Below is an article taken from The Metro Pulse Online regarding the history of the company Cyberflix.
A lawsuit by former employees brings to light the last days of CyberFlix, the company of “garage band programmers” that was supposed to rule the video game world.
by Jack Neely
You could make a computer game about CyberFlix.
You approach the door at 4 Market Square, click on the wooden door, which opens to a narrow flight of stairs. You climb to the second floor, bluff your way past Blue, the receptionist, and begin gathering information from each of the widely various characters you see. You pet the dog, greet the Newsweek reporter, exchange blows with the guy in the mohawk.
Then, if you’ve done everything just right, you’ll climb the narrow staircase, past the World War II poster that says Shh—Silence Is Security to the third floor, the dark, quiet lair where the Genius resides. The object of the game is to guess what he’s thinking.
CyberFlix was never one of Knoxville’s biggest businesses, but for three or four years, it was probably our most famous. Newsweek profiled these “garage-band programmers.” Computer author J.C. Herz devoted a whole chapter to them in her 1997 book about the global computer-gaming industry, Joystick Nation. Experimental composer Laurie Anderson and former Sen. Howard Baker visited their offices. They earned flattering writeups in People (an article titled “Hollywood in Knoxville”), U.S. News & World Report, Variety and dozens of computer trade journals. And that was even before their biggest title, Titanic: Adventure Out of Time, became a nationwide bestseller.
They made waves across the international computer-game world, and seemed to herald a high tide in their downtown neighborhood. CyberFlix inspired politicians to follow its lead, with catch-phrases of “technology hubs” and “digital crossroads.” CyberFlix’s pale young geniuses found themselves working as consultants to a city that tried hard to catch on, sometimes even seemed eager to convert downtown into a Greater CyberFlix. It’s more businesses like this, many thought, that downtown Knoxville needs. At an ad-hoc meeting on the Square in 1997, City Council passed resolutions aimed at fitting out ancient Market Square with cyber-connections certain to spawn more CyberFlixes.
Just last year, Titanic was among the nation’s best-selling computer games, and People and Southern Living ran profiles of this amazing young company. On Sunday talk shows, Mayor Ashe was boasting of CyberFlix as strong evidence of the rebirth of Market Square.
Anyone who spent any time on Market Square a year or two ago would recognize most of them. Rand Cabus, with glasses and a dark Van dyke, walking briskly to his Locust Street condo. Alex Tschetter, muscular, tattooed with a flat-top mohawk, smoking cigarettes. Slow-talking, blond-goateed Billy Davenport, usually in a trucker’s cap, loping to his pickup. Polite, bespectacled Erik Quist, getting a bagel. Bill Appleton, short-haired, square-jawed, and basketball tall, walking his big weimeraner around the square.
Their impressive offices were unlike any others in East Tennessee: two levels of an old building, polished hardwood floors, bare-brick walls. In the well-lit lobby, clocks showed what time it was in cities around the world: Tokyo, Los Angeles, Knoxville. Beyond the lobby, the place was always comfortably dark, lit mainly by afternoon sunlight and dozens of flickering computer screens. With baskets of free candy, big-screen video games, ping pong, and billiards, it was the sort of office that little brothers loved to visit.
That was just a year ago—which, in cyber time, can seem like several decades.
Today, the upper floors at 4 Market Square are empty and silent, and there’s no digital crossroads here. What happened to CyberFlix is unclear, and the subject of a lawsuit filed earlier this month by two of the company’s founders.
CyberFlix started not quite seven years ago when an unlikely quartet of young turks got together in a basement on Wagon Lane, a forested neighborhood near the river in South Knoxville, and played computer games. “It looked like NORAD down there,” musical director Scott Scheinbaum recalls, a dark basement with 10 computer screens flickering. Often working all night, they’d send out for pizza. He recalls the delivery man’s consternation at seeing the place. “What do you guys dohere?” he asked.
The basement belonged to Bill Appleton, a 31-year-old refugee from Silicon Valley whom some called a genius. Originally from Oak Ridge and son of ORNL honcho William Appleton, Bill was a 1979 graduate of Oak Ridge High before he studied philosophy, painting, and economics at Davidson. Studying grad-school economics at Vanderbilt, he discovered computers. Macintosh computers, to be specific, which became an article of faith. Self-trained, he became fascinated with cyber technology, especially as it had to do with designing computer games. He’d done a couple himself: one called Apache Strike, another called Creepy Castle.
He had sojourned in Silicon Valley and later Chicago, where he made a name for himself developing video games and a software process to create them. But he always returned to Knoxville, which he considered his home. He’d apparently run into business problems in both Chicago and California and admitted he was glad to be back in Knoxville, away from all that.
With him were three other guys you wouldn’t expect to find sharing a late-night pizza.
Shaven-headed Scott Scheinbaum, 32, grew up in Chicago, but family ties brought him to Knoxville, where he graduated from UT in music composition. He worked at Turtle’s Records on Cumberland, but he was best-known downtown as a nightclub rocker: a former keyboardist and vocalist for punkish bands like Proud Flesh and Ministry of Love. He was living in the Maplehurst neighborhood in the mid-’80s when a friend introduced him to a neighbor named Bill Appleton.
