The thing with Ken was, there was a separate board of directors running PlayStation within Sony. Mr. Maruyama was on board, and so was Ken. They called the shots. I had to go to Japan one week out of every month to discuss what we were doing. When Steve was president and we went to the first E3, Steve built an E3 booth that Ken Kutaragi hated. Ken told Steve to fire the marketing head and Steve got in a fight with Ken, but the marketing head did get fired. The rest was history. Steve got fired a little later.

What Tom did, it had nothing to do with what was going to take place with the PlayStation in the United States. They were just heading up North America. But they weren’t the ones running the hardware or the software of the PlayStation. If you recall, Sony bought two major development firms – one in the U.K. and one in Salt Lake City, Utah.

GamesBeat: People sure did get fired a lot in those days. How do you look back on your own experiences there? What was it like for you, and what advice would you give?

Stolar: This is what I’ve learned. I didn’t know how to manage myself upwards. I knew how to manage myself downwards and work with my team, but I lacked the understanding of how to manage myself upwards. That’s something you have to learn. There aren’t too many people out there who know how to do that. Peter Moore is one person who knows how to do that really well, and he’s a great manager as well.

GamesBeat: It was a very turbulent period in console gaming. That Console Wars book captured a lot of that. I think Tom Kalinske played a big role in that book, which focused a lot on Sega of America and the Genesis.

Stolar: There was a time where Genesis and Nintendo were going head to head. Tom ran a good business. Unfortunately the industry was changing. Tom wanted to go in certain directions and the Japanese wouldn’t allow him to do that. That’s when he left.

GamesBeat: What are some of your memories of that period?

Stolar: I loved working for Sony. I really did. But when the opportunity came up to go to Sega and help rebuild the business and come up with new hardware, I was very interested in doing it. I wouldn’t have left Sony if I hadn’t also lived in fear of getting fired along with everyone else, though. Remember, the day I left, [name – 15:50] was fired.

GamesBeat: Was there a point where you got to see what would be the Dreamcast for the first time?

Stolar: When I got to Sega I immediately said, “We have to kill Saturn. We have to stop Saturn and start building the new technology.” That’s what I did. I brought in a new team of people and cleaned house. There were 300-some-odd employees and I took the company down to 90 employees to start rebuilding.

GamesBeat: If you think back on what was the most momentous time out of all that, what stands out sharpest?

Stolar: One thing I felt strongly about and felt good about was that we needed a platform game. After the first year at PlayStation, we didn’t have a platform game. We didn’t have a Sonic or a Mario. I felt we needed that. We wanted to be able to built it in-house, so I went out looking for it.

I met the guys at Naughty Dog who’d created Crash Bandicoot. I went through Sony management and said, “I want to buy this game. It’s going to cost us $10 million.” I wasn’t sure if Sony would spend that based on what had taken place, but they had enough belief in me and my understanding of the marketplace and the content that was necessary, so Mr. Maruyama – who was in charge of Sony Music – he looked at it as buying a hit song for the label, so to speak. He approved me doing this, and I felt that added a lot to what we were doing at Sony. In 1996 we sold somewhere between six and 10 million units, and that was based on the software. Crash was a big part of that.

GamesBeat: The PlayStation’s success had a lot to do with third-party, right?

Stolar: It did, because we didn’t have a very strong first-party organization. Even though Kelly Flock was running it, what sports games did we have at that time? Just sports games from EA. Then, when I was at Sega, everyone was yelling at me about why we didn’t have EA on board. It was very simple. I had bought Visual Concepts for $10 million to go in on sports. Larry Probst came to me and said, “We want to be the only sports developer on Dreamcast.” I said to Larry, “I just bought Visual Concepts. I can’t do that. You can be the only third party, but you’re going to have to compete with Visual Concepts.” He said no, and that was why EA wouldn’t go on the platform.

I think I made the right decision, because if you look at today, Visual Concepts has the only real strong basketball game out there. EA doesn’t have one. I think I did the right thing.

GamesBeat: What do you think of the console war today, where it stands between Nintendo, Sony, and Microsoft?

Stolar: I believe Nintendo is having a very difficult time. Nintendo should have just become a software company. But I don’t think Nintendo in Japan will ever allow that. Sony needs to do more than they’re doing with the online part of their product. They don’t really have a standout product. If you look at Activision Blizzard, they have World of Warcraft. Sony doesn’t really have that. Microsoft’s biggest problem is they’re not selling any product in Japan.

GamesBeat: Now Microsoft’s going for China instead, I guess.

Stolar: Right. But then watch China come out and kill your hardware system.

GamesBeat: What do you think about consoles in the larger context of digital games, mobile and online games?

Stolar: Like in the music industry, games are going to become much more online. You’re competing with the mobile business now. But if the console guys come up with strong products for multiplayer online, the consoles will still succeed.

You have the set-top box people as well, though. Comcast is looking at building these boxes to deliver games as well. That’s going to be another step in the future. They’re going to start building games you can stream right through your console or your TV to your phone.

GamesBeat: Consoles have a role, then, but they’re not dead yet?

Stolar: They’re not going away, no. You’ll see them change as far as the way the delivery system works, but you won’t see them go away.

GamesBeat: When you give advice to game startups, what patterns do you see there?

Stolar: If I’m a startup and I’m doing a game, I’d better make sure it’s fun and easy to play, and it needs to run on all platforms now. You can’t make anyone spend a lot of time trying to figure out how to play the game, and you can’t just pick one platform anymore.

GamesBeat: You must know just about everyone in the industry by now. What gets you excited enough to get involved in someone’s company?

Stolar: It has to be the team and the passion of the team around how they want to work together.

GamesBeat: Are you optimistic, worldwide, about this golden age of gaming, the boom that’s going on right now?

Stolar: I’ve been doing this since 1980. I love this business. I love it because I get to work with people who are young and passionate. I’m one of the old gray-haired guys in the industry, but it’s wonderful to work with all this young talent?

GamesBeat: At the risk of being ageist, how old are you now?

Stolar: That’s a nice question. I’m 68 years old, turning 69 this year. I could be most of these guys’ grandfather almost.

GamesBeat: And you’ll work until when?

Stolar: Put it this way. I’ve spoken to two individuals about this, Sumner Redstone and Rupert Murdoch. They’re both in their 80s. They’re both multi-billionaires. They certainly don’t have to work, right? And they’ve both said to me, “If you retire, you die.” I believe that. My father, when he sold his liquor store and stopped working, passed away three months later. I’m not going to stop.