Without stepping foot in Silicon Valley, a local kid who grew up loving games and computers started with a frozen yogurt shop and ended up building a video game company that brought a Silicon Valley giant to Sacramento. Here’s how rolling some very funny-shaped dice paid off in a very big way. And how it almost didn’t.
tanding on the corner of 20th and J streets on a cold Friday night in December, Christmas lights dot the trees and lampposts, but suddenly an altogether unexpected radiant source appears in the darkness—lightsabers. It’s difficult to see the details or the identities of the shadowy combatants lit only by the orange glow of their weapons as they slash through the air, but at least one appears to be wearing a cape.
The scene, by all accounts, would strike most observers as more than somewhat out of context. There’s not a Star Wars or Comic-Con convention anywhere in sight. Instead, the dark figures are in a parking lot sandwiched between a pizza parlor and a pair of nightclubs. As it happens, the strange occurrence makes substantially more sense than even the warriors in question may have realized.
That’s because only weeks earlier, the faceless lightsaber rattlers became employees of one of the world’s largest video game companies, EA (aka Electronic Arts), the very same company that within days of this impromptu urban skirmish released one the biggest new video games on the planet: Star Wars: The Old Republic.
The force was decidedly with them.
They were, it turns out, game developers who were taking a break outside of their red-bricked office with white columns, the headquarters of a four-year-old game maker known until recently as KlickNation before it was acquired by EA on Dec. 1, 2011 for many millions of dollars. But their saber play likely had less to do with their newfound affiliation to the legendary film franchise than the simple urge to express their inner fanboy by recharging their creative juices between bouts of intense late-night programming.
Minutes after the half-hearted battle ends, the 38-year-old founder of KlickNation and the man responsible for luring Silicon Valley’s biggest gaming company to Sacramento pulls into the still-full employee parking lot behind the wheel of a sleek, metallic grey BMW roadster after a weeks-long visit to EA’s Redwood City headquarters.
Despite the temperature hovering somewhere in the 40s on this night, the car’s convertible top is down as it has been for the entire three-and-a-half hour drive. But the car’s driver, Mark Otero, like so many other lifelong gaming fanatics, seems so thoroughly ensconced in a world of his own making at the moment, that he doesn’t seem to notice.
In fact, as he reorients himself to familiar surroundings, it’s clear that he’s struggling to mentally toggle between a dream world and the real world. Just 24 months earlier, he was desperate and scared, drowning in a mountain of tax debt and within months of losing both his home and his business, with a steadily worsening economic situation.
On this night, however, weeks after selling his business to a $7 billion gaming company for a widely reported $35 million, he’s now a general manager with EA’s wildly popular gaming division BioWare, and overseeing two of its “studios”—the newly named BioWare Sacramento and the existing BioWare San Francisco. His new boss is a legend in the gaming world, and Otero has singlehandedly put Sacramento on the map of one of the fastest-growing and downright coolest segments of the technology world.
“It’s all a blur,” he says, shaking his head in disbelief, when asked what the last few weeks have been like. “I’m living my dream.”
And like with all entrepreneurs, his journey started with a roll of the dice. Of course, in this particular case, it was true in the most literal sense possible.
How to Train Your Dungeons & Dragons
Game players of a certain age will remember a fantasy-based, role-playing game called Dungeons & Dragons, or D&D in gamer parlance. Think Lord of the Rings played without joysticks or high-definition screens, but rather with books, paper, pencils and multicolored, polyhedral dice with up to 10, 12 or 20 different sides. And unlike today’s versions of multiplayer games where you can wage virtual battle with players in different cities, states or countries, this was a game you played face-to-face.
You know, looking at each other.
Influenced by the seminal J.R.R. Tolkien trilogy that followed the adventures of Frodo and Bilbo Baggins through Middle-earth, the game, created in the ’70s, allowed players to assume the form of virtual characters in a Tolkien-esque universe filled with wizards, monsters and sundry mythical creatures and lands. They set about on various adventures with many of their actions and outcomes determined by a roll of these strangely shaped dice.
