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Disney gets into the game
Entertainment giant acquires a Utah video-game company and launches a new venture in Canada.
By Richard Verrier | Sentinel Staff Writer
Posted April 20, 2005
After failing to run up a score in the 1990s, Walt Disney Co. is again vying to be a video gamer.
On Tuesday, Disney announced it gained a toehold in the business by acquiring a small video-game developer, Avalanche Software, and launching a new venture in Vancouver, British Columbia.
Disney officials pegged the total investment at less than $50 million, a relatively small outlay for the multibillion-dollar entertainment giant.
The deals signal Disney's latest efforts to cash on the burgeoning video-gaming business.
Disney and other movie studios poured millions into developing video games in the 1980s and 1990s only to discover how difficult it was to compete as outsiders.
Studios are beginning to show renewed interest in the business. Disney has been cautiously moving back into developing games in-house, rather than relying solely on licensing its characters.
Salt Lake City-based Avalanche, which was founded in 1995 and employs more than 100 artists and programmers, will make video games based on Disney movies such as the upcoming animated film Chicken Little.
The Vancouver start-up will create adult-oriented games. It will be led by a team of former Electronic Arts Inc. staffers who helped create such hard-core fare as Def Jam.
The deal was closely watched in Central Florida, where Electronic Arts' Tiburon unit is based. The company, which is based in Redwood City, Calif., is working with the University of Central Florida to develop a graduate-level program in video-game development.
Tuesday's announcement represents a modest step compared to an acquisition of a major game company such as Activision Inc., which Disney had considered before concluding it was too expensive to buy.
Nonetheless, Graham Hopper, senior vice president and general manager of Disney's Buena Vista Games, said the moves mark a "significant milestone in becoming a top tier video-game publisher."
In an interview, Hopper said Disney had learned important lessons from the missteps of the past, including the importance of hiring top talent and controlling spending.
"This is less risky than it was then because there's better management processes now and it's more clear now what works or doesn't work,"' Hopper said.
Disney expects video-game revenues to reach $500 million by 2006, but faces some tough competition.
Avalanche, whose game credits include Tak and the Power of Juju and Dragonball Z: Sagas, is a relatively small industry player.
"This is clearly a growth opportunity for Disney," said Richard Greenfield, a media analyst with Fulcrum Global Partners. "The question becomes: How much time do you want to invest in building production for video games versus licensing the great content to people who do it better than anyone else?"
Richard Verrier can be reached at richard.verrier@latimes.com or 1-800-528-4637, Ext. 77936.
Entertainment giant acquires a Utah video-game company and launches a new venture in Canada.
By Richard Verrier | Sentinel Staff Writer
Posted April 20, 2005
After failing to run up a score in the 1990s, Walt Disney Co. is again vying to be a video gamer.
On Tuesday, Disney announced it gained a toehold in the business by acquiring a small video-game developer, Avalanche Software, and launching a new venture in Vancouver, British Columbia.
Disney officials pegged the total investment at less than $50 million, a relatively small outlay for the multibillion-dollar entertainment giant.
The deals signal Disney's latest efforts to cash on the burgeoning video-gaming business.
Disney and other movie studios poured millions into developing video games in the 1980s and 1990s only to discover how difficult it was to compete as outsiders.
Studios are beginning to show renewed interest in the business. Disney has been cautiously moving back into developing games in-house, rather than relying solely on licensing its characters.
Salt Lake City-based Avalanche, which was founded in 1995 and employs more than 100 artists and programmers, will make video games based on Disney movies such as the upcoming animated film Chicken Little.
The Vancouver start-up will create adult-oriented games. It will be led by a team of former Electronic Arts Inc. staffers who helped create such hard-core fare as Def Jam.
The deal was closely watched in Central Florida, where Electronic Arts' Tiburon unit is based. The company, which is based in Redwood City, Calif., is working with the University of Central Florida to develop a graduate-level program in video-game development.
Tuesday's announcement represents a modest step compared to an acquisition of a major game company such as Activision Inc., which Disney had considered before concluding it was too expensive to buy.
Nonetheless, Graham Hopper, senior vice president and general manager of Disney's Buena Vista Games, said the moves mark a "significant milestone in becoming a top tier video-game publisher."
In an interview, Hopper said Disney had learned important lessons from the missteps of the past, including the importance of hiring top talent and controlling spending.
"This is less risky than it was then because there's better management processes now and it's more clear now what works or doesn't work,"' Hopper said.
Disney expects video-game revenues to reach $500 million by 2006, but faces some tough competition.
Avalanche, whose game credits include Tak and the Power of Juju and Dragonball Z: Sagas, is a relatively small industry player.
"This is clearly a growth opportunity for Disney," said Richard Greenfield, a media analyst with Fulcrum Global Partners. "The question becomes: How much time do you want to invest in building production for video games versus licensing the great content to people who do it better than anyone else?"
Richard Verrier can be reached at richard.verrier@latimes.com or 1-800-528-4637, Ext. 77936.
