A History Of Mastertronic

Sourcing the product

Because Mastertronic was a publisher not a software house its first big problem was to find the product. One important source was Mr. Chip, a software house run by Doug Braisby. (The business still exists and is now called Magnetic Fields). The games he sourced sold 395,000 copies in the first 15 months of Mastertronic’s life (to June 1985). But this achievement was eclipsed by another key source, the brothers David and Richard Darling, themselves destined to become major players in the industry. They had their own publishing company, Galactic Software. Having mastered the art of quickly developing games for the Vic and C64, the Darlings set up a partnership with Mastertronic which gave them both a royalty and a share of the profits on the sales of their games. Some of the Galactic back catalogue was republished alongside newly-written games. The partnership was astonishingly successful. In that hectic first 15 months nearly 750,000 games written by the Darlings were sold, netting them some £85,000. Professional programmers would have been glad of such sales. For two boys of school age this was evidence that games were likely to be better than education and as soon as they could the Darlings left school, terminated the deal with Mastertronic and set up a new company, Codemasters.

To put these two sources in perspective, about 2.1 million units were sold of all titles in that first 15 months. Thus the deals with Braisby and the Darlings secured 55% of the early Mastertronic sales. Later on, as Mastertronic became known. many people approached the company with finished games, or just ideas, keen for Mastertronic to publish their work.

The early Mastertronic games were produced for the computer formats that were dominant at the time. The Vic, C64 and Spectrum were the main machines. The marketing strategy required a flow of titles so that retailers had compelling reasons to keep the games prominent in their shops, and to attract and hold the interests of the consumers.

Between April and June 1984 Mastertronic launched 32 titles: 13 on the C64 , 7 on the Vic, 9 on the Spectrum, 2 on BBC and 1 on the Dragon. 7 titles were by the Darlings, 8 by Mr Chip and 4 by CME software. Almost all were derivative, based on popular arcade games. Hence there were Spectipede on BBC and Spectrum based on Centipede, Munch Mania on C64 based on Pacman etc. But a couple of titles stood out – the Darling’s BMX Racers on C64, and Vegas Jackpot on C64 and Vic by Mr Chip. BMX Racers was not based on an arcade game2 and it was the first of a number of extremely successful games aimed directly at young boys, unlike most of the arcade games that used abstract Space Wars concepts. 340,000 were sold. Vegas Jackpot sold nearly 300,000 units, including a rare version for the Dragon3.

Great care was paid to the appearance of the games and to the image of the publisher. Quality artwork was commissioned for the inlay covers. Some of these pictures, particularly those with science fiction themes, undoubtedly helped many an undistinguished game to sell. One agency – Words & Pictures, run by Gary Grant, supplied all the cover artwork at this time. They in turn relied heavily on two artists, Mark Brady who specialised in the science fiction look, and John “the brush” Smyth who favoured a more cartoon-like look. There was a Mastertronic logo and colour coding to help retailers identify the computer format. The three key suppliers – the tape copier, the arthouse and the printers – were all geared to fast responses. They understood that it was often crucial to get a certain number of titles out each month.

Pricing and profitability

In 1983-4 most computer games retailed in the UK at prices between £4.99 and £7.99. Retailers disliked cheaper games because they made less profit and the public were suspicious of the quality of “budget” games (quite rightly so in the majority of cases). Mastertronic games were priced at £1.99. How could they do it?

At that time all computer games in the UK and Europe were distributed on cassette tape, similar to that used for musical recordings. Computers using floppy disks were available, most notably the C64 and the models aimed at business, such as the Apple, Commodore Pet and Tandy ranges. But these were mainly sold in the US. In Europe the cheaper tape-based models had the overwhelming part of the games market. Games were short, reflecting the limited memory capacities of the computers. The largest was the C64, with its supposed 64,000 bytes of memory. In fact the amount available to run programs was about 38,000 bytes, the rest being used by the computer for internal operations. Computer code that filled this space fitted onto a short length of tape that could load in about 5 minutes. For a reasonable print run, a tape duplicator could produce copies for about 25 pence each. Inlay cards cost about 3 pence each. The artwork cost anything up to £1,000; assuming a print run of 20,000 this reduced to 5p per unit. Other distribution costs might add 5 pence in total.