Otero was only 8 when he discovered D&D. Heavily story-driven, the game fueled his young mind. And at the time, the video game industry was also in its early years. Perhaps it was fate that he hadn’t discovered video games first. As much as he would grow to love them later, video games were an entirely different creature. They were fast-paced and highly visual, with limited options for exploration, at least in the early days. But not in D&D. Here, a player created his own worlds. And Otero wanted to create his own worlds.
He was hooked.
There was only one obstacle—his mother, who called the game “evil,” as did others at that time because of the sorcery and witchcraft elements. But to this young, impressionable Korean boy in 1981, it was the defining game that would ultimately become the foundation for his success and determine his future in more ways than he could have dreamed.
Unlike early video games, D&D required and inspired a great deal of imagination and strategy. In the mind, nothing is impossible. Many years later, when asked why he started KlickNation in Sacramento instead of moving to Silicon Valley or the Bay Area to launch it, his answer was simple: “I didn’t know I couldn’t do it.”
And within each group of players was someone called the “Dungeon Master,” or DM. This was the person who possessed a much deeper understanding of the rules that govern the game, and would essentially serve as the referee, guide and chief storyteller. According to a recent edition of the “Dungeon Master’s Guide,” the DM’s goal “is to make success taste its sweetest by presenting challenges that are just hard enough that the other players have to work to overcome them, but not so hard that they leave all the characters dead.”
Sounds a lot like a CEO.
Mark Otero was a Dungeon Master by age 10.
In fact, on the night that he’s returning to Sacramento after weeks at EA’s headquarters and the BioWare San Francisco office, he’s sitting in a conference room (he doesn’t have his own office; he works at a desk surrounded by others) in front of several framed covers of D&D books, constant reminders for him of where his journey began.
He is openly marveling at the path that has brought him to this point. The previous weeks and months have been so utterly chaotic for him, that he appears to only now be fully absorbing the reality of it all.
“Here I was, a Dungeon Master, a game nerd, who decided to make a game company when I didn’t know anything about making games,” he says. “And here we are. I feel like a part of my life has become complete.”
But despite his sincere expression of wonder, a look back at his adventure reveals far more strategy than luck.
Born in South Korea in November 1973, Otero was the second child of an American GI of Puerto Rican descent from Nebraska and a Korean mother who was working in a tea house at the time. His father John was serving a tour of duty there when he met Mark’s mother, Hui Cha, at a Kung Fu studio. They had four kids together, and two of them—Mark and his big brother David—had only one thing on their minds in the months leading up to Christmas, when Mark was 11.
“They wanted a Commodore 64,” says his father. “I was dead set against it.”
“We begged our parents for one,” says Mark. The Commodore 64 wasn’t the first gaming system on the market,
but unlike its predecessors’ focus on arcade-style games like Pac-Man and Asteroids, the Commodore 64 specialized in role-playing games, including one that proved irresistible to a young Mark Otero: Advanced Dungeons & Dragons: Pools of Radiance.
And as much as he loved exploring the imaginary worlds of the old-school version of Dungeons & Dragons, his own world changed on Christmas morning when his parents finally relented.
“It was the best gift ever,” says Mark.
“After we got him that computer, there was no looking back,” says his father John. “He was consumed with computers and computer games.”
And so it was with some serendipity that in 1986, when Mark was 12 years old, John Otero was transferred to the Sacramento Army Depot.
It was a path that would lead Mark to what was then known as West Campus Hiram Johnson High School, and it was a school that offered an ROP program, or a Regional Occupational Program, which trains high school students in practical skills that they can use in the workforce. One of the available courses: computer programming.
Unlike most kids who are content to come home after school and play games, Mark knew early on that he wanted to actually make them. And now he had his chance to dip a virtual toe in the water. So in his junior and senior years, he learned basic programming in the hopes of one day working for a video game company.
As he got older, he also steadily up-graded his game systems, progressing from the Commodore 64 to Sega and Xbox. But unlike most avid video game players, he didn’t stop playing D&D. Even as the graphics and technology for video games rapidly improved, the appeal of creating stories and relying on imagination and strategy maintained its hold on him.