The tall, quiet one was artist Jamie Wicks. Only 25, he’d been trained in computer modeling; he’d known the older Appleton since his childhood in Oak Ridge. “He’s the quiet guy who sits next to you in class and draws pictures of monsters,” recalls a friend.
The guy in tortoise-shell glasses was Andrew Nelson. Originally from upstate New York, 34-year-old Nelson had moved here to work for Whittle Communications, where he became associate editor for a waiting-room celebrity magazine. Disenchanted with Whittle and smitten with the new CD-ROM technology, Nelson left Whittle in 1992, showing an early talent for escaping a doomed venture at the right moment. Scheinbaum had introduced him to Appleton.
“Bill inoculated us with his vision of becoming multimedia superstars and taking over the world,” says Scheinbaum. Movies were old fashioned; video games were for kids. Appleton’s interactive movies would be the new medium for all people.
His claims sounded grandiose. In 1994, he told a reporter, “By 2000, we’ll be one of the biggest entertainment companies in the world.”
Appleton started his campaign by releasing Lunicus in April, 1993, a futuristic tale about a lunar colony operated by the U.N. Though it was a shoot-’em-up as most video games were, Lunicus featured a first-person perspective, and stood apart with its attention to character personalities.
In May, 1993, the four—plus Eric Quist, attorney and childhood friend of Appleton’s, who would become CyberFlix’s business manager—incorporated. Bill had called the new business CyberSoft. Cyber, of course, is the ’90s prefix suggestive of artificial intelligence. TheSoft suffix may have sounded a little too derivative. Loath to dismiss their sophisticated creations “computer games,” they preferred the term “interactive movies.” Nelson suggested a suffix that sounded cinematic:Flicks. CyberFlix.
Nelson would write the scripts for these flix. Scheinbaum would handle the sound effects and music. Wicks would do the graphic design. Quist would handle the business. Appleton would make it all possible with the technology he’d developed.
In 1993, the multimedia disks known as CD-ROM were just a rumor to most Americans, and the rumor was that it was too slow to be much fun. The system Appleton called DreamFactory made significant changes to speed it up. This “authoring tool” was a complex network of computer functions which would be the main partner in what would become possible over the next five years.
In Appleton’s basement, Nelson, Scheinbaum, Wicks, and Appleton commenced work on a new title, a post-apocalyptic shoot-’em-up called Jump Raven.
The took their product to a Macintosh trade show in Boston. They weren’t granted even a real booth—but crowded around a corner, near the real exhibits, they stole the show. “How do you do that?” asked veteran engineers. Representatives from Paramount saw the exhibition and signed a multi-million-dollar deal for it.
Heartened, CyberFlix hired a couple more employees, including Robb Dean and Rand Cabus, and found a real office. In October, 1993, they moved into a spacious loft on the third floor of a handsome early-2Oth-century brick building at 4 Market Square.
They brought their sense of fun with them. One of their first hires was 3-D modeler Jay Nevins, then only 23. The third floor of 4 Market Square was “kinda like a treehouse,” he recalls. “Everybody was buddy-buddy. We’d work until one or two, then every night we’d go down to Manhattan’s. The next day we’d roll in at 10 or 11 or noon and do it all again.”
“The general rule was ‘Show up by noon, or call,’” remembers Michael Kennedy, a graphic artist who was another early employee. The policy changed little for the next five years. “When my family visited, I was embarrassed to tell them they pay me to play video games and eat Tootsie Rolls,” says producer Bob Clouse, a later arrival. “I would take six hours to tell my grandparents what I did for a living. And then they’d say, ‘Why don’t you just get a job?’”
For downtown and for Knoxville’s reputation as headquarters for a young business with a dynamic national reputation, CyberFlix seemed to promise everything Whittle Communications did a decade before. The first of several CyberFlix open houses, in the fall of 1993, coincided with one of the biggest layoffs at Whittle. Freshly unemployed Whittlites roamed the floor, transfixed by the flickering images on 20 computer screens. To some, Whittle’s mantel of downtown savior and national innovator was being passed to an even younger, more dynamic company.
That was the first of their annual Nightmare Before Christmas parties. With live bands, free beer, and an open door, the first one reportedly drew over 1,000 people to the third floor of 4 Market Square. The fire marshal was not among them.
Scheinbaum remembers the final push to finish Jump Raven. “Me, Jamie, Robb (Dean), Bill stayed up all night, saying ‘We’ve got to get this one out!’” Scheinbaum recalls. “All we did was play Jump Ravenover and over, saying, ‘This happens too much’ and ‘This doesn’t happen enough.’” Finally, at 9 a.m., we burned a copy [i.e., inscribed the game on a CD] and sent it off to Paramount.”
