In the late 1980s, a Texan twenty-something named Scott Miller created a business model that would change the way people bought and sold products across the world. Miller called his masterpiece the Apogee model. Everyone else called it shareware. It made digital sales on the internet stupendously profitable and Miller a millionaire. The model and the man would revolutionize how we use the internet — before most of the world knew what the internet was.
Young Scott Miller was sort of a loaf.
In high school in the early 1980s, the nerdy teenager would escape the Texas sun by programming lengthy text adventures in the campus computer lab. Here he met fellow budding designer George Broussard, a teenage boy with a penchant for wearing shorts. The two boys bonded over a mutual admiration for the facility's Apple II.
After graduation, Miller and Broussard took jobs at a local arcade called The Twilight Zone. Low-impact, the gig afforded Miller the time to attend college and the freedom to master the latest video games. Miller and Broussard competed daily to dominate the leaderboards on the smorgasbord of arcade cabinets.
Miller dropped out of the University of Dallas following his sophomore year and allowed video games to overgrow his life like weeds in a garden. On weekdays, he practiced at the arcade. On weekends, he competed at local game tournaments, earning a modest supplemental income and establishing a reputation amongst a small but tight-knit community of enthusiasts. In between, he'd code.
After Miller graduated high school, his parents moved back to Australia, where his father worked. Miller, who stayed in Texas, was living the fantasy of a young nerd from the comfort of his empty childhood home.
The original games press
Scott Miller wanted a bigger payday. He wanted a real purpose, so he decided to parlay his skills as an arcade operator and player into something tangible and mature: a book.
With Broussard's help, Miller penned a manual on how to beat video games — only to have the book published in a market supersaturated with similar game guides. The book's publication, however, netted Miller a weekly column at the Dallas Morning News. For four years, the young hobbyist penned reviews for the widely circulated paper, taking side work with a handful of niche game magazines. He received a modest fee, just enough to make a living.
At night, Miller continued programming.
After a few years, the professional critic had an epiphany of ego: He could create better games than those that came across his desk for review. And so began Scott Miller's career as a game developer and self-publisher.
"I remember Scott operating out of his parents' house," says longtime colleague Terry Nagy. "He was really proud of getting this 16.5k modem," which connected him to game designers across the world.
Miller initially hoped to release his games the traditional way: sign a contract with a publisher that could print, distribute and market games to be sold at brick-and-mortar retail outlets.
Most publishers ignored Miller's pitches; those that fielded them ultimately declined to contract the amateur designer. After all, he was a kid without a college degree or industry experience, known for being a critic, not a coder. Even in the 1980s, in the early days of game design, there was a line between those who made games and those who wrote about them.
Worse, Miller made ASCII based games — games that use letters, numbers and symbols for graphics — that didn't interest investors hungry for the next big thing. Publishers wanted a larger, more experienced team of designers working on something enticing, something that would grab the attention of the people fanning through the stacks of PC game magazines.
Miller considered self-publishing hard copies of his games, but knew the printing cost would be impractical, and he lacked even low-level contacts at distribution centers and retail chains.
"The universal wisdom was releasing games online won't make you money."
Another option existed, though Miller's colleagues urged him not to consider it. The developer could allow anyone to freely download his games off of bulletin board systems (a.k.a. BBS, a sort of proto-internet) and make voluntary donations.
At the time, this method was the understood definition of shareware software. Anyone could copy and distribute a shareware game at no cost.
For Miller, the shareware model would have to do.
Miller released two text adventures, Beyond the Titanic and Supernova. The games were well-received by the BBS community, but donations proved financially unreliable. (According to Miller, the games made less than $10,000 combined.)
At a financial tipping point, Miller left the paper and took a steady $30,000 a year full-time job as tech support at a computer consulting company.
On nights and weekends, he continued coding and cultivating contacts. Through BBS, Miller met a community of like-minded designers hoping to go pro. No one, he learned, made substantial money off the shareware donation model.
"The universal wisdom," says Miller, "was releasing games online won't make you money."
Miller's next game was a technical leap from his early text-adventures: Kingdom of Kroz, a 60-level ASCII-based adventure. A proud Miller couldn't bring himself to freely distribute Kroz as shareware. He chose to try a different strategy: his own.
Miller broke Kroz into three collections of levels, called episodes. He allowed the first episode to be downloaded for free through BBS. When a player finished that chunk, a screen appeared with Miller's mailing address. If the player wanted to finish the Kroz adventure, they'd need to send its creator a check.