And it continued well into college, first at Sacramento City College and then at Sacramento State where he chose computer science as his major. By now, however, his ambitions had expanded. He recalls a time when he was 18 or 19 and was shopping at a local mecca for comic book lovers at the time called Comic Box in South Sacramento. The owner of the store was a comic book artist named Paul Martin. One day, Martin, who would later join KlickNation as an art director after years as an artist with Marvel Comics, asked the teenage Otero what he wanted to do with his life. His answer: “By the time I’m 35, I’m going to have a video game company.”
From Middle-earth to Middle Management
Before he would graduate from college, though, one more seemingly fateful event occurred—a new video game was released that was largely based on D&D rules, one that far surpassed the quality of anything Otero had seen before. The game was called Baldur’s Gate and was made by a small video game company out of Alberta, Can-ada. The company was called BioWare.
“Baldur’s Gate was the one game that was able to adapt the D&D paper and pencil and dice game into a real video game,” he explains. “As a Dungeon Master, I was an interactive storyteller, so when I played Baldur’s Gate, which is an interactive storytelling game, I knew my days as a human Dungeon Master were coming to an end. The writing was on the wall.”
But when Otero graduated in 1999, it was the Internet, not video games, that was exploding. So, like many others, he “followed the money” and began developing Web applications at two local start-ups, one in Rancho Cordova, the other in
El Dorado Hills, at a breakneck pace for several years until the bubble burst in 2001. “I had squandered a couple of years making Web applications instead of learning the art of making games,” says Otero.
Still paying off college loans, he needed a job that paid well, but also one that would give him the management and leadership training he knew he’d need for his eventual video game company. So in 2001, he joined Franklin Templeton Investments in Sacramento as an analyst and worked his way up to middle management within three years. He was making six figures by his late 20s. But he wasn’t happy and knew he needed to get back on track if he was ever going to start his video game company by 35, as he so boldly declared as a teenage boy.
So he decided to take advantage of the company’s program to help fund an MBA degree, and in 2004, while still working at Franklin full-time, he began a three-year program taking night classes at the UC Davis Graduate School of Management with an emphasis in marketing.
What he needed, he realized, was a vehicle that would give him enough of those two elements—money and time—to get him started. And in the end, he settled on the squishiest of foundations upon which to build his video game empire—yogurt.
“I picked a field I knew nothing about,” explains Otero. “And I ended up loving marketing because it’s about storytelling, and I realized that all of my Dungeon Master skills came into play.”
Andrew Hargadon, who teaches the school’s Innovation & Entrepreneurship course, recalls that Otero “was curious and challenging and really trying to understand the tools of the trade.” Hargadon says his class tries to get away from the notion that success comes from geniuses who have great ideas. “The real genius is actually in recognizing which pieces to pull together and having the commitment and skill to pull them together.”
At this point, Otero had the commitment, and he had steadily acquired skills in the same way that D&D characters acquire weapons and magical powers to help them survive their journey. But he was missing two key variables—money and time. And so, nearing graduation, Otero quit his job at Templeton in the fall of 2006, cashed out his 401(k) and sold all of his stocks. It was time to get serious. He had about $75,000 total, but he knew that wouldn’t get him very far in a tech start-up.
What he needed, he realized, was a vehicle that would give him enough of those two elements—money and time—to get him started. And in the end, he settled on the squishiest of foundations upon which to build his video game empire—yogurt.
From Frodo to FroYo
In the summer of 2007, only six weeks after earning his MBA from UC Davis, Otero opened a small frozen yogurt shop in midtown Sacramento called Mochii.
“I needed a brick-and-mortar business with consistent revenue streams to offset my living expenses,” he explains, sounding every bit like a recent MBA graduate.
After hearing about the hand-crafted, all-natural frozen yogurt craze started by Pinkberry in L.A., he saw an opportunity to capitalize on a hot trend, while continuing his business education in the real world and using one small business with smaller start-up costs to ultimately finance a bigger one.