“There was a big problem,” says Martha Hume, a former Whittle editor who helped CyberFlix in its early days. “Erik didn’t know anything about business. At all.” She says the Jump Raven contract had flaws which caused problems in distributing the PC version of the game. “I didn’t get the impression they were crooked,” she says. “I did get the impression they were inept.” She says she tried to convince Appleton of the necessity of a business plan, suggesting a board of directors. “He absolutely would not listen. He would sit and seem to listen, and then he was off on something else. It was exasperating.” She gave up.
Their cavalier, anti-corporate approach seemed to work, at first. Jump Raven soon won the Grand¼ Prix at the Apple-Japan International CD-ROM competition; it later sold nearly 100,000 copies. “Everybody lovedJump Raven,” remembers Clouse. “It was the fastest thing on the Mac. And that was back when Mac was going to take over everything.”
With help from Nelson, CyberFlix’s indefatigable press-savvy promoter, the CyberFlix phenomenon caught the attention of Newsweek, which sent reporters down to Market Square in the summer of ’94 to write a profile of these “Garage-Band Programmers.” The article ran across two magazine pages, with a big photo of Appleton overlaid with a character from Lunicus. The article called Appleton “something of a legend” in Silicon Valley who’d come home. “Not only is the rent reasonable in a place like Knoxville, allowing CyberFlix to move into a 12,000-square-foot loft,” wroteNewsweek, “but the low-key atmosphere spurs creativity.” The article closed, “No matter what happens next, one move is not on the schedule: California may beckon, but they’re staying put in their old Tennessee home.”
Appleton was a Knoxville booster in the national press, though he didn’t divulge details of what happened to him in California. “He got burned, big time,” a friend recalls. “Maybe that’s why he got to be so sneaky.”
Rand Cabus, who ran Universal Printing, had worked as editor of a small, local magazine called Township Jive. He’d been part of the pre-history of CyberFlix back in mid-’80s Maplehurst. His interest in graphics brought him to CyberFlix, where he became first a producer, then marketing director.
His estimates of Appleton and Quist’s business sense vary widely from Hume’s. “Bill was truly a mastermind at pulling the sales. He could walk into a company and rule the boardroom table.” He credits Appleton and Quist’s navigation with CyberFlix’s survival during the turbulent mid-’90s, when three different distributors went out of business beneath them, but CyberFlix remained intact. The ability to outlast these multinational corporations became an article of pride.
Jump Raven was so successful CyberFlix promised aJump Raven II. Instead they took a hard turn in a very different direction.
It was Appleton’s idea. Dust: A Tale of the Wired West would be a cyber-western. They likened it to the movie Westworld, but it was really more like High Noon, a classic western set in 1882 New Mexico, with enough quiet to elicit a sense of dread. The only thing cyber about it was the medium, which allowed the viewer to interact with the characters, duel with them in gunfights, even play real poker games with random odds. There was a subtle wit to the game rare in fast-paced, adolescent-oriented computer games.
If you wanted to, you could just sit down and play poker. Or go upstairs and chat up the prostitutes. The sound of wind whispering over the sand masked the threats around the next corner.
One feature that made Dust different was the animation: the 40 characters all had real human faces, with real expressions, albeit somewhat choppy ones, and words that responded to what the player said or did. CyberFlix hired actors to perform—that is, model for the video cameras. Some were professional actors, grateful for this work, as weird as it was—but most were just friends of the company.
Chet Flippo, the well-known music author then living in Knoxville, appeared as the local newspaper editor. Rock singer Brian Waldschlager played gunslinger Jackalope Jones. The CyberFlixters indulged themselves, as well. Martha Hume appeared as Oona Canute, the tavernkeeper/madame. Scott Scheinbaum played a used-horse salesman. Rand Cabus was Buick Riviera, a continental wheeler-dealer.
With a menacing sneer, Bill Appleton himself was a dangerous outlaw known as the Kid. Everyone remarked on how much he enjoyed the role.
Dust got raves in the interactive press; Cabus says 90 publications reviewed it, only two of which didn’t recommend it. It also earned a spot in Macworld’s1995 Game Hall of Fame. It’s still in production today, through another company. Scheinbaum’s especially proud of Dust. “I still get e-mail about it,” he says. “Strangers say, ‘That gunfight thing—I felt like I was Clint Eastwood.’”
However, Dust didn’t sell as well as they’d hoped. “Sales were abysmally small,” says Cabus, estimatingDust sold about 30,000 copies. “To this day, I couldn’t tell you what happened.” Scheinbaum wonders if the typical cyber-personality wasn’t ready for a western; also, the title Dust, meant as an ironic play on the pioneering cyber-adventure Myst, may not have been ideal for maximum sales.
CyberFlix had other irons in the fire, though; they had a lucrative contract to finish GTE’s over-budget adventure game, TimeLapse, which became a classic. “CyberFlix is the reason that title made it to market,” Scheinbaum says. Later, CyberFlix would do other contract work, notably for Disney, working up a computer game calledAladdin’s Math Quest, starring the voice of Robin Williams.
