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At LucasArts, No Playing Around in Quest to Be No. 1
SAN FRANCISCO — In September 2004, Jim Ward met with the director George Lucas at his office at Skywalker Ranch near here. At the time, LucasArts, the video game company created by Mr. Lucas in 1982 and run by Mr. Ward, was in disarray. The division was making too many mediocre "Star Wars" games, it was rife with internal rivalries and it was in such lackluster financial shape that bonuses for employees were scrapped that year.
Mr. Ward, a veteran Lucasfilm marketing executive who had been named president of LucasArts only four months earlier, was there to present Mr. Lucas with a business plan, but he had a few questions of his own. Most important, did Mr. Lucas have the desire to turn LucasArts into one of the top five video game publishers? Indeed, Mr. Lucas said, he did.
"We can do this ourselves," Mr. Ward recalled Mr. Lucas telling him. "We will put our resources behind this."
LucasArts is not No. 5 yet. But last year it ranked No. 8 in sales, up from No. 13 a year earlier, according to the NPD Group. And, Mr. Ward, 46, is being credited with a turnaround. While No. 8 may seem low in an industry obsessed with No. 1, LucasArts got there selling a fraction of the games its competitors did.
The success was buoyed by two new "Star Wars" games, Star Wars Battlefront II and Star Wars: Episode III — Revenge of the Sith, which were the second- and third-top-selling games last year, after Madden N.F.L. 2006, according to NPD. And LucasArts had a hit with Mercenaries, a war game published by LucasArts and developed by Pandemic Studios that became the best seller based on a new property. And there are more non-"Star Wars" games on the way, including one based on the Indiana Jones character.
Analysts and others in the industry agree it is a promising turn for LucasArts and, in particular, Mr. Ward. But his most challenging days may be ahead. The video game industry has been in the doldrums for months; video game sales are lagging as consumers wait to buy the next generation of consoles, including the PlayStation 3.
And perhaps most important, Mr. Lucas has no plans to make any more "Star Wars" movies. That means LucasArts will have to work that much harder to come up with ideas of its own. "We are not the 'Star Wars' game company," said Micheline Chau, president of Lucasfilm. "And Jim knows what he has to do."
While the games division makes up about 25 percent of overall revenue for Lucasfilm, Ms. Chau said, it accounts for only 10 percent of the company's operating profit. This is why one of Mr. Ward's main goals is to create original franchises.
"The 'Star Wars' brand is a massive advantage, but they are going to have to market new innovation," said John Riccitiello, a partner at the video game investor Elevation Partners, who has known Mr. Ward for several years. "It's early. It may take another five years for their story to develop, but it is going to be interesting."
Sitting in his office overlooking the San Francisco Bay one recent morning, Mr. Ward reflected on what he and his team had done so far. It was at a town hall meeting in August 2004, the month before he met with Mr. Lucas, that he outlined his strategy in an auditorium filled with staff members. It seemed simple: LucasArts would make high-quality games, and deliver them on time and on budget.
"I learned this from George," said Mr. Ward. "There are these countless meetings where he is rational, laid back. But then he sets the bar so high you begin to think, like, this guy is out of his mind."
To illustrate the point, Mr. Ward raised his right arm in the air, higher than the left. "I said, 'Gang, this is what we are doing,' " said Mr. Ward, slowly raising his left arm to meet the right. "Now they've learned that if they come remotely close to this, they can do amazing things."
Before joining Lucasfilm in 1997, Mr. Ward had distinguished himself for 13 years as an aggressive advertising executive working with the likes of Apple Computer, Nike and Microsoft. While working at the advertising firm of Wieden & Kennedy, he was involved in the introduction of Windows 95 for Microsoft. He and his colleagues recommended that Microsoft use the Rolling Stone's hit "Start Me Up" in its now famous campaign.
Later, he was Wieden's global account director for Nike and part of the team that introduced Tiger Woods as a brand. Mr. Ward was recruited to Lucasfilm in 1997 to oversee the worldwide marketing of the last three movies in the "Star Wars" series, as well as all of Lucasfilm's DVD library. But by November 2003, Mr. Ward wanted more responsibility. Mr. Lucas and Ms. Chau agreed to let Mr. Ward "try out" at LucasArts even though he had no experience making video games.
"When he talked to us we were thinking maybe, maybe not," said Ms. Chau. "But if he surrounded himself with people who knew the business, and he listened, this could be great." Mr. Ward was named president at LucasArts in May 2004.