The two remaining episodes, Caverns of Kroz and Dungeons of Kroz, could be purchased individually or together (with a slight discount). Buying the episodes also registered the product, allowing the player to contact customer support and also awarding them access to a variety of special cheat codes.
Miller began receiving on average $1,000 a week in checks.
Overnight, the amateur designer became a professional publisher. Every publishing company needs a name. Miller now calls the idea "marketing magic," but at the time he dubbed it "the Apogee model."
1. The point in the orbit of an object (as a satellite) orbiting the earth that is at the greatest distance from the center of the earth; also : the point farthest from a planet or a satellite (as the moon) reached by an object orbiting it
2. The farthest or highest point : culmination
The Apogee Model:
1. A distribution model in which the first part of a game is made freely available to entice players to purchase the rest. (Used today on everything from the App Store to Ouya.)
Mail was the worst way to field orders, but the newly minted entrepreneur couldn't handle telephone sales at the time, because he didn't have a company phone number.
In June 1990, Miller released another Kroz trilogy, and began earning roughly $2,000 a week. With checks stacking up on his living room table, Miller dropped his low-paying job at the computer consulting company and went full-time making games.
"I'm not even sure at the time [that I had] an 'aha' moment [for the Apogee model]," says Miller. "I just knew releasing games online wasn't working ... It just seemed reasonable to release an advertisement. I didn't have high expectations when I did it."
The next episode
If you listen to Miller, Broussard was always following his lead. As he puts it, Broussard didn't get truly serious with game development until he saw how much money Miller was making. And thus, Broussard founded his own company, Micro F/X.
The company's tagline: "Micro F/X Software, the leading edge of shareware games!"
Full-time wasn't enough time for Miller to be both a game developer and publisher. A year in, Miller asked Broussard to join Apogee Software Ltd. as a partner and co-owner, incorporating his confidant and Micro F/X.
Miller, who was was having his first house built, moved back in with his parents, who'd returned from Australia. One can imagine the early Apogee: Two grown men with, let's call them oversized personalities, discussing the future of their company, the medium, the world. When neither was around, Miller's mom handled the phone for customer support.
In 1991, Miller and Broussard rented an office space at 3960 Broadway Blvd. in Garland, TX. The first rental area was diminutive, but enough room for the two designers and a handful of employees to fulfill orders — at least at first.
Apogee expanded, rapidly. Soon the company had an automated number, 1-800-Apogee1, and 10 employees to handle support lines and ship software.
During the early years, the office operated like a factory, with most of the company's game development happening elsewhere across the country, funneling into Garland via the modems and BBS that had fostered Miller's initial success.
As the office grew, Miller realized that, though he could make a good living off game development, he could make an exceptional living off game publishing. Sure, he didn't have the traditional setup — packaging, shipping, retail — but he had the internet, the proven Apogee model and the improvisational spunk of a door-to-door salesman.
To find talent, the ambitious publisher made do with what he had: a stack of used game magazines. In the editorial and review pages, Miller found, poached and contracted up-and-coming talent like Todd Replogle to make games for the Apogee label. Replogle would later create the million dollar franchise Duke Nukem for Apogee.
But Miller also had one unresponsive white whale in the form of a young coder named John Romero.
A Keen idea
Romero was an employee of Softdisk, a monthly magazine that could be bought in stores and came packaged with a floppy disc full of software, some of which was designed by its staff of in-house coders. John Romero was one of them.
After months of writing Romero fan mail, under a variety of aliases, Miller finally received a response, and the two began speculating about what a partnership between the designer and Apogee might look like.
"I wish I had these letters," Miller says. "They'd be worth gold now."
Miller wished to contract John Romero and a number of his co-workers at Softdisk, including John Carmack, Adrian Carmack (no relation) and Tom Hall to independently develop games, which would be published via the internet through Apogee. Miller, who didn't have to worry about printing or distribution, offered a comparably huge percentage of the game's profits to Romero and the theoretical company.
The group, led by Carmack, had created a PC port of Super Mario Bros. 3, hitherto believed to be an impossible technical feat. Romero showed Miller the demonstration and the small-time publisher was stunned. He'd found the golden ticket, albeit a golden ticket protected by copyright law and a million dollar team of lawyers.
