AFI BLOG: Media and Technology

Big Media Companies Want Back in the Game - The Wall Street Journal

Disney, Viacom and Others Take Videogames In-House, Seeking Cut of Hot Market

In Pixar’s coming movie “Toy Story 3,” Woody the cowboy and his toy-box friends are dumped in a day-care center after their owner, Andy, leaves for college.

Behind the scenes, Pixar’s longtime videogame partner THQ Inc., which made the games based on the Walt Disney Co. studio’s “Ratatouille” and “Cars” movies, has been having abandonment issues of its own. Disney and its Pixar animation studio recently turned down a pitch from the Agoura Hills, Calif.-based publisher to create the game version of “Toy Story 3,” opting instead to make it in-house.

With renewed zeal, traditional media companies have begun building their own videogame businesses again. For years, they outsourced development of games based on their television shows and movies in licensing deals with big games publishers. Now, the media companies want a bigger piece of the fast-expanding games business for themselves.

They see the videogame business as an opportunity for significant growth, especially compared to their more mature, traditional businesses such as television and movies. Box office revenue inched 4.0% higher last year, in large part because of ticket price increases, while home-video sales declined 3.2%, according to Adams Media Research. In contrast, videogames are the fastest growing sector of entertainment, with sales in the U.S. rising 34% last year to $8.64 billion, according to NPD Group Inc.

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