Games People Play

Fun and games are serious business for Yale and Tina Brozen, owners of Chips & Bits Inc. and Strategy Plus Inc.

by Pip Vaughan-Hughes

Driving down Vermont 100, it's hard to believe this picture-postcard setting is home to an outpost of the New Technology. Were it not for tractor-trailers parked in the back yard, there would be no way of knowing that a modest, tree-shaded farmhouse near Hancock is the nerve center for Chips & Bits Inc., an operation that ships computer, video and board games all over the planet.

Yale and Tina Brozen started Chips & Bits in June 1990 after Hurricane Hugo put an end to their extended stay on the Caribbean island of Nevis. "It took the roof off our house," Yale remembers, "just like in 'The Wizard of Oz.'" They had plans to start an ecologically sensitive resort, but faced with homelessness on an island deprived of water or electricity for the foreseeable future, the couple decided to exchange the islands for the Green Mountains.

Yale and Tina Brozen leveraged a love of computer games into Chips & Bits Inc. in Rochester, one of the largest online distributors of games. The business complements their computer gaming magazine, Strategy Plus.

"My great-grandfather was from St. Johnsbury," says Tina, "and my grandfather lived in Gaysville, so I visited a lot as a child."

"We moved here in November," Yale recalls, "and it was very, very cold!"

Tina and Yale met "when we were 3 years old, in a children's swimming pool in France," says Yale, who spent "half my childhood there, half in Chicago." Tina's parents lived in Switzerland and the family spent vacations on the Cote d'Azure.

Yale attended Columbia University in New York, and then got a job in the city. "We met again and started dating," he says.

"I was working in the banking division of American Express," remembers Tina. Yale had entered the travel business; at 19 he started Access International.

"I began in Paris doing standbys on charter flights," he explains, "then moved back to New York. People would call about standbys. We'd say, 'Send us $20, and we'll put you on the list.' We'd meet them at the airport and try to get them on a flight.

"It was very high-stress," he says ruefully. "It wasn't unusual to get 200 people seats in one night, but on the other hand if you had 150 people waiting for seats and there were none, they'd be .. (furious), and they would yell at you because, of course, you weren't wearing a Pan Am uniform."

"I had friends who actually bought planes and ran charter flights," remembers Yale. "It was pretty scary: Some of them were so cheap that they would cut corners with safety." Yale dealt only in seats. He sold Access International in 1989.

Chips & Bits grew out of an interest shared by Tina and Yale. "Games were a hobby," Yale explains, "and I had been selling airline tickets by phone, so selling games by phone was pretty similar. The biggest difference was inventory," he continues. "In my old business, you had inventory, which were seats on airplanes and which ceased to exist the moment the plane took off. With games, we suddenly had to have a warehouse."

Nowadays, says Yale, "Tina mostly runs Chips & Bits -- the mail-order side and the accounting as well -- and I do the publishing and marketing side of things. For us, being a couple who work together isn't an issue," he continues. "We work in different buildings, for one thing. With any partnership you have to be careful to keep the roles straight and well-defined, and we've known each other a very long time. It's easy to keep things straight."

The couple admits the business could be located anywhere. So why Vermont? "At first we moved here because a house in Vermont with a roof was better than a roofless house on Nevis," admits Yale. "Why did we stay? Just look around," he says, his arm sweeping wide to embrace the snowy slopes of the Green Mountains. "Who wouldn't stay here?" Yale admits that although he's used to winter cold, "I live for the summer."

"I garden and ski," says Tina.

"What do I do for fun?" asks Yale, and answers himself happily: "Work, work and work."

Printing 300,000 copies a month, production director Ed Mitchell estimates Strategy Plus is the largest magazine published in Vermont. From left: Terri Davis, Mitchell, Bob Mayer, Denny Atkins and Alan Brush.

From modest beginnings as a mail-order/telephone-order operation, Chips & Bits has grown into the second-largest online distributor of games by traffic, behind Electronics Boutique. "We have about 50 employees. It used to be up around 70, but as our online business grew, we needed less people to answer the phones," says Yale. "We have a catalog, we advertise in magazines and online," he continues; "we have a telephone bank to take orders, but now most of our business comes in through e-commerce."

The company buys games from distributors and manufacturers, and sells them mainly to retail customers "but also to some stores," Yale says. "Forty percent of our business is outside the U.S., and that figure is increasing." Packages waiting to be sent from the Chips & Bits distribution center carry addresses in Australia, England and Hong Kong, to name a few. Turnover is quick. "We'll take a few hundred orders a day online," Yale says. "So far, our best day was 4,400 orders."

Computer and video games make up 80 percent of Chips & Bits' business; conventional games like Monopoly and role-playing titles like Dungeons & Dragons represent the rest. Most games have a shelf-life of between two and three months, after which their popularity begins to wane. Although for big titles, like Quake and Civilization, that might be considerably longer: up to three years.