Apogee couldn't publish Mario 3, so Miller contracted the team to make something else, something similar. They called the project Commander Keen.
"I wish I had these letters. They'd be worth gold now."
"I gave them money to fund it," says Miller. "What they'd do is they'd work on it after hours, because they were working at Softdisk. It took them like five or six months to make. We released it. It did outstanding. They almost immediately quit their jobs."
Before Keen's release in December 1990, Apogee made roughly $7,000 monthly; after release, it made nearly $30,000 monthly. In February 1991, the development team began its departure from Softdisk, and formed the independent studio called id Software. Softdisk threatened litigation, claiming the id team had breached its contract, and so the group of men was required to produce a handful of additional games for Softdisk as contractors.
Miller was impressed by two of id's contractually mandated Softdisk games, Hovertank 3D and Catacombs 3D. Both honed the concept of a first-person shooter genre. Miller asked the id team to follow up its next Commander Keen game with a new first-person shooter. The result: Wolfenstein 3D.
"When you release a game," says Miller, "you don't know how it'll be received." Wolfenstein was the first widely published 3D shooter — Catacomb 3D had been limited to the distribution of Softdisk's magazine. The controls were difficult to learn. Some play testers were nauseated by the three-dimensional movement. What if people hated it?
Following the release of its first free episode, Wolfenstein made Apogee nearly $200k a month for a year and a half. Wolfenstein immediately legitimized the Apogee model.
In hindsight, Miller describes Wolfenstein as the perfect game for the Apogee model: something that felt like nothing else. It needed to be experienced to be understood, and once it was understood, its players would want more.
Apogee needed to provide more, but it would have to do so without id.
What's in a name
Following Wolfenstein, Miller traveled to San Francisco for the annual Game Developers Conference to recruit new developers and promote the Apogee brand.
Miller recalls EA executive Richard Hilleman — who helped create the Madden franchise — unexpectedly explaining Wolfenstein's success during a GDC lecture to a room of developers and publishers.
"The shareware model is the most honest model because of the try before you buy nature — you can't rely on marketing to sell a crappy game."
A group of young guys, Hilleman explained, had thrown a teaser demo online, and made millions of dollars. EA needed to pay attention. This model could take over the world.
Unfortunately for Miller, Apogee didn't — and couldn't — own the distribution model itself. The company merely owned the name, and even the name was losing mindshare: people didn't say Apogee model; they said shareware, the definition of which had changed to resemble Apogee's strategy.
Miller retained no ownership of his greatest creation because it was merely a strategy — the way a football team can't own a 4-3 defense.
Whether he knew it or not, Miller was at a crossroads: evolve the notion of digital distribution into something controllable, monetizable and patentable; or, press forward as a publisher, competing against other publishers and developers who could use same the distribution model.
Miller did the latter. For him it was never about the model. "It was always about the games," he says.
"The shareware model is the most honest model because of the try before you buy nature — you can't rely on marketing to sell a crappy game ... None of this could work if you make a bad game."
The unsustainability of the model as it existed became obvious quickly. Any developer or publisher could freely replicate it. And they did.
Miller's earliest rival lived in the same city.
Longtime friend George Broussard became an independent designer shortly after Miller, and the two immediately nurtured a friendly competitive spirit. Their original games were more like experiments, but in time both Miller and Broussard were coding full length text adventures — two grown men constantly trying to outdo the other.
Miller claims Broussard set a tone of secrecy, going so far to keep his code locked in a ratty briefcase.
Both Miller and Nagy recall days they'd spend trying to open the briefcase. In the late 1980s, the young men had a regular invitation to watch movies at Broussard's place, whether he was there or not.
Broussard often left his briefcase by his living room couch. And so time and again, while watching movies, Miller or Nagy would dangle one hand over the arm of the furniture, and quietly flip through the case's security dial.
One day, the briefcase opened.
Miller — a super spy in a t-shirt and acid washed jeans — snuck the unlocked trove of top secret code out of Broussard's place. (Broussard, Miller recalls, was somewhere else.)
Broussard's game, written in Turbo Pascal code, had been printed onto sheets of paper that Miller manually input into his computer. Miller claims he needed to fix bugs just to get Broussard's software to run, that it was unadvanced compared to his work at the time — a text-adventure called Supernova that Miller planned to distribute over the internet.
(Broussard didn't respond to interview requests.)