Their own games were what CyberFlix bragged about.Dust had a few rough spots; CyberFlix was sure they could do something similar, but even faster and better.
Andrew Nelson came up with the idea for a game about a sinking ship. Scheinbaum recalls it came up over a conversation in a bar in Boston, while they were there for a trade show in ’94. It would be a you-are-therevoyage on the Titanic’s last night, punched up with a subtle and complicated spy story. You are not just a passenger, but an agent who has the opportunity to prevent World Wars I and II. Parts are as complex as any novel; the “game” opens not on the high seas in 1912, but in a lonely London flat in 1940, during the Nazi blitz. Walking around the room, you learn that you’re a remorseful agent ruminating about the most dramatic night of your life, that last night on the Titanic, 28 years ago.
Appleton was skeptical. “Initially, Bill didn’t have much faith in it at all,” says Kennedy. Nelson persuaded him to go forward with the idea. It was one of few times Appleton heeded a dissenting opinion.
“You’ve got to give Andrew credit for tenacity,” Cabus says. One of the obvious advantages about Titanic was that its limits seemed natural. Most people who’ve triedDust have noticed that it doesn’t allow you to wander out of town; you can see the desert, but you can’t go there. “On Titanic, it was a confined environment, but it wouldn’t feel like a confined environment. It was just a ship.”
When CyberFlix went with Titanic, they went full throttle. “We read all the books, listened to tapes of survivors, looked at 750 different pictures,” says Scheinbaum. They set out to re-create the Titanic in cyberspace, accurate all the way down to the wallpaper design. You could walk up and down the stairway, exercise on the Edwardian exercise equipment, even visit the engine room. It was so impressive that divers to the real Titanic, on a controversial salvage operation in 1995, used the CyberFlix prototype to familiarize themselves with the ship. Cable documentaries also sampled CyberFlix’s recreation.
Finishing the project was grueling, round-the-clock stuff. Scheinbaum remembers several crises. For the British voices, they’d gotten English expatriates living in Knoxville. The problem was that America had diluted some of their accents; English test audiences noticed it right away, and complained. “The British testers said the ex-pats in Knoxville were not British enough,” he remembers. With one month to go, some of Nelson’s friends in the BBC re-read the scripts.
Producer Michael Kennedy sounds exhausted just remembering the Titanic year. “It was a tremendousamount of work, a tremendous effort,” he says. “It was an exercise in staying alive. Sometimes I think, ‘Gosh, I’ll never do anything like that again.’”
Days sometimes stretched to 16 hours, weeks to 70 or more. At CyberFlix, overtime pay was as unknown as a 40-hour week.
Salaries weren’t high; Scheinbaum and others remember that Appleton would urge them on with statements like, “This is your company, too!” or “We’re all in this together.” During some lean times, Appleton did without his own salary to pay the others.
Several who worked there volunteer the word “family” to describe the company, and their motivation to work so hard. “We were a big, dysfunctional, drunken family,” says Bob Clouse. “But in a good way.”
While finishing Titanic, CyberFlix released an old project, Skullcracker, an old-fashioned side-scrolling arcade game. “Every company makes mistakes, and that was ours,” says Scheinbaum. “It should have come out a year and a half before it did.” In 1996, there was nothing staler than 1994 technology.
Meanwhile, Viacom, which had swallowed Paramount, turned Titanic down. Several remember the people at Viacom didn’t seem to know what they were doing. “To them, we were the red-haired stepchild,” Cabus says.
GTE picked it up. CyberFlix finished production in November, 1996, the only time they ever finished a game on time. “There were enormous amounts of hell and high water getting it there—the politics, the emotional rage,” Cabus recalls. The actual game—of all CyberFlixes products, the term “interactive movie” is most appropriate in this case—was finally released in late 1996.
The release came with a gala holiday party at the Lord Lindsey, where parts of the dramatic video, including the hull of the sinking ship, were shown on a big screen. A fatalism swarmed among the revelers. Titanic had been so lengthy and expensive to make, Clouse recalls, some were predicting that “If we don’t sell 200,000 copies ofTitanic, we’ll all be looking for jobs.”
Nevins recalls that Appleton had been especially gloomy about the company’s prospects. He offered unusually big bonuses in ’96, saying they may be needed because “We may not be in business next year.” Several of Appleton’s old colleagues remember that he often made rash statements for effect. “Bill was never on an even keel,” says Nevins. “It was always, ‘We’re going out of business,’ or, ‘We’re doing great and we’re gonna be rich.’”
They didn’t know they’d be getting a shot in the arm in the form of the top-grossing movie of all time.