“Mochii also afforded me the most valuable gift,” he says. “And that was the gift of time to think about what I wanted to do and to create the type of products I’ve always wanted to create. Most people spend most of their waking hours at work and they use their creative cycles to do that.” Otero knew that once he got Mochii up and running, that it was the kind of business that would allow him free time during the day to strategize.
But he also knew that Mochii couldn’t thrive without a strong business plan and without devoting every ounce of his attention to the company in the launch phase. So he characteristically threw himself into the subject matter headfirst, devouring every bit of knowledge he could gather about the frozen yogurt industry, and he tried to find a niche that didn’t already exist here.
Not knowing how long he’d need to get KlickNation off the ground, he even tried to anticipate his future competition. So he traveled to Los Angeles to taste the famed Pinkberry brand, knowing that he wanted something similar but also distinctive. He hired a food scientist in Arizona to help him design a flavor profile that was slightly more tart and less sweet than Pinkberry’s product. “That way, if Pinkberry ever entered Sacramento,” he explains, “I would have trained the people who have been to Mochii to like my flavor.”
He also used his training from his marketing degree. “The art of marketing is really about telling true stories that people already believe,” he says. “If you don’t tell stories that people believe, it’s very expensive to try to convince them.”
So when he tried to settle on the name, he knew it needed authenticity so it would resonate with people. So that the story would make sense. “I decided to call it Mochii because I’m an Asian guy,” he says. Mochi, normally spelled with one “i,” is an Asian rice-based, marshmallow-like food that is often used in desserts. His concept was to serve frozen yogurt not only with fruit (as many others were already doing), but also with tiny pieces of flavored mochi squares. It was another way to set his brand apart from the competition. “I came up with an Asian name so people can say it’s a true story, but it was also a cute name.”
In the months before he opened, with $75,000 in his bank account, he meticulously calculated that the business would cost him $50,000 to open. He used $13,500 of that to buy out the existing café and opened the shop in June on a shoestring budget. But his cost estimates were slightly off. It actually cost him $65,000 to open the doors, leaving him with only $10,000 in the bank.
Fortunately, the business was an instant hit. On its first day, more than 400 customers walked through his doors. Suddenly, he was making money. Lots of money. “It was incredibly profitable,” he says. “I had never seen money like that before.” That left Otero with a very real dilemma. He’d finally found success as an entrepreneur, and believed there was potential to expand the company to multiple locations and perhaps become a frozen yogurt magnate. Could he really walk away from this?
“I had to make a decision several months after opening,” he recalls. “Do I pursue Mochii or do I pursue the reason I started Mochii? “It was not an easy decision.” Ultimately, he decided to go with his gut. And the fact that the company was so profitable would help him launch KlickNation faster, while still continuing his education as a business owner.
Fittingly, for a shop based on a product using live bacterial cultures, Mochii served as a petri dish of sorts for Otero, who was learning on the job how to run a business, with real-world hiring, firing and negotiating.
But little did any of the customers, or even his family, know the extent to which Mochii was merely a stepping-stone for him. Within weeks of opening the shop’s doors, he began spending less time at the counter serving up tangy “Zang” yogurt and increasingly more time upstairs in a makeshift office above the shop (with a sofa that would often double as a bed), plotting his next company.
Once again, however, his plans shifted and video games would have to wait. In the same way that he jumped into the Internet in 1999 when that industry was exploding, by 2007, the world of “apps”—
applications for handheld devices like smartphones—was taking off.
And with every bit of energy and more that he devoted to learning about yogurt, he threw himself into learning about handheld applications. Even though he was a computer science major, that was long before the world of mobile phone apps was born, and so again, he was virtually starting from scratch, voraciously reading everything he could get his hands on. It was during this time, in Mochii’s first months, that he started brainstorming his very first apps.
He was also getting married. Otero had met Julie Ku at Empire Club on R Street three years earlier, and they wed in September 2007. Everything was seemingly on track.
