Cable programmer acquires video-game company

Viacom has purchased a leading video-game company, giving a boost to its fledgling effort into interactive media.

The giant cable programmer bought ICOM Simulations, a Wheeling (Ill.)-based game developer well-known for its CD-ROM game “Sherlock Holmes, Consulting Detective.” The connection was made through Viacom Intl. CEO Frank Biondi, who sits on ICOM’s board.

“We believe the whole interactivity trend of the entertainment business is real and it’s already here with Nintendo, Sega, Apple and Philips,” said Viacom Entertainment chairman Neil Braun. “We think our producers at MTV and Nickelodeon are the ones likely to understand the entertainment experience that these players can deliver.”

While this is the first time an entertainment company has purchased a video-gamemaker, earlier this year, Paramount Communications made an investment in Spectrum HoloByte, an Alameda-based software games company. And Viacom joins Walt Disney Co., Sony Corp. and Time Warner Inc., which all have software efforts. In addition, TW, which owns Atari Games, is a substantial investor in 3 DO Inc., developer of a multimedia player.

But, for a small price, Viacom has added a sizable and successful team of game developers. The move opens the way for MTV and Nickelodeon-labeled video-games in the near future.

“ICOM has some pretty good technology and are on all the major platforms,” said Kelly Flock, head of the new Trimark Picture’s New Media group. “It was a very strategic acquisition.”

ICOM, founded in 1985, has excelled at developing video-games for a variety of players, ranging from Nintendo, Sega to Macintosh and IBM computers, in a number of formats, including cartridges and CD-ROM. Industry sources project that 200,000 units of the “Sherlock Holmes” titles have been sold, largely by bundling it with computer hardware.

That raised some doubt about how smart Viacom’s investment really is. “When the dust settles a few years from now, this acquisition was a mistake,” said Lee Isgur, an analyst at San Francisco investment bankers, Volpe Welty & Co. “It’s a company that looks a lot better than it really is.”

But Viacom does pick up ICOM’s staff of 53, that will now be the R&D arm for Viacom New Media. ICOM president, Dennis Defensor, will stay on and will report to New Media vice president Michelle DeLorenzo.

Though the price was not disclosed, according to sources close to ICOM, the privately held company did an estimated $ 5.5 million in revenues in fiscal 1992 , ended May 31.

Reportedly, ICOM had been shopping around a prospectus for a private placement for between $ 6 million and $ 10 million.

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