August 20, 2001, 9:43 AM — The hype about Linux's potential as a desktop operating system started years ago. But just as easy-to-use interfaces are being crafted for the operating system, which has had a stronghold in the server arena for a number of years, troubles faced by some Linux companies lead observers to question whether it will ever truly compete with Windows for desktop dollars.
Loki Software Inc., a company that ports video games to Linux, filed for Chapter 11 bankruptcy protection two weeks ago. Eazel Inc., a company that had planned to create a new interface for Linux and had generated a good amount of buzz due to the inclusion of a number of the original designers of the MacOS on its team, dissolved in May [See "Eazel eases into the sunset," May 16]. In the face of user apathy, Dell Computer Corp. quietly decided to stop offering Linux as an operating system choice on its build-to-order systems. Developments like this have raised questions about the viability and future of Linux on the desktop.
Loki, which has ported such hit PC games to Linux as Quake III Arena, Railroad Tycoon 2, Deus Ex and Heavy Metal: F.A. K.K.2, filed for bankruptcy protection after taking on more debt than the three-year-old company could manage, said Scott Draeker, president of Loki. The Chapter 11 filing will allow the company to restructure its debt and continue with operations, Draeker said.
The PC game market, on any operating system, is a tough business, he said, comparing it to Hollywood.
As in Hollywood, "most of the products don't really do very well. Most of the business is driven by a few hits, a few blockbusters." And, also like Hollywood, the bigger game companies have enough money to write poor-selling games off and wait for hits, but smaller companies can't do the same, he added.
"A lot of development houses are started up all the time and a lot close down all the time," he said.
Draeker expects that Loki will have continued success, however, because the company has "a relatively small, but extremely loyal following" which has already caused a spike in sales and offered to set up funds to help the company out.
Loki's Chapter 11 filing is, in some ways, more than just the story of a struggling company, however. The company, after all, sells games -- one of the major categories of consumer desktop software. If a company that sells a consumer product for Linux can't find a large enough audience to thrive, what then is the future of the Linux as a generally used desktop OS?
Draeker thinks that future is solid, but is still far off.
One major challenge that Linux will face in the near term is that of retail penetration, he said. As long as Windows software continues to constitute the vast majority of what's available in stores, Linux will remain at a disadvantage, he said. However, as the operating system itself improves, so too will its commercial success, he said.