By 2008, though, he knew he needed help with his fledgling app business, so he brought on a programmer. They started developing and releasing apps to an international audience. The apps included everything from Daily Babe and Daily Hunk to one called Spank Me, where the user could send a “virtual spank.” It was “silly stuff,” Otero says now. Out of the 30 apps they created, the biggest success was Kiss, which allowed users to send virtual smooches. At its peak, it had nearly 400,000 daily users worldwide. Otero was even invited to a Google conference in Beijing to give a presentation on his apps.
“We were the first- or second-largest social developer of apps in non-English speaking countries like Romania, Chile, Mexico and Thailand,” he says, but the nascent company couldn’t generate enough ad revenue off the apps to make the effort worthwhile. In all, KlickNation had produced 30 different apps, but Otero recognized that it wasn’t working. The money simply wasn’t coming in.
Despite their relative success with users, the apps were generating only a few hundred dollars per week, and Otero was losing a lot of money. He had been pouring all of the profits—and then some—from Mochii into developing the apps. As 2008 was coming to a close, despite literally sitting on top of a very profitable business, he was now drowning in debt, and sinking—fast.
Holding Out for a Hero
Exhausted and broke, Otero took a quick weekend trip to Seattle with his wife for their one-year anniversary in September 2008. As a pharmacist, Ku was making more money than Otero, so she paid for the airfare and hotel. On one of their first nights there, the two went out to dinner, and when the waiter brought the check, Ku waited for Otero to pay. “She figured [that since] she paid for the entire trip, that it was only fair I pick up the dinner tab,” he says. But he couldn’t. “I don’t have any money,” he told her. “I’ve got to make payroll.”
In fact, it was much worse than she even knew.
Not only was Otero putting all of Mochii’s profits into KlickNation, he was falling behind on his student loans and taxes, too.
“He was robbing Peter to pay Paul,” says his dad, John. “A lot of times his sister Christina, after she finished her eight hours at [Kaiser] hospital, would go over [to Mochii] to help him out. And he couldn’t always pay her. His concentration wasn’t on the yogurt shop; it was on the games.”
A few months after Seattle, Otero got a small, unexpected windfall. He worked out a deal with a social networking company that was looking to monetize social apps and Otero pocketed between $40,000 and $50,000. He figured this gave him one last shot, but he still didn’t know what he was going to do.
In December, with a little cash in his pocket, Mark and Julie took a trip to Hawaii, their first real vacation in years. And that’s when lightning struck.
“I was inspired by the beautiful landscapes and the Tiki idols—the gods and goddesses of ancient Hawaii,” he recalls. “Then it hit me. What if we made a game based on the supernatural in a cosmopolitan setting? These supernatural heroes will travel the world to foreign and exotic locations. That was it.”
He knew he was finally ready to make a game.
As it happened, only a few weeks before Mochii’s doors opened in the summer of 2007, Facebook released something called the Facebook Platform, which allowed developers to create applications, including games, for the social networking site. Otero had been keeping an eye on it, but his focus had been strictly on apps. So he decided to use his knowledge about apps to create a game on this new platform.
Almost immediately upon his return, and with less than $50,000 left in the bank and with tax debts mounting, Otero
began hiring. In February 2009, KlickNation had four people. By April, it had eight. “If we’re going to go big, then we’re going to go down big, too,” he says of his mindset back then. “This was our Hail Mary.”
The original name for the game was Clash of Heroes. And although it was inspired by his Hawaiian vacation, Otero didn’t have to reach far for the concept. The idea was that users could select their own character and acquire a set of weapons and powers that would help determine their outcome as they did battle with strange and mythical creatures in exotic locations. Its DNA was clearly D&D. And Otero was once again a Dungeon Master.
“That’s when the magic happened,” he says excitedly. “I was alive again.”
With his tiny staff sharing a small room above the yogurt shop, Otero often worked so late that he would spend the night on the office sofa for days at a time. But it didn’t matter. “I was really happy,” he says.
And instead of relying on banner advertising like the failed apps did, the game would be free to play, but hard-core users could use real money to buy virtual cash which would allow them to purchase extra powers or weapons to help them rise in the ranks and advance. But they had to get hooked first, so it had to be good.
