The rise and fall of the company behind ‘Reader Rabbit’ and other games (2018)

I remember that time. I was at a (much smaller) completing company and I could tell every time TLC bought another educational software company by the little flood of resumes came in.<p>At first I thought they were just stupid (I was naive... “don’t they know their catalog will run dry if they aren’t refilling it with new titles?!?”).<p>Then with growing horror I realized they knew perfectly well, that their company sales numbers were shooting up while their costs were going down.<p>I thought the payoff would be to milk revenue from the back catalog for a few years until even that was no longer worth the effort.<p>But then there was the huge sale to Mattel. They’d found someone with billions of dollars to spend without the slightest idea how the business worked (or any business?). I still don’t know why it didn’t matter that the growth was due only to acquisitions and the cost cutting was due to halting new development (like losing weight by amputating your legs). I guess Mattel had a “Barbie” mindset where the popular properties keep producing steady revenue for decades? Still even something like Barbie gets constant updates.<p>One insight I have:<p>There’s no way the execs at Brøderbund and all those other companies didn’t understand what was going to happen when they sold themselves to “TLC” after they saw what happened to it. Those execs knew perfectly well they were selling out their employees and the future of the company. There were fat bonuses for the execs and sometimes smaller ones for managers when these deals went down so these people would profit personally while understanding what was going to happen to the future of their company and the people who worked for them.

Having watched Shark Tank for a long time, I always wondered if Kevin O&#x27;Leary just played a ruthless shark on the show or if he really was one. The article seems to confirm he is definitely the latter: &quot;He was the soulless businessperson who just came in and bought a bunch of companies and scaled them back and laid off all the good people.”<p>Moreover, he manages to sell TLC for $3.5 billion to Mattel, which is forced to sell it for just $27 million 18 months later. Of course, that was a poor decision by Mattel&#x27;s then CEO, considering she was warned not to do the deal: &quot;TLC was a “house of cards.” The business was boosting its revenue by purchasing new companies, but the significant acquisition costs weren’t reflected in their top-line earnings.&quot;<p>Interesting that another shark on the show - Mark Cuban - also became a billionaire by selling his company to Yahoo at its peak, and Yahoo then essentially shutting it down.

The Logical Adventure of the Zoombinis and Reader Rabbit are so nostalgic parts of my childhood. I so vividly remember trying to teach myself boolean logic at age 7 or 8 because of the &quot;boolies&quot;.<p>Turns out those games are actually on Steam!

&gt; At its peak in 1998, O’Leary sold TLC to Mattel for an astounding $3.5 billion — 4.5 times The Learning Company’s annual revenue.<p>This is a weird footnote because 4.5x price to sales is not that crazy above the market average of ~1.5 at the time of this acquisition. It would make sense for a growth industry in the midst of the Dot Com boom in 98. It&#x27;s certainly not crazy today, where companies trade at many times that (Pinterest trades at a 18x multiplier).<p>Great article by the way. I loved Rocky&#x27;s Boots.

I am too old to have had educational videogames as a child so I have always wondered if they actually were &quot;educational.&quot; Do people who played these games as a kid feel as if they actually learned something from them?<p>(Of course we can learn things from any game but I&#x27;m just wondering if people feel educational games were more educational than, say, Civilization)

What are the new edu game powerhouses? Minecraft comes to mind. Does it share the same age demographic as Zoombinis or Reader Rabbit?

It took me a lifetime to realize Reader Rabbit is a play on Peter Rabbit.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Peter_Rabbit" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Peter_Rabbit</a>

I grew up playing number munchers, but we had reader rabbit as well. Since I already knew how to read at that time, we just referred to reader rabbit as &quot;Evan&#x27;s game&quot; (my littlest brother). It seems, in my memory, like the computer was a source of wonder. The games were strangely austere and left a lot more room for my imagination to take over (kinda like the difference between reading a book and watching a movie). Miss those days!

My school had games from MECC like number munchers and word munchers rather than reader rabbit, but I see their fate was also being acquired by SoftKey in 95.

My school had Dave.

Not directly related to the content, but: This is the second text in a short time I see where there are animated separation lines between the paragraphs.<p>Is this some new trend? And am I the only one who finds this exceptionally irritating?

&gt; For his part, Buckleitner thinks this is too neat of an explanation.<p>&#x27;too neat an explanation&#x27;. &#x27;neat&#x27; is an adjective, so there&#x27;s no call for &#x27;of&#x27; here. It&#x27;s bad enough when people get this wrong in speech ...