The principal supply of duplicated tapes was an Essex-based firm called Peakmyth. It was originally a video duplicator and Herman knew its owner, Mike Dawson. Dawson’s own words tell the story, and provide further illustration of the casual but warm and personal way that Herman did business.

“One Saturday I had a call from Frank asking me if it was true I had a audio duplication plant specializing in computer games. Frank came round to the farm with Allen [Sharam] and after showing them the plant said they would like to have me do the duplication. Frank had known me for many years and knew I could produce a quality consistent product as I always insisted on… branded tape (BASF or TDK)

He also was one of the few non technical people to understood that you can’t produce millions of tapes on schedule with sub standard material and keep rejects low. After about 6 months they became 90% of my turnover so I sold 50% to Frank as I felt this was going to get very big and I was not interested in sales only running the plant. It shows you that that it pays not to be greedy and it tide them to me as they receive half the company’s profit. Over the years there were a few punch ups between my staff and Mastertronics regarding us not getting the masters on time and and the rejects etc.

I used to go round Frank’s house on a Saturday morning and it took about 10 mins to sort thing out and then we had some toast and coffee The amount of money both of us were making who’s interested in a few hundred pound one way or the other. I do feel that it was the relationship I had with Frank stopped any conflicts between both company’s over the years.”

The close relationship with Peakmyth, and with other duplicators later, meant that Mastertronic bought its tapes at 22 pence.

So a game could be duplicated and put out to market for a total cost of some 35 pence. The other main cost was the software itself. Games could be purchased outright but most authors wanted royalties, not wishing to lose out in case of success. The standard deal that was offered in 1984 was an advance of £2,000 and a royalty rate of 10 pence a unit. Many young authors were very happy to take this, especially when Mastertronic went on to sell 50,000 copies or more. In later years royalty deals moved closer to the standards in book publishing with royalties based on a percentage of receipts but in 1984 this would have made no difference – all games were sold at the same price anyway.

Having set the costs, the profit depended on the wholesale price. Here the calculations work backwards. From a retail price of £1.99, VAT (15% at the time) took 26p. Retailers expected to make a margin of 30%. They would therefore not buy at prices higher than about £1.30. Between this price and the production cost of 45 pence was a margin wide enough to cover advertising, overheads, the profits of distributors and (provided there were not too many), the costs of failed titles. In practice Mastertronic sold to distributors at about 90 pence a unit, reduced to around 80 pence in the more competitive late 1980s, and at about £1.30 when able to distribute directly to retailers.

This pricing structure would generate good profits provided sales were high enough. If the total sales of a title were just 10,000 units then raw material and distribution cost might be £3,000, artwork and advance to author a further £2,500 and the receipts about £9,000. So this would bring a reasonable gross margin of 38%. But in the early days we easily exceeded 10,000 units per title The 10 C64 titles released at the start of Mastertronic’s life sold on average 40,000 in the first year and over 50,000 before being withdrawn from sale. The Vic titles achieved 44,000. Surprisingly the early Spectrum releases did less well but still averaged 28,000.

Budget pricing was proved to be perfectly viable provided that most titles achieved good sales, and in the fast growing market of 1984–6, at the “pocket-money” price point of £1.99, they did.

continues…

Please follow and like us:

1 Comment

  1. Neil from the RetroManCave/Retro Collective on Youtube now owns the Mastertronic trademark and is planning to release a load of budget games using it. Its mentioned on their latest update video.

1 Trackback / Pingback

  1. Mastertronic Collectors Archive Weekly Digest - 4th February 2025 - Mastertronic Collectors Archive

Leave a Reply

Your email address will not be published.


*