“This organism itself is sentient and it determines what it wants to do,” he says, describing [the company] almost like an alien that might appear in one of his games. “But it does good things. The culture is really strong. Everyone is happy, energetic and friendly. But also if you don’t fit the culture, this life form will spit you out. They’ll seek and destroy any type of foreign objects.”
The team was designing and programming as fast as they could, all eight guys sitting together in front of their computers in a 553-square-foot room filled with mountains of Styrofoam yogurt cups. But one of the guys—Otero—still had another business to run. Because he couldn’t afford to pay many people to work at Mochii, he was often the only one in the shop. “In between serving yogurt cups, I went into the back room behind the curtain and I was typing up the specs,” he recalls. “I was having the time of my life.”
One of his early hires, Aaron Nemoyten (now a designer and engineer at BioWare Sacramento) recalls watching Otero juggle his dual role. “While we were working on the game, he would say, ‘OK, guys, it’s 4 o’clock. I’m going to go downstairs and work the counter.’ Because there was no one else to do it.” But there were other times when Otero couldn’t afford to be away from the team that long, so he did the next best thing.
“He’d say, ‘I’ve got to talk to you about something important but I’ve got to work at Mochii. So put this apron on, but look busy so people don’t expect you to help them, and I’ll talk to you about this thing between customers,’ ” remembers Nemoyten. “So I sort of hid in the back room while there were customers and pretended I was busy.”
The two had met at a developer conference in San Francisco. “I remember seeing him at the time and noticing that he was well dressed,” Nemoyten recalls. “In a room full of nerds, you stick out when you’re wearing a blazer.”
When Otero was building his KlickNation team in early ’09, the start-up that Nemoyten had been working for had just gone belly-up. He was living in the Bay Area, but was inspired by Otero’s passion and ideas enough to take a big pay cut and commute nearly every day from Fremont for the first few months.
“The thing about Mark that most people notice right off the bat is that he speaks very passionately,” says Nemoyten. “When he’s passionate about something he gets very serious, and he gets a very specific tone. At first, you don’t know if he’s just being a salesperson, but as you get to know him you find out that it’s completely genuine. He’s such a big nerd—you usually don’t get people who have those sorts of interests and can also talk to you that passionately about products. He had sort of an elder wisdom that you wouldn’t expect from someone in their early 30s.”
Nemoyten says Otero did a good job of sheltering the guys from how desperate his situation was at the time. “But I did get the impression that [this game] was sort of all in. It was this or bust.”
His impression was spot on.
As Otero and the team were feverishly working on the game through the spring, he was running out of what little cash he did have. He had maxed out two credit cards and was now late on making the monthly payments. He was also over a year late on his school loans. “I couldn’t buy anything,” he says. “No clothes. I stopped drinking wine and alcohol because I couldn’t afford it.” To save money on meals, he would often go downstairs and fill a yogurt cup with fruit from the topping counter and bring it back up and eat while he worked. “It was really hard.”
Then it got worse.
He began receiving increasingly threatening letters and calls from the IRS. “I don’t watch much TV,” he says. “But when I did watch TV, they always had commercials asking, ‘Do you owe money to the IRS?’ I swear my blood pressure would increase. I would literally switch channels. I didn’t want to think about it.”
If Clash of Heroes didn’t work out, Otero knew he didn’t have enough money to pay off the debt and that he would likely lose Mochii and possibly his home. “At that point,” he says, “you have to ask yourself, ‘Are you a madman or are you onto something special?’ ”
But the IRS was getting closer.
“Then they found out I owned Mochii,” he says. They threatened to put on lien on both of his personal and business bank accounts. At this point in the conversation, Otero’s voice changes tone and gets considerably quieter. “That’s when it started getting a little scary.”
The game wasn’t finished yet. Without the funds, he couldn’t finish the game. He needed just a little more time, so he hired a lawyer who worked out a deal with the IRS that bought him a few extra months—enough time, he hoped to release the new game.
He knew that everything was riding on this one game. “It’s got to work,” he would tell himself. “Something’s got to work.”
