Interview: Sega of America Visionary Bernie Stolar
Bernie Stolar is one of those people in the gaming industry who has been able to bring more than one of the most important platforms ever made to life. He’s a man who not only has a vision, but is unapologetic in his process of bringing those visions to life. Richard Booth of Pixel Bits had the opportunity to speak to Bernie in a phone interview in which he spoke about many topics including Playstation, Sega Dreamcast and Atari.
My first question is, can you introduce yourself a little bit for those that may not know who you are or know your influence in the video game world?
My name is Bernie Stolar. I’ve been in the video game industry for over 30 years. When I first got out of graduate school, I was in the magazine/newspaper business and then in 1980 started my first game company.
What was the name of that company?
Pacific Novelty Manufacturing. I started that company with a partner by the name of Brian Semler
What games did you create?
The first game we created was Shark Attack. The next game was Thief which was basically a puzzle game similar to Pac Man and then NATO Defense. We also made a computer portrait machine. We sold that company to Atari. I thought I was a genius; we sold it to Atari, when it was owned by Time Warner. We sold it for stock, and then Atari a year later went bankrupt, so I was out of a job and out of a company.
I started a company called Amitron which then brought in circuit boards from Japan to go into other coin op games that weren’t making money. One of the first games I brought in was a game called Mr. Do!, which I licensed to a Japanese company called Universal Games. I then later sold that company to Atari to the Tramiel Family and went to work for them as president of Atari Consumer.
What did you do there?
I was involved with the development of product and the development of Lynx, which at that time I believe was the best hand held system in the market place. I think it was much better than what Nintendo had at the time even.
I’d have to agree. What was the development like there as far as the console goes?
It was very, very difficult, because we were financially strapped, and Jack Tramiel was not funding a lot of product. He was more of a hardware person than he was a software person.
That doesn’t help sales, when they’re not worried that much about …
No, that was the case, and then when Jaguar was being introduced, it was the same time that 3DO was coming out. I was contacted by Sony regarding PlayStation and thought that would be a better place for me to be, so I left Atari for PlayStation.
You were recruited out of Atari, then.
That’s correct. Steve Race was the President of Sony PlayStation at the time reporting to Ólaf Jóhann Ólafsson, and Steve is the one who hired me.
As far as the PlayStation goes, at what point did you jump in? Was the hardware already finalized or was there …
The hardware was pretty much already finalized. It was 1994. It was right around the same time the Consumer Electronics Show was taking place in Chicago at that time in the winter. Sony was involved with negotiating with Nintendo about a joint venture, but Nintendo pissed of … I’m trying to remember his name now … pissed of Ken Kutaragi in such a way that Ken walked away from the deal. It was Ken’s idea to do PlayStation, and Mr. Morita, who was then the chairman of Sony, he was the one who actually named PlayStation as a system. That came from Mr. Morita.
Wow. What was the atmosphere like? Was there kind of like a revenge mindset?
Not at all. It was a very fun environment that was being developed, and it was and environment where it was, “We’re going to win. We’re going to have the best of the hardware, and we should also make sure that we have the best software.”
Amazing. Speaking of software, you had mentioned in a previous interview that they kind of had a hard time rounding up third parties, then suddenly there was this huge influx. Can you tell me about that?
I helped build the third party organization, actually, and started that and brought in a team of people to go out and talk to the third party publishers, which we did. We worked out a situation with the publishers telling them how we were going to go to market and how we were going to hand our inventory control and make it work for them. It actually wasn’t that difficult.
So people kind of jumped on almost immediately?
Yes, because of the power of Sony.
Fantastic. Did you have the opportunity to work along side Ken Kutaragi at all?
Yes I did. To me he was a very special person to work with. I loved him dearly. He was just an incredible technology individual, and he had great foresight.
Did he have other ideas at the time besides the PlayStation, other things he was working on?
He did, but he basically didn’t venture into those, until he felt the PlayStation was really going to be the winning system.
When did you decide to leave Sony and move over to Sega?
That was 1996 toward the end of the year. What happened was my boss, Steve Race got fired. Micki Shohoff, who ran Sony North America got fired. Ólaf, who worked for him, Steve actually reported to Ólaf, he was fired. Then next thing I know, people are asking Mr. Miriama, who was the chairman of Sony Music and was also on the board of PlayStation came to the United States and started taking a head count and interviewing all the executives, including myself. I got the feeling that somebody else was going to be coming in to run the company. They brought in a gentleman by the name of Kaz Hirai, who came out of Sony Music but was Miriama’s protégé. As you know, Kaz Hirai today is CEO of all of Sony. It was my feeling that I was going to be replaced as well.
Hayao Nakayama came to me, who was one of the founders of Sega, and asked me to join as President and COO of the company. I said I would do that only if I would be able to get rid of Saturn and help build a new system that I would have control over. He agreed to that, and with that I left. As soon as I did that Jim Whims, who was the Executive Vice President in charge of sales, he got fired. Everybody who was on the team that launched PlayStation was fired.
Do you have any idea why that was?
Yeah, because the teams from Japan wanted full control and didn’t want any of the US executives that started and built the company to be there.