The CD-ROM Titanic‘s sales were respectable right out of the chute; even in December, ’96, it was on the national bestseller charts. It sold 43,000 in one month, more than Dust’s entire history. “It was time to celebrate, break out the champagne, baby,” Cabus says. Then, on Jan. 6, distributor GTE closed its doors without a chance to enjoy what would have become its all-time biggest seller. Cabus credits Appleton and Quist with saving the company by going to GTE’s California headquarters. “Erik had prepared this document,” Cabus says, giving them rights to recover Titanic and a refund on their investment. Erik warned the boardmembers about Bill’s anger, comparing him to Hannibal Lector. “He said, ‘Just sign it, and we’ll go away.’” They signed. He says CyberFlix was the only GTE client to get money back from the sinking distributor. CyberFlix got a new distribution deal with another distributor, and was off to the races again.
That was all before the movie came out. But then the movie came out. James Cameron’s Titanic was released on Dec. 19, 1997, just over a year after CyberFlix’s Titanic.
Most call it serendipity that the movie Titanic—the “camera movie,” as some Flixters distinguish it from their interactive movie, almost condescendingly—was released while CyberFlix’s most expensive product was on the shelves.
Some, like Clouse, credit Nelson’s canny sense of timing—that, soon after the discovery of the real Titanic, there was something in the air in the mid-’90s that both Nelson and James Cameron picked up on, a fin-de-siècle urge to see that great ship go down again.
In any case, CyberFlix’s Titanic rode high in the wake of the movie. It sold more than anyone expected: more than a million, by some accounts. It broke into the international market, selling well in Britain; the CyberFlix product was eventually translated into seven other languages, including Japanese.
CyberFlix was showing up on everyone’s sonar. Fascinated cyber-author J.C. Herz spent a week in town living with CyberFlixters, and devoted a whole chapter to CyberFlix in her 1997 book Joystick Nation. “In their own slightly deranged way, the 3-D modelers, animators, and programmers of CyberFlix belong here in Knoxville,” she wrote, “where the three largest employers are the University of Tennessee, the TVA, and Oak Ridge National Labs…”
Titanic was selling like amazon.com stock, but the cybergods were still rolling dice.
The reputation of Apple’s Macintosh, CyberFlix’s corporate religion, was in steep decline. For years, Apple’s and the IBM-cloners’ philosophies had diverged. Though some found PC’s more dependable, Macintosh was the intuitive genius of the two, always better for graphics.
Though most of CyberFlix’s games were available in both Mac and PC versions, the company’s allegiance and reputation were solidly with Macintosh. CyberFlix found themselves the stars of several MacWorld trade shows, where a CyberFlix T-shirt made anyone a celebrity. But they were only an impressive oddity at the larger E3 trade shows.
By the mid-’90s, Microsoft’s Windows was matching Macintosh in graphics, overwhelming Mac in sales. Clouse and others think this national phenomenon may have been a decisive factor in CyberFlix’s struggles afterTitanic.
Nevins says it was becoming more and more difficult to produce their own titles without their own distribution system. “It was getting riskier and riskier to do,” he says. “Each time, we had to find a distributor to market our game.”
Hume thinks Appleton was not ready for the Internet phenomenon, which de-emphasized CD-ROM technology and made things you buy in boxes seem like the old kid on the block. “They could have become a rich dot-com company,” she says. “They just didn’t do it.”
In spite of his pride in Titanic, Kennedy, a self-confessed “gamer” before and after CyberFlix, was less impressed with CyberFlix’s handle on new technology than some more casual observers. DreamFactory did allow some real innovations, he says, but “CyberFlix didn’t stay current. We didn’t stay on the cutting edge of things.” Even on Titanic, he says, “it hadn’t been pushed as far as it could have been.” (He sounds as if he’s still smarting from one critic’s observation that some of the “puppet” animation was “Monty-Pythonesque.”)
Divisions developed in the company between those who wanted to make computer games with conventional subject matter and others, including Scheinbaum and Nelson, who were looking for the next Titanic. “We went to Bill and said, ‘We’ve got this historical-fiction genre nailed. We have this new audience of people who never had a computer, never played a computer game. Why don’t we do The Hindenburg?“
Appleton’s answer was vague. “What we’ll do is going to be incredible, just wait and see.”
In April, 1997, Andrew Nelson became the first of the original founders to leave. Most recall him as the loser in a fight over company philosophy. Nelson wanted to stick to historical-adventure titles, like Titanic, and proposed two more projects: one would be an Anne-Rice-style story about vampires in Charleston; the other which would be based on the story of Anastasia, would be set in the Romanovs’ palace. This time, he wasn’t able to convince his colleagues.
Recalling Nelson’s departure on long distance from his Atlanta office, Cabus sighs audibly. “Andrew wanted to come up with another title to publish, but they just weren’t that exciting,” Cabus says. “That’s all Andrew wanted to do. He wanted to find another Titanic. ButTitanic was one of those things we couldn’t duplicate. We were just in the right place at the right time. Lightning doesn’t strike twice.”
Nelson became one of the first signees with the new cyber-oriented arm of the prestigious talent agency, International Creative Management. At a going-away party at the brewpub downtown, Nelson surprised several of his friends with dark prognostications about the future of CyberFlix. He said the company would produce only one more interactive movie: the pirate yarnRedJack, which had been on the drawing board for years. After that, Nelson said, CyberFlix might do plenty of impressive technical work, but wouldn’t ever make any more games.
