From Deseret News archives:

Disney to buy video game company

Published: Thursday, Sept. 28, 2006 4:15 p.m. MDT
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Walt Disney Co.'s Buena Vista Games Inc. agreed to buy the maker of auto-racing video games "MotoGP" and "ATV Offroad Fury," extending an effort to increase the number of titles that Disney produces in-house.

Terms of the purchase of Brighton, England-based Climax Racing, a unit of Climax Group Ltd., weren't disclosed, Buena Vista Games General Manager Graham Hopper said in an interview. The price is similar to what Buena Vista paid for previous video game studios, "all sub-$50 million deals," he said.

Climax is the third video-game maker that Disney, based in Burbank, Calif., has bought or started in the past 18 months. Disney, the second-largest U.S. media company, has tripled the size of its video-game unit to about 600 employees in the past two years to produce more of its own titles that can appeal to children and adults, Hopper said.

"We have set a direction for ourselves to expand our presence in the game business and build strong brands," Hopper said. "We have the flexibility to buy or to build, depending on what makes sense to us."

Shares of Disney fell 11 cents to close at $30.93 Thursday on the New York Stock Exchange. The shares have gained 29 percent this year.

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In April 2005, Buena Vista bought Salt Lake-based Avalanche Software for undisclosed terms and established a start-up studio in Vancouver called Propaganda Games, led by former executives of Electronic Arts Canada. With the addition of Climax Racing, Disney hopes to produce between one and two new titles a year, Hopper said. The deal is expected to close in early October.

Climax Racing was founded in 2000 and employs 100 video-game artists, programmers and designers. Tony Beckwith, the studio's co-founder, will continue to run Climax Racing as vice president and general manager. The company will finish jobs it has under way before starting on Disney projects, Hopper said.

Disney is reducing its dependence on licensing deals with outside producers and developers, who currently make most of its video games, Hopper said. THQ Inc., for example, has the right to make video games based on the next four movies from Pixar animation studio.

In the next few years, Buena Vista Group wants to produce 80 percent of its games internally, and rely on outsiders for the remainder. Of the games it makes, Buena Vista Group wants 80 percent based on Disney movies, TV shows or other content, Hopper said.

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