Disney to Buy Wideload

The Walt Disney Company (DIS) recently announced another venture in the video game business. The company’s interactive entertainment affiliate, Disney Interactive Media Group, has reached an agreement to acquire the Chicago-based videogame manufacturer Wideload Games. Terms of the agreement were not disclosed.

As part of the agreement, Alexander Seropian, founder and CEO of Wideload Games, will become Vice President of Creative at Disney Interactive Studios, and will report directly to Global Product Development Senior Vice President Jean-Marcel Nicolai.

Disney Interactive Studios develops and distributes a wide range of multi-platform video games, mobile games and interactive entertainment globally. The acquisition of Wideload Games will help it enhance its market share in the video game industry. Wideload Games is currently developing a family console game scheduled for release in 2010 from Disney.

This is the second consecutive acquisition announcement by Disney. Last week, Disney announced its plans to acquire Marvel Entertainment Inc. (MVL), creator of video-game friendly comic book characters, in a cash and stock deal of approximately $4 billion.

Media and Entertainment businesses are facing a slump in advertising demand as well as DVD sales, so they are venturing into the video game business, which has more growth potential. However, currently the video game industry, which has surged for a number of years, has finally been affected by the recession.

Nevertheless, we are of the view that the video game industry will regain its lost momentum once the economy rebounds. Studies have revealed that young consumers tend to spend more time playing video games.

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