Robbie Bach, president of the entertainment and devices division at Microsoft, who has known Mr. Ward since the start of Windows 95, said Mr. Ward sought advice from others on how best to revive LucasArts. "He did listen to a lot of people, but once he made a decision, he didn't waste time getting it done," said Mr. Bach.
Along the way, he also developed a reputation for directness that could be a little rough. Mr. Riccitiello said that Mr. Ward "can run certain people over" with his big voice and strong point of view.
"My sense is if you took the average executive with a 50- to 80-hour workweek, they spend about 50 percent of their time just being nice," said Mr. Riccitiello. "Jim doesn't deal with that. He picks up half a week right there."
In 2004, about one-quarter of nearly 400 employees at LucasArts lost their jobs, said several former employees. (Mr. Ward declined to discuss the layoffs. Currently there are 252 employees in the division.)
He quickly sought to shake up the culture. "I needed to free them up and get rid of the politics so I could institute a team," said Mr. Ward. "I told them they either get on board or they don't."
He began weekly meetings to encourage department heads to talk. He said he separated the quality-control department from product development to create "healthy tension," giving staff members more freedom to express their views.
Mr. Ward took a different approach to video game advertising. For example, he participated last November in "The Apprentice" to promote not only the DVD release of "Star Wars: Episode III — Revenge of the Sith" but the Star Wars Battlefront II game as well.
And he is openly critical of Electronic Arts, a competitor, for not being able to deliver its Godfather video game to consumers on time. "It is absolutely a sin," he proclaimed.
(Jeff Brown, a spokesman for Electronic Arts, said, "Delaying the Godfather wasn't an easy decision, but getting it right was crucial to the future of the franchise.")
Still, Mr. Ward is willing to change his opinion if an opportunity presents itself. In 1981, when he was a graduate student in Arizona, he said he spurned a classmate, Dawne Cotton, because she was late for their first French class. Three years later, he married her.
Mr. Ward said he had successfully worked with creative people his entire career, and former LucasArts employees said he sought to inspire. But even Mr. Ward conceded that LucasArts developers were suspicious at first. "You've never run a video game company before," he said many of them told him. As a result he knew he needed someone to help who knew how to make games. So he promoted Peter Hirschmann, 34, to be vice president of product development. "The linchpin was to find a creative partner," Mr. Ward said.
A former production assistant who worked with Steven Spielberg, Mr. Hirschmann was involved in developing that director's widely acclaimed Medal of Honor video games before joining LucasArts in 2002 as a producer. Mr. Ward got to know Mr. Hirschmann in early 2004, when he would pad down the hall to his office late at night to check on the progress of Star Wars: Battlefront, which Mr. Hirschmann was overseeing.
Both men said late-night conversations about "Star Wars" turned to personal interests: World War II and Disneyland. Born in 1959, the youngest of three siblings, and brought up in Rockford, Ill., Mr. Ward said he used to watch "The Wonderful World of Disney" every Sunday night. (The Pirates of the Caribbean is his favorite ride at Disneyland.) Mr. Hirschmann keeps a model of the monorail from Disneyland in his office.
While Mr. Ward can be forceful, Mr. Hirschmann is more relaxed. He once hired an ice cream truck to deliver gelato to the staff. "Peter is a perfect counter to me," said Mr. Ward.
At first Mr. Hirschmann was not interested in the job. "I saw a lot of baggage with it," said Mr. Hirschmann. "But Jim said, 'We are going to hit the reset button. We are going to reboot.' Then I thought, maybe this was doable."
Their excitement was palpable on a recent afternoon, when Mr. Ward, Mr. Hirschmann and Haden Blackman, the project leader of a forthcoming "Star Wars" game, reviewed all of the company's recent projects. Mr. Blackman outlined a new storyline that delved deeper into Darth Vader's history.
Mr. Hirschmann later demonstrated a test game, shouting and jumping each time a storm trooper tumbled onscreen, the character barely catching his fingers on the pixel ledge. And he gleefully explained how researchers had tracked down images of San Francisco buildings from 1915 for the future Indiana Jones game.
Soon it was back to work.
"There's a lot of pressure," said Mr. Ward. "I mean we're taking $20 million out of George's pocket," he said, tapping Mr. Hirschmann on the shoulder while referring to the potential cost of a video game for the next generation of consoles.
Mr. Hirschmann and Mr. Blackman shot each other a knowing glance. "We feel the pressure, all right," Mr. Hirschmann said, laughing.
"Leaves from the vine, falling so slow.
Like fragile, tiny shells,
Drifting in the foam.
Little soldier boy, come marching home.
Brave soldier boy, comes marching home."
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