Today, Nelson’s old colleagues don’t know where he might have come up with that insight. For 18 months after Nelson’s departure, CyberFlix programmers worked in anticipation of launching more games.
Today, working in Chicago for Encyclopedia Britannica’s on-line service, Nelson politely declines comment on his four years at CyberFlix.
Gathering millions in royalties for Titanic, the weird little business on Market Square seemed a sure thing, especially on the local level. The CyberFlix example spawned a whole new way of looking at 145-year-old Market Square. Folded in with an attempt to force out do-nothing landlords, Mayor Ashe proposed wiring Market Square for high-tech companies and transform the space into a breeding ground for more CyberFlixes.
One target of the initiative, the elderly Turkish landlord Frank Gencay, wrote a letter to City Council declaring this new company was full of drug addicts who could not be trusted.
Though easygoing in his walks around the Square, professing a love for downtown Knoxville, Appleton became increasingly fastidious about polishing Market Square’s rough edges. To him that meant running off the lunchtime street preacher, closing the liquor store, and ceasing weekly meals for the homeless. All were downtown institutions of long standing. All are common in most American cities. But all three, Appleton thought, were impediments to making the Square an ideal business environment for CyberFlix.
What he wanted, he said, was more upscale life downtown, both to keep “my people” entertained and to impress business guests from Disney and elsewhere. He thought other small, young, high-tech companies would spawn and support restaurants, nightclubs, and shops that would energize downtown. He was especially frustrated that the city’s Big Steps initiatives, especially concerning the Convention Center, had put a wait-and-see hold on Market Square. “Why is anybody gonna try to buy buildings, renovate buildings, when this new plan is hanging over everybody’s head and threatens to change the whole situation?” Appleton said to Metro Pulse in late 1997.
Appleton may have been naive about his ability to make a difference. “He suddenly got this idea that he could be a power in Market Square,” Hume says. “But he knew nothing about city government. He didn’t even know where city government was. I had to tell him, Bill, there’s this City-County Building, down at the end of Market Street.”
As it turned out, he didn’t have to walk that far. On Nov. 21, 1997, City Council met in crowded special session in a vacant restaurant just across from CyberFlix, and passed a sweeping initiative that would spur landowners to renovate their spaces, with high-tech fittings, or give them up. Appleton himself was the star of the show. Invited to speak, he heralded “a new beginning for Market Square.”
“We will move forward on this as quickly as humanly possible,” Mayor Ashe said. The Council’s action got loud applause.
After the meeting, CyberFlix hosted a reception for City Council and the media. Mayor Ashe began citing the CyberFlix phenomenon on Sunday talk shows as evidence of the dynamism of downtown.
Assuming that Titanic‘s success was a fluke, some Flixters thought their real future was in more conventional “shooting” games. However, CyberFlix proved it was willing to take chances with subject matter in the first concept for the pirate yarn RedJack. Originally, RedJack was going to be a happy piratemusical. Scheinbaum and others composed songs for it. Nevins recalls it was laughed out of a focus group. “We had to change it into a dark, brooding tale about pirates,” Nevins says. They lost valuable time.
RedJack: Revenge of the Brethren is a beautiful thing for a computer game, with rich, cinematic scenes as impressive as those in Titanic, plus newer technology that allowed faster transitions, smoother movements, more freedom. In RedJack, you can look up and down and move around in ways that were impossible onTitanic. Its new technology reflected Appleton’s ever-improving DreamFactory.
In some ways, though, RedJack was a throwback. Though it was another historical drama, the linear storyline was much simpler, without the wit, subtleties of personality, and complex interrelationships that characterized Titanic and Dust. RedJack’s hand-to-hand combat made it seem a compromise with the continued demand for fast-paced, adolescent-oriented “shooters.”
Looking around at the E3 conventions in Atlanta in ’97, it seemed clear that if the era of the Interactive Movie was indeed on the horizon, it wasn’t here yet. Even in the late ’90s, most gamers were still teenage boys, just as they had been 20 years earlier. And though they were much more technically sophisticated, the overwhelming majority of computer games were still shoot-’em-ups, as they had been in the days of Space Invaders. Interactive movies hadn’t caught on with adults, even those who’d grown up with computer games.
Some were taken aback when a fellow gaming pioneer dropped by, looked at RedJack with interest, but added, “You do know the adventure game is dead, don’t you?”
Some expressed frustration watching teen gamers skipRedJack’s moody scenes to get to the next fight scene. Finished in late ’97, RedJack didn’t sell nearly as well as hoped; its total sales may have been as little as 10,000 nationwide, hardly 1 percent of Titanic’s success.
One problem was that by the time of RedJack’soverdue release, its technology was already being outpaced by other games that offered even smoother movement and a much sharper 3-D effect. “If we had shipped RedJack in ’97, it would have been front-edge,” says Cabus. “By ’98, it was old hat.”