Seems kind of anti productive, doesn’t it?
You know, Sony’s a Japanese company, and they did a number of different businesses in the United States, so it wasn’t like they didn’t know distribution in the US. They knew retail distribution. They knew how to manage businesses, because they already had Sony TV. They had a number of other different Sony products, so they didn’t feel that was a problem. The software was coming in pretty quickly and pretty easily, because that was all established already, and they figured they could just maintain it, so they did.
At that point you had moved over to Sega. Early on was it kind of easy going?
No, it was very difficult. Sega had lost close to a billion dollars the year before. That was due to the difficulties of all the products they came out with. Don’t forget, they had Sega … They had about five different platforms of Sega at the time. They had Sega 32x, Sega handheld, there was just too many products out there.
I felt that the staff we had at PlayStation was less than half the staff at Sega. I took the company from 300 and some odd people down to around 90 people and felt that I needed a new head of marketing, a new head of sales to help rebuild the company, so I did that. I brought in Peter Moore, who came from Reebok tennis shoes. Peter was in charge of Reebok’s soccer shoes, but he really understood branding. I felt he’d be a great head of marketing. Chris Gilbert, who I brought in from Cerwin Vega Speakers knew retail, and I felt he could really handle the retail sales part of it really well.
As you know, Peter Moore today is the CCO (Chief Competitive Officer) and head of eSports at Electronic Arts. I guess I picked the right guy there. Chris is senior VP and head of sales and marketing for NAMCO BANDAI today still. I believe we had a great team to launch the next hardware system, because to me it’s just not about the product. It’s also about the team that you have to work the product. If you don’t have the right team, you’re not going to get the product out.
When you build teams, do you feel that you have to recruit from the outside, or do you feel if there were a random group of people sitting in a room, that you could walk into the room and make them a team?
I went out of my way to find these people, because everybody that was at Sega at the time I didn’t think was capable of really stepping up and becoming a winner. I believe that you have to work with a team of people that believe they’re winners. It’s no different than if you’re building a basketball team or a baseball team. You want the best and the brightest, and that’s what we had. At the same time, I had a number of people that then left Sony to come work for me at Sega. Shuji Utsumi was in charge of business development, and Steve Ackeroyd. Both were in business development, came to work for me from Sony. Gretchen Eichenger, who ran third party at Sony came to work for me to run third party at Sega, so all those people also felt uncomfortable at Sony and came to work for me.
You had mentioned telling me the story about the Dreamcast and what had happened. Feel free to go ahead.
I believed that the next generation of product was not going to be DVD, but was going to be massive multi player online gaming. I was a big believer in that. I believed that with the internet and networking and the cloud coming, that you needed to be able to play online. That’s why we built Dreamcast as the first online, multi player gaming system in the gaming area.
How did development start? What were the planning stages like?
We had a time frame down, so we went out and looked for the best product we could get, and I think that we did that. I think that Shenmue was one of the best titles that came out on Dreamcast at the time. We were also talking at that time to everybody that was doing massive online game play. World of Warcraft was coming out, we were talking to them, so we felt we were in the forefront of all the new generations of product coming out.
That’s so great. Shenmue was one of my favorite games of all time. There was a couple of different things regarding the Saturn. One of those was a rumor that you had banned RPGs from the Saturn is there any truth to that?
No, that’s not true. I think that was a rumor that was spread by a third party developer that I didn’t think had good product. His product wasn’t approved for the system; it just wasn’t fun, and it just wasn’t good. I think that third party publisher made a statement saying that I didn’t approve it, because I didn’t believe in RPG, but that’s not true.
Do you by any chance want to share what the name of that publisher was?
I wish I could remember his name, but I don’t.
You also had created the five star game policy while at Sega. Can you explain to the readers what that is?
To be honest, I don’t recall what that was. I think that policy, if that was a policy that was created, basically meant that it needed to meet all the criteria of what a good product would be. That meant good game play, good graphics, good sound and whatever else that we had geared toward it.
Did you have any sort of checklist or anything like that, or was it just kind of if you felt it was going to be great, it was going to make it?
If you look at the game, you were able to tell whether it was going to make it or not. We didn’t actually have a checklist, no.
You had left Sega due to a disagreement between the Japanese partners. Can you tell me about that?
What happened was Mr. Nakayama, who was the man who brought me in, he got pushed out of the company by a gentleman Mr. Okawa, who was the largest shareholder. He ran the bank that owned the majority stock of Sega. When Nakayama got pushed out, he came to me when we were launching the project and wanted to change the launch date for Dreamcast. I didn’t agree with that, so I left the company
That’s funny. Had the relationship with him always been like that?
Let’s just say, he’s since passed away, so I don’t have a relationship with him.
Back to the Nintendo thing really quick; between Nintendo and Sony, were you at CES that year when that whole thing happened?
I was at CES, but I was not involved in the meetings, no. I just remember seeing Ken really pissed off.
I can imagine what his face looks like.