"We have about 10,000 games here," says Tina, strolling between the packed shelves of the warehouse, where familiar products like Tomb Raider and Close Combat rub shoulders with more esoteric titles. "At the moment we're selling a lot of Unreal Tournament and Half-Life," says Tina. "We had a rush for Pokemon at Christmas, but that's over now."

The Pokemon phenomenon is regarded with some bemusement by the Brozens, who sell most things connected with the children's trading game. Why is it so successful? "I think it's because they created something that no adult will ever become fully involved in, because it isn't interesting enough for them," speculates Yale. "It's something that kids can have all to themselves."

They are ever aware of the transitory nature of such fads. "Last Christmas, the big craze was Legend of Zelda," says Tina. The company caters to every echelon of the gaming community. "These are Japanese games," says Tina, pointing to a shelf of brightly colored boxes. "They come direct from Japan, and everything is in Japanese. We sell them to the real hard-core fans who have to have a game before anyone else in the West."

"We carry every game," stresses Yale. "Whatever comes out, we have it." Interestingly, fewer than 1 percent of Chips & Bits customers are younger than 18. "That's partly down to who has control of the credit card," Yale explains.

In 1991 the Brozens bought a license for a British-owned computer gaming magazine, Strategy Plus. "The guy who was publishing it in the U.K. went out of business six months later, so we just took it over," Yale remembers. Today, Strategy Plus is a monthly publication, with a qualified paid circulation of 240,000 worldwide.

"I think that makes us the biggest magazine in Vermont," says Ed Mitchell, the magazine's production director. "We print about 300,000 copies monthly, and replicate roughly 110,000 CD-ROMs a month" for newsstand sales and special subscriptions. Based in Richmond, the magazine specializes in previews and reviews of computer games and hardware, as well as editorials and interviews with game creators.

Fewer than 1 percent of Chips and Bits customers are younger than 18. "That's partly down to who has control of the credit card," explains Yale Brozen. From left: Ryan Weber, Jon Desautels, Vicki Billings, Melissa Severy and Bruce Jones.

"We originally licensed the magazine just for advertising space," Yale says. "Now we're the third-biggest (in the U.S.) in our publishing niche, behind Computer Gaming World and PC Gamer," he adds, citing audit bureau statistics.

"And that's all independent," adds Liz Halgas, director of cdmag.com. "The other two magazines have big companies and deep pockets behind them." Now, it is the Brozens who license the magazine abroad, in Italian, Greek, and Portuguese for publication in Brazil. Strategy Plus is also online at www.cdmag.com. One of the advantages of the new technology is the ease with which it allows consumer statistics to be analyzed. "We have 2 million visits monthly from one million people," says Yale. "Each visit lasts an average of 10 minutes 44 seconds," he continues, "and each visitor reads 12 articles per visit."

"Yale has built a nice little gaming empire," says Halgas. "He's worked hard at keeping the companies apart, and creating a situation where each company can feed off the other from a distance. For instance, we can keep an eye on the pre-orders coming in to Chips & Bits, and see what's going to be hot."

The rural surroundings and farmhouse setting give a certain low-key air to the Brozens' hive of e-commerce, but appearances, in this case, are deceptive. At the end of 1999, Tina and Yale merged their businesses with theglobe.com, a NASDAQ-listed company whose primary business is building Web sites. "They have the 34th-largest site on the Web," says Yale, citing MediaMatrix. "We're about the 2,000th." Theglobe.com is a classic Internet success story. "It was started five years ago by two 21-year-old guys at Cornell University," says Yale. Now the company, based in Manhattan, employs approximately 250 people.

The merger, which awaits anti-trust approval to become final, means changes ahead for the Brozens' companies. "We'll have lots more resources," Yale explains. "They have a couple more game properties, happypuppy.com and gamesdomain.com, which they bought last year. That will grow the content business for us because we'll cross-link between sites."

The merger is opening new areas for the Brozens. "Theglobe also owns kidsdomain.com, which basically is designed for parents who want to buy educational and entertainment material for their kids. So we'll also be getting involved in that market." The combined businesses are set to make an impact. "It will be the biggest game property on line," Yale beams. "The plan is to grow the games division, and possibly to spin it off into a separate entity. It may go public."

"It's very exciting," says Mitchell. "Yale and Tina are finally getting the payoff from all the hard work they've done."

"I think theglobe.com are impressed with what Yale has done so far," says Halgas, "which is to appeal to the intelligent gamer who spends money. Computer games and the Internet are the perfect match," she continues. "The industry's growing like a little Hollywood."

"I certainly enjoy running my own business, so in five years' time I'll probably be working just as hard," says Yale. "I don't do it for the money; I do it because I like it." As for the computer gaming industry's future, "That depends on whether it remains interesting," he says, "and with the arrival of theglobe.com, it should be very, very interesting."

Pip Vaughan-Hughes is a free-lance writer who recently arrived in Vermont from London.