From Deseret News archives:
Disney to create games at Salt Lake plant
The studio, called Fall Line, will be based in Salt Lake and run by Scott Novis, who led the team that created the game based on the Pixar film "Cars." Novis' designers will build games for the Nintendo Wii console to be released this month and the DS and Game Boy handheld players.
Chief Executive Officer Robert Iger said in September that Disney can earn more by developing its own games rather than licensing characters and content. Disney has spent $200 million in the past two years to buy or start game-development studios. The company, based in Burbank, Calif., will spend another $200 million in the next two years, said Graham Hopper, general manager of Disney's Buena Vista Games.
"Disney is naturally set up for video games," said Imran Khan, an analyst with JPMorgan Chase & Co. "It makes sense because of their characters and their content, and because they already have a strong consumer product group, which others like Time Warner and Paramount don't."
Shares of Disney rose 39 cents to close at $32.85 Tuesday on the New York Stock Exchange. They have gained 37 percent this year and are trading at their highest since May 2001.
Fall Line is the fourth game developer Disney has bought or started in the past 19 months. The company has more than tripled its video-game payroll to 600 employees.
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. In September, the company purchased Brighton, England-based Climax Racing, maker of auto-racing games "MotoGP" and "ATV Offroad Fury," for undisclosed terms.
Khan expects Disney to rely less on licensing agreements, such as the accord with publisher THQ Inc. it inherited with the $8.06 billion purchase of Pixar in May. THQ, based in Agoura Hills, Calif., has game rights to the next four Pixar films.
"They are building the capability to do these games on their own," said Khan, who rates the shares "overweight" and doesn't own them.
Disney is releasing a second "Chicken Little" video game for Nintendo's Wii around the same time the console is expected to go on sale this month.
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