A New Giant Enters B.C.'s Games Industry

Vancouver studio to help Disney drive its games business

Michael McCullough
Vancouver Sun

Wednesday, April 20, 2005

A Walt Disney Co. subsidiary announced Tuesday it is setting up a game development studio in Vancouver as the world's largest entertainment firm vies to become a top-tier video-game publisher.

The new, as-yet unnamed Vancouver studio will be headed up by four local industry veterans, all of whom left high-ranking jobs at Electronic Arts Inc. last year.

The new studio already boasts 20 employees and will ramp up to between 60 and 80 within a year, said vice-president and general manager Josh Holmes. That would place it among the top five gaming studios in the city.

The new venture was the brainchild of Holmes, the new studio's vice-president of operations Howard Donaldson, art director Daryl Anselmo and technical director Jorge Freitas.

While at Electronic Arts, Holmes, 31, led the development teams on the top-selling Def Jam and NBA Street franchises. Donaldson, 52, was EA Canada's chief financial officer for seven years and before that worked with Disney Interactive.

Seeking a "strong strategic partner" to meet the challenges of a new generation of gaming platforms expected to hit the market over the next two years, the group approached Disney subsidiary Buena Vista Games, which was known to be seeking a greater presence in the fast-growing electronic game market, Holmes said. To date, Buena Vista has largely licensed or contracted out the development of games based on Disney franchises to other publishers and independent developers.

The new studio, which has an action title in pre-production, is aimed at developing original and Buena Vista-owned content for the fast-growing adult gaming market. It will operate as a wholly owned subsidiary of Buena Vista.

"We're equivalent in games to the Miramax movie studio," Holmes said, referring to Disney's art-house film division for grown-up audiences.

In addition to the Vancouver startup, Buena Vista is buying Avalanche Software LC, a developer in Salt Lake City with more than 100 employees, the company said Tuesday. Avalanche creates its own titles such as Tak and the Power of Juju and Dragonball Z Sagas, as well as branded games such as Chicken Little, based on Disney's animated feature film premiering in November.

The two deals reflect a new strategy by Disney to take a leading role in the fastest-growing segment of the entertainment sector.

The world's largest entertainment company, Disney remains a bit player in video games. Buena Vista Games had sales of $265 million US in fiscal 2004, compared to $3 billion US for industry leader Electronic Arts. Nonetheless, it has a powerful distribution network and a vast library of content begging for adaptation into the interactive medium.

For years it has been linked to possible acquisitions of publishers such as Activision Inc. and THQ Inc., but has been deterred by prohibitive market values for these companies. In recent months, Disney switched its search to developers and/or growing its own gaming capacity from scratch.

The Vancouver start-up was attractive in that it came with a team that already had a "great track record" working together, said Buena Vista Games senior vice-president and general manager Graham Hopper. The company also wanted a presence in Vancouver, which has one of the industry's largest and deepest talent pools, he said.

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