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'Capital Entertainment Group' Launched by Entertainment Software Veterans

by Rainier on May 10, 2002 @ 6:20 p.m. PDT

Capital Entertainment Group, Inc. (CEG) launched today as the computer and video game industry's first independently funded production company.

Headed by industry executives Eugene Mauro, J. Mark Hood, Kevin Bachus, and Seamus Blackley, CEG will foster creativity in the game industry by introducing innovative and professional methods of production management while reducing the financial risk of game production to both developers and publishers. With more than 40 years of combined industry experience, CEG's principals plan to produce games that excite consumers and reward their company's publishing and development partners.

"This company was founded on a desire to create truly ground-breaking games -- the sort of original but risky projects that otherwise would never get made," said Eugene Mauro, CEO and founder of Capital Entertainment Group. "Beyond financing game development, CEG brings support and discipline to the production process, freeing both developers and publishers to focus on what they do best. With our unique business model and funding, CEG has the patience and resources to develop innovative hit titles, and generate robust returns for our partners and investors."

To fund the development of its first several games, CEG has partnered with several groups to raise a production fund of between $40 and $50 million. Durlacher, Ltd., a leading London-based investment house is advising CEG on its European fundraising.

CEG also announced that SEGA(R) of America, Inc. plans to be the company's first publishing partner. One of the industry's leading content publisher's, SEGA(R) has plans to market and distribute CEG's first two products. Details on the partnership will be announced at a later date.

"Capital Entertainment Group brings an innovative approach to the development, production and publishing processes," said Peter Moore, president and COO, SEGA of America, Inc. "This unique new model will allow developers and publishers to focus on their respective strengths, which will ultimately benefit the industry."

CEG draws upon the talents of world-class entertainment software executives who are experienced in managing some of the most successful intellectual properties in the game market, as well as financing games and brokering deals with every major player in the industry. The company's management team has been involved in some of the game industry's most notable product launches, including Microsoft(R)'s Xbox(R) video game console. The group will use its collective experience to deliver products designed to take advantage of the capabilities afforded by today's leading video game console systems and personal computers.

At the core of CEG is a highly disciplined and revolutionary production model. This methodology includes the combination of line producers with creative producers to oversee a strategic plan that is designed to mitigate risk while pushing the envelope of creativity. By focusing on production in this manner, CEG can also augment the internal production resources of a developer through an extensive network of contractor resources. CEG will also support its products with grass-roots awareness campaigns to create consumer demand and to spur future, broad-scale marketing efforts organized by its publishing partners.


CEG's relationships are built on the principles of a proportionate return on investment between CEG and its investors, publishers, and developers.


CEG has established the first game industry fund that will allow investors to directly link their investments to specific intellectual properties. Investors assume a percentage of risk with a substantial upside on sales of CEG products. As CEG builds a stable of successful brands and franchises, investors will enjoy the relatively short and potentially high return associated with project financing.

Game Developers

By providing 100 percent development funding combined with supportive production management to game developers, CEG enables developers to bring their most innovative games to market in a creatively and financially rewarding way. CEG works with its development partners to bring their products to retail through marketing and distribution partnerships with the leading video and computer game publishers. With CEG, the developer has an opportunity to earn greater royalties and to do so much earlier than in the traditional model since the development budget is not an advance against royalties.


Working with CEG, publishers are able to add previously unattainable, high-quality entertainment products to their line-up without tapping their internal resources or production budgets. Publishers can then limit their out-of-pocket investment and downside risk to the costs of sales and marketing. As a result, funding decisions and financial exposure can be deferred until much later in the production cycle, at a point where the quality of the product, the efficiency of the development team, and the market reaction to the game can be demonstrated and measured. CEG is also able in some cases to work with publishers and mobilize idle intellectual properties by creating products and opportunities from archives of valuable franchises and licenses.

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