Disney ramping up push into games market: CFO
|
|
|
By Gavin HaycockLONDON (Reuters) - Walt Disney Co. will triple the amount of money it spends developing video games to benefit from strong growth prospects in the global market, the entertainment company's chief financial officer said on Friday."We are ramping up our investment in video games ... It is a market where there is real opportunity," Disney's CFO Tom Staggs told journalists during a briefing in London.Part of the entertainment company's strategy centers on making sure hit products sell strongly across the business, irrespective of whether they start as a film, product or game.Disney spent around $100 million on gaming development last year and will spend $130 million this year."Over the next five years or so we are ramping up to about a pace of $350 million per year in video game investment, principally consoles and handhelds," Staggs said.Market researcher Screen Digest forecasts the particularly cyclical global gaming software market will be worth $21.3 billion in 2009, compared with $20.2 billion last year.However, a particularly fast-growing area is so-called massively multiple player online gaming (MMOG), which is expected to see subscription revenues jump from $875 million last year to $1.4 billion in 2009."The potential to make profits in that space if you have a hit game is significant," said Screen Digest gaming analyst Piers Harding-Rolls.Staggs said Disney created a "Pirates of the Caribbean" game to coincide with the release of the latest film, which became a hit across gaming platforms in the UK, France and Germany.Later this year, Disney plans to launch a multi-player online Pirates game in the U.S., then in the UK."We are early on in the process of developing a video gaming capability," Staggs said.Three months ago, Disney launched "Spectrobes," a role-playing game for Nintendo's <7974.OS> hand-held DS player produced by the company's Interactive Studios arm that has shipped about 700,000 units, Staggs said.The galactic action adventure game was developed for Disney by Japan-based Jupiter Corp."I am comfortable that it warrants a sequel in the games business. We would like to see video games become a vibrant creative venture," Staggs said.Disney has been positioning itself more aggressively in the gaming market over the past year, and late last year launched a games studio to focus on creating new and Disney-inspired titles for Nintendo's DS player and Wii console.Staggs said around 70 percent of development spend in video games in the near future would be on established content franchises, with the rest in areas where Disney hopes to create intellectual property it can exploit across the business.Mobile gaming applications were part of this, though this area was primarily being pursued "quite aggressively" within the company's Internet business, he said.Staggs said 90 percent of Disney's development efforts across gaming, including mobile, fall under the Disney brand.However, this is traditionally done on a license basis."It is not that we have no position in the market, it is that as a developer and publisher our activities have been very limited. But to the extent that we are successful in creating games as a publisher ... there is substantially more economic upside to the company," Staggs said.The CFO said Disney's gaming aspirations did not imply the company wanted to "go flying into the teeth" of competitors.Leading players in this area include Electronic Arts , the world's largest video game publisher, and Ubisoft , Europe's second-largest video games publisher."What we are doing is trying very deliberately to develop our core capabilities in video games content development, leveraging what already exists in the Disney brand," said Staggs.Disney already has a licensing partnership in its ESPN sports network with Electronic Arts to create video gaming sports titles."In the Disney-branded titles we thought we could maximize our success going it alone," Staggs said.Staggs said Disney was also exploring opportunities for gaming initiatives in virtual worlds such as Second Life."We can serve a real consumer desire to delve deeper into the worlds we create," he said, adding that such segments can play an important role in keeping users engaged in particular franchises over a sustained period of time.
(c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
|
|
|
|
|
|
Related News
Hershey, Nestle, sweeten war for Cadbury
Washington - Hershey and Nestle are expected to jump into the war over Cadbury sweets, media reports said Saturday, just weeks after the British-based stalwart rejected a hostile bid by US Kraft Inc. The growing market for chocolate in the developing...
US stock drop slightly on Dell profits, mixed for week
New York - Technology and energy shares pushed US stocks lower Friday, capping a mixed week for investors amid unease about the pace of the world's economic recovery. Tech stocks slid after a disappointing earnings report from computer giant Dell, wh...
GM: Opel restructuring plan by mid-December; cuts up to 25 per cent
Washington - US carmaker General Motors will present a new restructuring plan for its European operations by mid-December, Nick Reilly, the new head of GM Europe, wrote on his new blog Friday. While the details were still being hashed out, Reilly war...
US stock sell-off on fears of weak recovery
New York - US stocks followed global markets in a broad decline amid investor fears over the world's uneasy recovery from recession. Major US stock indices fell about 1 per cent on average, following hefty declines in the DJ Euro Stoxx 50 and Japan's...
US leading economic indicator gains 0.3 per cent
Washington - A key measure of US economic performance gained in October, according to a private research group Thursday, signalling that a broader recovery may be taking hold. The New York-based Conference Board's Leading Economic Index added 0.3 per...
US stocks fall slightly on technology earnings
New York - US stocks posted modest losses Wednesday on poor profit forecasts from technology firms and a surprising dip in home construction. Earnings from Salesforce.com and Autodesk were worse than expected. Other technology shares losing ground in...
Obama acknowledges danger of double-dip recession if deficit grows
Washington - President Barack Obama said Wednesday he was mindful of the dangers brought on by the country's skyrocketing budget deficit, warning that too much spending could lead the United States into another recession. Obama, who has taken heavy c...
|
|
|
|
|
|
|
|