Aware of the deficiency, Appleton had improved DreamFactory once again with what was known as Real-Time Polygon technology, which could produce images and movements never before contemplated at CyberFlix. Two development teams worked away on two different games that would reflect the new technology. One was a faster, higher-tech reworking ofJump Raven, with the working title Jump Raven II. The other was a sort of circus-based horror game about mutant clowns called Three-Ring Apocalypse.
The company’s “treehouse” mentality was still strong in early 1998. Just a year and a half ago, CyberFlix was hauling in a pool table for employee use. Even Southern Living profiled the company. “Finally our mothers can be proud,” they quipped.
In late spring, 1998, Quist gave the team a pep talk—Nevins calls it Quist’s “thousand-points-of-light” speech—declaring things were going very well for the company. Titanic royalties were rolling in, two new titles were in production, Appleton and his inner circle were hard at work on DreamFactory. Quist said ’98 promised to be their best year ever, adding that those present would one day be proud they were part of the original core. He announced a new three-year business plan that would have taken the company through 2001. With this injection of confidence, Nevins says two of his colleagues bought houses in Knoxville.
Things were going so well, Nevins and others were confident that the company was about to become a publicly traded stock and that their shares would finally be valuable. “Everybody was hoping to be shareholders in a strong company,” Nevins says. “But we never heard about stockholders’ meetings, we never saw the minutes, we never got stock certificates.”
According to a court document filed this month, on May 8, 1998, Appleton and Quist held a “stockholders” meeting unannounced to any other stockholders, at which they awarded themselves $600,000 and $400,000, respectively, calling them “bonuses.”
In June, 1998, while he was jogging in the Old City, Scott Scheinbaum suffered a heart attack. At the time, he was only 38 years old. Now recovered, Scheinbaum suspects overwork contributed to his condition.
Several noticed that Appleton was more distracted than ever before; he was in the office less in 1998 than he had ever been. The programmers say they were frustrated not to get the “feedback and validation” they had come to expect from Appleton.
Nevins says Appleton was indeed disappointed in Knoxville, and of inaction on the City-Council approved Digital Crossing initiative—”that joke,” as Nevins calls it. It had been several months since the City Council’s grand gesture, and the city had made no moves to improve the square.
Some say Appleton grew skeptical about Digital Crossing. “Bill felt the city was not that behind it,” says a friend, “any more than they’re behind saving historic buildings.”
Nevins says that by 1998, Appleton’s frustration had mellowed into disenchantment with the whole idea. “What advantage does it give us?” he had asked Nevins. “Maybe a cheaper Internet connection,” was his conclusion.
That fall, Scheinbaum says Appleton told him the company was suddenly in trouble, even going out of business. In response to the rumors, Quist called a meeting in the third-floor conference room; they were halting production on the two 3-D games. If you want to stay, he said, you’ll need to find a place developing DreamFactory.
Appleton was not present. “Erik was Dr. Jekyll to Bill’s Mr. Hyde,” Nevins says of the duo’s symbiotic relationship. Quist was better with flesh-and-blood people. But this time, some had the impression that Quist may not have known the full story himself, and was trying to second-guess Appleton’s intentions.
On Monday, November 30, just after Thanksgiving break, Appleton himself called a meeting, a rare thing. He seemed somber, and didn’t waste time. He had decided to close the company. He offered little explanation except that he was not “willing to gamble my money” on the two new projects. (“At that point,” Nevins says, “somebody should have piped up and said, ‘It’s not completely your money.’ But nobody did.”) Appleton added that “Knoxville has nothing to offer CyberFlix.”
He tendered respectable severance packages to those who were willing to surrender their stock options in the company—including, in several cases, expensive equipment. Many are convinced that severance packages would not have been there without Quist’s insistence.
Two days later, Erik Quist released a statement about the company’s prospects.
“The time was right to make the transition away from title work” toward improving its greatest asset, DreamFactory. There was mention of an “independent studio” to be called ACME, which would work for third parties, as well as for CyberFlix.
“Establishing an independent studio will allow CyberFlix to have the ability to put all efforts into the technology while still having a means for the latest versions of the technology to be tested in the field…” Quist added, “We think our prospects are excellent…”
There was no mention of CyberFlix, Inc., ceasing to exist in Knoxville. The blandness of the statement surprised many downtowners who had already been hearing rumors that CyberFlix was going out of business, not merely splitting into two parts. Unfortunately, the rumors were more accurate than the official statement.
Of the deliberately misleading press release that he helped write, Cabus says, “Bill did not want to make it look bad for Knoxville.” Nevins remembers it that way, too. Neither can explain how it would look better to scuttle CyberFlix and just not announce the fact. They say Appleton’s local reputation was important to him, and he may have wanted to be out of town before people realized he had scuttled the company that was to be the anchor for the Digital Crossing project.
Reactions varied with personality. “It was a complete surprise,” says Michael Kennedy. “A complete sense of having the rug yanked out from beneath you. But I’m one of the lucky ones. I didn’t have a wife and kids.”