The developers at id Software chose to self-publish their next game, cribbing the method they'd learned from Miller and company. That game was DOOM, arguably one of the most culturally significant video games ever made.
"As far as I know, they were doing exactly what they'd learned from us. DOOM was marketed the exact way we'd been marketing things ... On their part, it was the right thing to do at the time, because they'd grown so much from Wolfenstein. At that point they knew exactly how to do it on their own and they had the financing to do it on their own. At that point, there really was no reason to work with anyone else."
Meanwhile, for the retail distribution of Wolfenstein, Apogee partnered with traditional publisher FormGen. With boxed games on store shelves, Apogee reached thousands, if not millions, of customers they weren't reaching on the internet.
Apogee had developed a 2D side-scroller named Duke Nukem, and found success — about $20,000 - $25,000 a month.
It was a profitable business decision, albeit one that further distinguished the company as something closer to a traditional publisher.
Apogee became less and less picky about the quality of the games it published online. The aggressive release strategy produced some hits (Death Rally) and many misses (Hocus Pocus, Wacky Wheels).
Because of the ease of digital distribution, those developers that achieved success had little reason to remain under the Apogee umbrella, leaving the publisher in a constant search for the next great developer.
The company, which had established itself through innovation, became more reactionary. Miller and Broussard decided to increase their investment in internal development, and shift the company's focus to 3D games, reacting to the success of id's Wolfenstein and their own Rise of the Triad.
Apogee had developed a 2D side-scroller named Duke Nukem, and found success — about $20,000 - $25,000 a month. So, it began development of a 3D follow-up, Duke Nukem 3D, under the 3D Realms banner.
In time the company ceased public use of its official name, Apogee, to escape its negative association with mid-tier software. It worked, for awhile. The 3D Realms brand would mark a second wave of success, beginning with Duke Nukem 3D's release in January 1996. Duke Nukem 3D sold 3.5 million copies and made Miller and Broussard stupendously wealthy.
In April 1997, Broussard announced the development of a sequel, Duke Nukem Forever, and set a release date for Christmas 1998. The game would take fourteen years to develop.
The team bet big on games over distribution. Despite the tremendous success of a few games in the late 1990s and early 2000s, like the multi-million dollar hit Max Payne, 3D Realms, née Apogee, went bust.
Back to basics
In 2009, Apogee filed for bankruptcy and began a multi-year process of selling and renting the rights to its catalogue of games. That same year, Apogee/3D Realms sold the rights and development responsibilities of Duke Nukem to Gearbox Software, which ultimately completed and released Duke Nukem Forever in 2011.
Teenage friend Terry Nagy, the longtime colleague of Broussard and Miller, had purchased the rights to the Apogee name in 2008, shortly before the company filed for bankruptcy, along with the rights to Rise of the Triad and a handful of other games. The Apogee that exists today is Apogee Software, LLC, not to be confused with the original company, Apogee Software, Ltd.
"I don't give a damn about the box."
The irony that Apogee sold off its name right when digital distribution was taking off isn't lost on Nagy. Nagy says fiberoptics started sprouting across the United States months after he'd acquired the Apogee name.
Miller, Nagy says, is involved with the company, but not in a decision making capacity. Miller has equity ownership, as does Broussard.
Today, Nagy has made a living by re-releasing the Duke Nukem games on handheld devices and through digital distribution storefronts like Steam. "With digital distribution games coming back gangbusters, download speeds and all that stuff ... people can download really huge games with little effort," he says. This summer, Nagy's Apogee published a revamped Rise of the Triad on Steam and other digital stores.
"I don't give a damn about the box," says Nagy.
Miller says Apogee is "definitely more intimate now," and that he likes being closer to where the rubber meets the road, that he loves helping new studios get off the ground.
"I kind of like the way things are now," says Miller. 3D Realms operates from his home with other employees operating remotely.
Miller does miss the lively environment of the old office, working side by side with friends. "People were always so passionate about what they wanted to do. But nowadays that's a tough model to maintain."
3D Realms is much lower risk. No giant staff. No office expenses. It's focused on licensing and outsourcing several games at a time.
"We have some original things cooking right now," says Miller from his quiet home deep in the heart of Texas.
Images: 3D Realms, Hardcore Gaming 101, Terry Nagy
Editing: Russ Pitts, Matt Leone
Design / Layout: Warren Schultheis, Matthew Sullivan