Otero and the team raced to finish the game, and it now had a new name: Superhero City. “It was the very first game on Facebook with animated battle sequences,” he says now. The release date was set for June 16, 2009, but the $50,000 that he started with in January was almost gone. By the time that day arrived, Otero had less than $10,000 left in the bank.
Once it went live on Facebook, all they could do was wait.
For the first few weeks, very small amounts of money were coming in, less than $50 a day. Pocket change. Otero would track it as he tried to keep Mochii going and fend off creditors. At first it was less than what he made on his failed apps. He was sweating bullets.
And then, on July 4, something happened. For the first time, the game’s daily returns passed into triple digits, bringing in $343 on a single day. It may not sound like a lot, but Otero knew it was a good sign. “I called my family,” he says. “And I said, ‘Mark my words, this game is going to make millions.’ ”
“He was like a little kid in a candy store,” his father recalls.
But Otero was far from being out of the woods.
Although the game continued producing revenue—and was growing—he still had to spend thousands of dollars per day marketing the game to Facebook users to attract more players. He also needed to keep paying his team to make adjustments and improve the game on the fly. It was certainly promising, but he still needed to spend a lot of money to make money, so virtually every dollar they were making was going right back into the game. And the IRS was now calling him again. But he wasn’t picking up. He needed more time.
Within months of the games’ debut, he recalls a very difficult moment. He and his wife were driving to a department store one night, and as they were walking through the parking lot, she was opening a letter from the IRS that was addressed to her. “She stopped in her tracks,” Otero remembers. The letter was informing her how much money Otero actually owed. “She crinkled her [brow] and she looked at me. ‘Is this number right?’ ”
The number on the letter: $300,000.
Technically, it was right, Otero said, but it was complicated, and he explained he wouldn’t actually have to pay that much (the amount factored in certain costs associated with their home). Otero says that at that time, he actually owed the IRS around $75,000 in back taxes. Not exactly comforting numbers either. Of course, there were also the school loans and about $20,000 in credit card debt on top of that.
And the IRS didn’t stop with his wife.
One day soon after, an IRS agent knocked on the door of his mother’s house. “We’re looking for your son,” she told his mother. His mom “freaked out,” he says. They also called his brother at his work.
Otero told them all not to worry. And he had reason to be optimistic. The $343 that came in on the Fourth of July had ballooned to nearly $1,000 a day by August. By the end of 2009, the game was generating nearly $5,000 a day.
By early 2010, Otero paid off his IRS debts in full, sold Mochii and was hiring more staff and lining up more games.
“If I was off by several months, it would have been catastrophic,” he says now. “If they would have put a lien on my assets, Superhero City would have never been released.”
After 30 failed products, Otero finally had a hit. He also finally had his own video game company.
He was 35.
The Long Journey Home
Back at 20th and J in December 2011, Otero walks into the offices of what is now BioWare Sacramento on this cold Friday night. The walls are covered with renderings of highly stylized otherworldly creatures from games they’ve released, like Age of Champions and Six Gun Galaxy. And the place is still buzzing with the mostly twenty-something programmers, designers, artists and engineers. There are more of them in just one of their many rooms now than the whole company had in 2009 when it squeezed eight guys into a tiny, 553-square-foot space atop a frozen yogurt shop less than three years ago.
KlickNation finished 2009 with eight employees. By the end of 2010, there were 42. By the end of 2011, it had 70, and now occupies a two-story, 11,000-square-foot building.
And to hear Otero describe it, the company that started out by imagining new life forms has, in many ways, become one itself. Asked about his management style, Otero says he tried to instill a culture of creativity and ideas and over time, it has morphed into something that even he could not have imagined when he created it. He expresses disbelief at what it has become in such a relatively short period of time.
“This organism itself is sentient and it determines what it wants to do,” he says, describing it almost like an alien that might appear in one of his games. “But it does good things. The culture is really strong. Everyone is happy, energetic and friendly. But also if you don’t fit the culture, this life form will spit you out. They’ll seek and destroy any type of foreign objects.”
