Origins and signing of partnerships
In 1993, Bertelsmann Music Group entered into the interactive entertainment industry by signing a deal with Ion to produce music and multimedia entertainment products, including video games. In 1994, Bertelsmann Music Group signed a deal with Crystal Dynamics to distribute titles, received funding to the game publisher Rocket Science Games, and later the company founded BMG Interactive Entertainment. It was led by Sam Houser.
The company's original plan was to license titles from third-party US publishers for the European market, most notably games published in North America by Rocket Science Games. In late 1994, the company signed a deal with Nederlander Communications, and Israeli-based production firm Pixel Multimedia to form a joint venture company RealTime Sports. The company later expanded into the Japanese market in late 1994 around the same time the company was founded.
In late 1994, Strauss Zelnick, the former head of Crystal Dynamics, joined the company to serve as operations for the North American business. The company expanded by running a San Francisco office, led by Don Traeger of Electronic Arts, and a European division, in addition to the New York office. In 1995, the company signed a deal with Boss Game Studios for the development of its titles.
in 1995, the company signed a development deal with DMA Design, where BMG could publish DMA Design's titles. The publishing agreement with BMG Interactive covered Race'n'Chase, Space Station Silicon Valley, Tanktics, and the stealth game Covert. In 1996, the company entered into the sports gaming industry by signing a partnership with game developer Z-Axis for the development of its titles. Also that year, the company signed a deal with Major League Soccer to endorse a soccer game for development by Z-Axis.
By the point, the company became the largest publisher of European video games, with partnerships involving Berkeley Systems, Boss Game Studios, Crystal Dynamics, DMA Design, Interactive Studios, Lobotomy Software, Montparnasse Multimedia, New Level Software, Virtual Music Productions, Z-Axis, Zombie Studios and others. In 1997, the company shipped its first North American game, Spider: The Video Game, to stores. The company attempted to start a US office in 1997, but it was never materialized.
Closure of operations and sale
In 1997, BMG Interactive announced that it had shuttered its U.S. operations after the commercial failure of games like Spider: The Video Game, leaving the future of the games planned for U.S. release, like Space Station Silicon Valley, Spec Ops, Major League Soccer, Mass Destruction, Grand Theft Auto and Courier Crisis in limbo. In late 1997 and early 1998, the company sold the publishing rights of Mass Destruction and Grand Theft Auto to ASC Games, Spec Ops to Ripcord Games, a basketball game to Fox Interactive, Dragon Blade to an unspecified publisher (later revealed to be Gathering of Developers), a flight simulator to Electronic Arts under Jane's Combat Simulations, Spearhead to Interactive Magic, and Courier Crisis to GT Interactive.
On March 12, 1998, Take-Two Interactive announced its acquisition of the assets of dormant British video game publisher BMG Interactive from BMG Entertainment (a unit of Bertelsmann). In exchange, Take-Two was to issue 1.85 million shares (around 16%) of its common stock to BMG Entertainment. Through this acquisition, Take-Two obtained several of BMG Interactive's former intellectual properties, including Three Lions, Monkey Hero, Biosys and DMA Design's Grand Theft Auto and Space Station Silicon Valley. The deal was announced to have closed on March 25. Three BMG Interactive executives—Dan Houser, Sam Houser, and Jamie King—as well as Gary Foreman of BMG Interactive and Terry Donovan of BMG Entertainment's Arista Records record label, subsequently moved to New York City to work for Take-Two Interactive. In a restructuring announced that April, Sam Houser was appointed as Take-Two's "vice president of worldwide product development". In December 1998, the Houser brothers, Donovan and King established Rockstar Games as the "high-end" publishing label of Take-Two and as a successor to BMG. The formation was formally announced on January 22, 1999.