“I did not feel slighted,” says Clouse. “I felt liberated. I felt I’d pulled off some kind of coup. I was ready to get out. I was tired of it.” He’s much more understanding of Appleton than most of the others. “It’s his decision, it was his company. He can do what he wants.”
“Legally, he [Appleton] might be in the clear,” Kennedy says. “I’m just disappointed in Bill as a person. It’s sad it had to end that way.”
Cabus did not join in the lawsuit because he thinks what Bill did was probably legal. “That’s what he could do,” he says. “How many times in your life do you see a chunk of change you can just put in your pocket? All the IRS can say is, ‘You made a big salary that year, Mr. Appleton.’
“No, it wasn’t the nicest thing,” allows Cabus, the old PR man who, in a two-hour conversation, had said only extravagantly complimentary things about Appleton. “Morally, what Bill did was reprehensible. It pretty much sucked.”
“He always sold the business as a ‘family,’” Nevins says. “Family members can get pretty bitter when you leave and don’t offer an explanation.”
Several were upset with what they see as Appleton’s sense that DreamFactory gave him title to CyberFlix itself. “We made the movies,” says Scheinbaum. “Bill built the projector.”
According to the Scheinbaum-Wicks lawsuit, about one week after Black Monday, Appleton and Quist awarded themselves additional bonuses of $1,700,000 and $450,000, respectively. The lawsuit alleges that these bonuses emptied the company coffers, denying Wicks, Scheinbaum, and the other stockholders their fair share. Scheinbaum and Wicks each theoretically owned 4 percent of the company, a small portion, but the same amount they claim Quist owned. By a severance agreement drawn up by Quist, they were offered $10,000 to forfeit their claims—which they did, but now allege the agreement was fraudulent.
Most only heard about Appleton’s departure. He didn’t say good-bye to several of his longtime colleagues. “I don’t think he said good-bye to anybody,” Nevins says.
Some wonder if Appleton had lost confidence in DreamFactory’s ability to keep up with current technology; others think he was just tired of running a business. “Bill was an artist, and liked to think of himself as an artist,” says Clouse.
“I think he was burnt out,” says Nevins, saying Appleton sometimes seemed uncomfortable having responsibility for 30 employees.
However, several of Appleton’s old colleagues say the fate of the company may have been as simple as the fact that Appleton’s new girlfriend Jennifer, a former bartender at the brewpub, wasn’t as charmed with Knoxville as Appleton had once been. She wanted to move to California.
They’re there now; the Appletons were reportedly married earlier this month, and live in a big house together, in San Jose. Appleton’s Knoxville attorney, Brian Quist (Erik’s brother) declined to divulge his current pursuits, but said he’d have no comments to make either on the lawsuit or on any other aspect of the company’s history.
The “independent studio,” ACME, eventually became Atomic Studios, but after failing to gain contracts, never really got off the ground. Nevins recalls the phone call they got from a prospective client in New York who admitted they were going with a company of lesser talent merely because they were located just down the street. Now half-owner of a video-production company called Gone Postal, Nevins is now the only CyberFlixter still on Market Square.
CyberFlix itself seems to have vanished with Bill Appleton. There’s evidence it still exists as a corporation. Titanic, Dust, and RedJack are still on the market, but distributed by a company called Barracuda. Appleton still owns DreamFactory, and most assume he’s still retooling it, as he has been for over a decade. Attorney Brian Quist declines to answer questions about the company’s status, and about his clients’ current pursuits.
Contacted at her Manhattan office, where she’s now computer-game critic for The New York Times, author J.C. Herz assesses CyberFlix as “certainly an interesting company. They did things that were different, with the limited means available to them, that is, CD-ROM.”
Then she offers a line that sounds like a retelling of “The Emperor’s New Clothes”: “The weakest part of the games, I think, was the architecture used to build them. The strongest part of CyberFlix was the artistry and storytelling,” she says, which were unique in an industry characterized by cliché. “Jump Raven, Dust—they seemed unusually good in spirit and attitude. There was a sense of humor there you don’t see often.”
DreamFactory, she says, is at best a struggle with aging technology. “It’s like a kit car in a world of Indy 500 performance vehicles,” she says. “What Bill Appleton did was walk away from the truly valuable part of the company.”
Meanwhile, musician Scott Scheinbaum and artist Jamie Wicks are asking for a combined total of $20 million in compensatory and punitive damages from Appleton and Quist. The case is now in the discovery period, and may come to trial sometime next year.
Scheinbaum and about half the former CyberFlixters still live in Knoxville, many of them working in computer graphics at companies like IPIX, Digital Discoveries, and Atmosphere Pictures. Others are far afield; Eric Whited, art director for RedJack, is now doing something similar for the prime-time, animated FOX show Futurama.
Michael Kennedy and Rand Cabus work for the same 3-D modeling firm in Atlanta. “This weekend I was in a mall in Atlanta, going through the store, and they had a copy of Titanic on the cheap rack,” says Kennedy, laughing. “It’s still around. But it’s kind of sad to see it there.”