In one room, a staffer is playing guitar, while another is throwing a Nerf dart at a skylight in a different room. Others are hand drawing mythical creatures on their touch-sensitive screens, while a human skull model and a Homer Simpson doll stand sentry on one of the desktops. It’s now about 7:30 on a Friday night, but they don’t seem to be in a rush to leave. For many of them, this is their home away from home, their family and their passion. In some ways, they’re the only ones of their kind here, far from the game design companies in Silicon Valley and the Bay Area.
And in several significant ways, all of their lives have changed in the last few weeks. Otero says that about 85 percent of the staffers are from this region, with the remainder being imports from the Bay Area and elsewhere. With the reported $35 million acquisition by EA, not only have many of them gained significant financial rewards, but they’re now playing at a level they never dreamed possible before at this stage in their careers, and certainly not here in Sacramento.
“People were cheering, some were crying,” Otero says of when he first delivered the news of the acquisition to the team. “It was very emotional. They wrote me letters saying this is a dream come true. I mean, c’mon, it’s BioWare. It’s epic.”
“It was really exciting,” says Aaron Nemoyten. “I don’t think any of us expected to get into the real part of the industry for a while because we felt like a start-up.”
Now, as BioWare Sacramento, this group joins a list of other BioWare “studios” around the world, including cities like Austin, Los Angeles, Montreal and even Galway, Ireland.
And as the GM of the Sacramento and San Francisco studios, part of Otero’s new job will be to travel to all of the studios, and to host teams from other studios here in Sacramento. “The cross-pollination of people and ideas has already begun,” he says.
That means the Sacramento studio will actually be growing, a fact confirmed by BioWare co-founder Ray Muzyka, the man whose company Otero admits to being nearly obsessed with in college when Baldur’s Gate came out. Muzyka remarks that he was not only impressed by the quality of KlickNation’s work, but also Otero’s passion and eloquence. “I think I have a lot to learn from Mark and his team,” he says.
In fact, EA’s purchase of KlickNation occurred at a time when the social gaming category has been booming with activity. EA, which has had tremendous success with monster console games like SimCity and Madden NFL, has been on a worldwide buying spree in the last few years, snapping up social media game makers in cities like London, Seattle and Melbourne, Australia.
And now Sacramento.
A recent article about the social media game feeding frenzy on the site TechCrunch explained that “EA is also taking a longer-term,
diversification view, showing that there’s demand for richer, more complex [Massive Multiplayer Online] gaming experiences, snatching up KlickNation in December.”
Not a bad endorsement.
But, the gaming industry aside, one of the most striking aspects of Otero’s reaction to his new paradigm is his enthusiasm for the potential impact on his hometown. “We brought one of the world’s largest game makers to Sacramento. If there’s one thing KlickNation will be remembered for, if there’s one little footnote in Wikipedia, it will be that we brought a heavyweight to Sacramento. And we can be very proud of that.”
As one of the chief business boosters for the region, Steven Currall, dean of the UC Davis Graduate School of Management, says the impact goes much deeper than just a handful of new jobs. “It’s so crucially important for young people to see Sacramento as a breeding ground for these kind of exciting start-up companies,” he says. “Mark is so valuable in the current economic circumstances as a role model to others.”
But right now, Otero is focused on returning to a familiar role—being a student. He’s been spending the majority of December and January in Redwood City, absorbing the language and culture of EA. His team is already hard at work on its first official game as BioWare Sacramento. And in his new role, he’ll be learning about and working in many different platforms that he’s never worked in before.
And sitting in the conference room chair in front of the framed Dungeons & Dragons covers, he marvels once again at the full-circle moment. “I feel like a part of my life has become complete,” he says. “Even my worst day is still my best day now. I feel like I’m home.”
Otero says that as he was driving back from Redwood City on this night, something extraordinary happened. With the convertible top down, Otero was listening to a song called “The NeverEnding Story” (from the movie of the same name) on his iPod.
“It was just surreal because that came out back when I used to play Dungeons & Dragons. So I just looked up at the stars and thought, ‘How did these stars align?’ It was an emotional moment for me,” he says. “I just feel like the luckiest guy in the world. And if things go as well as we hope they will go here, I think this is going to be another great story.”