He was pissed off; at the same time, he was pretty happy. He wanted to do this on his own. The reason that they were talking to Nintendo was the corporate executives above him was pushing him for that. He really didn’t want it, so at the same time he was pretty happy that he got to do this on his own. What happened was Sony PlayStation was set up almost like a separate subsidiary that had its own board of directors and reported to a completely different unit at Sony corporate as opposed to the rest of the divisions.
Back to Sega, they didn’t have a booth at E3 this year, and they’re going through a lot of turmoil. Do you think there’s any long term success at Sega?
I think Sega will be around. The name is too strong, too valuable. Look, Sonic is still a major product. It’s now been licensed out to different formats and so on, but Sonic is still a major character. It’s not going away. It’s no different than Mario.
When I was at PlayStation, we didn’t have a platform game like Mario or Sonic, and we needed to get one. I went out and found Crash Bandicoot and licensed that and brought that game into PlayStation which took off immediately. It was one of the best products ever on PlayStation, and that was the Naughty Dog guys. Since then, look at all the products they’ve done.
That’s true. I just finished Uncharted 4, actually. Great game.
That tells you.
Absolutely. What was it like working with Naughty Dog? Were they tough to bring on board, or did they just kind of jump in?
No, they jumped right in. Jason, Ruben and those guys were just fabulous. I thought they were just a great group of guys.
Do you have any insight stories you can share from anything at Sega or Sony?
Other than it was a great time, and it was a lot of fun. I wish I could relive all those times.
Speaking of all that, what made you want to be a business man?
I graduated an undergrad with an Economics Degree from UCLA and got an MBA from UCLA. I had no idea what I wanted to do when I got out of school so I started my own magazine called Coast Magazine, which I later sold to New York Magazine Corp and moved to New York to sell advertising space. I just didn’t know what to do. When the game industry started and Larry Siegel, who was a fraternity brother of mine, was working at Stern Electronics in Chicago building video games and pinball machines. He said to me, “Look, why don’t you move to LA and start a company with my brother. You guys can get into this business,” so that’s what I did. I took his advice. That’s what drove that.
Larry later went on to work after Stern later on went to work at Atari for the Tramiels. He was the one who introduced me to the Tramiel family, so that’s how that took place. It was based on that relationship.
If you were to jump, do you think there’s a way … Do you have financially like a game plan, if you were to jump back in the saddle at Sega? Would you ever consider bringing up a new hardware system?
No. The world is different today. Everything is really online. What I would want to do is sit down with like a Comcast and work out a partnership for distribution on their set top boxes.
Wow, Okay. You seem to be the forever business man. Is there anything you’re working on behind the scenes now that might relate to that?
I’m just looking at different technologies that will help make product more fun. I’ll give you an example. You every hear of the IBM Watson technology?
Ever hear of Siri, that voice technology? What if you had that technology, and you were playing a game like Madden Football, and you said during the game, “Quarterback, throw a pass,” and the quarterback threw a pass. How would you think about that?
That would be awesome.
I believe that’s something to look at.
You’re playing Take 2’s NBA2K, and Durant’s dribbling the ball, and you say, “Durant, shoot.” Durant shoots.
That would be amazing.
Technology is every changing, and I think it makes things a little bit more interesting.
You were at Mattel Interactive after Sega, is that correct?
Yeah, unfortunately that was a short term thing. What happened was Jill Barad bought The Learning Company with the board’s approval. What happened was when I joined the company, Jill got pushed out, and the board of directors came to me and said, “Bernie, how fast can you turn this business around?”
I said, “We have a serious problem here, gentlemen. EA has 700 employees. I have 3,000 employees, so that means I have to get rid of over 2,000, and I don’t know who has contracts, and we have 20 offices, and I only need 2. I have all these offices I need to close.” I said, “This is going to take me anywhere from two to three years to turn around. What’s worse is we’re losing a million dollars a day. They didn’t realize that.
They said, “How do you know we’re losing a million dollars a day?”
I said, “I did a forensic audit. I don’t know what you people were thinking when you bought this company, but you approved it. You shouldn’t have fired Jill; all you guys should have been fired. You’re the board of directors.”
They said to me, “Bernie, what do you suggest we do?”
I said, “Let’s just take the company and shut it down and call it a discontinued asset. That’s the only way we’re going to get out of this.”
They said, “Guess what? You go out and see if that’s possible. If we can do that, that’s what we’ll do.”
They said, “Just do what you have to do.”
I went out and called the company a discontinued asset and got rid of it. I licensed out product to THQ. I licensed out product to Vivendi, and we just moved forward. The only game I really developed at Mattel is Barbie Horseback Riding which is the first time that ever took place. The Barbie Horseback Riding sold over a million units on PlayStation. That shows you the strength of the brand.
Yeah, absolutely. Looking back, are you happy you left Sony for Sega, or do you think you would have rather stayed at Sony?
I would have rather stayed at Sony, but that wasn’t my decision really, I don’t think.
Got you, okay. Based on what was going on at Sony?
Do you have any words of advice for people who would want to jump into business in the game industry?
Yeah, have broad ideas, stick to your guns and work with good people.
GamesRelated would like to thank Bernie for taking time out of his schedule to speak to us and we are looking forward to his next project.