Hollywood Reporter
updated 4/19/2005 11:56:27 PM ET 2005-04-20T03:56:27

Buena Vista Games underscored its commitment to internal game development Tuesday by acquiring Avalanche Software and establishing a new startup game studio.

Late last year, BVG parent company Walt Disney Co. reported it had earmarked $40 million for developing its game business. Terms of Tuesday's deals were not disclosed, but Graham Hopper, Buena Vista Games senior vp and general manager, said that they totaled "well south of $50 million." BVG had $265 million of revenue in fiscal 2004 and plans to reach $536 million in fiscal 2006.

"The acquisition of Avalanche Software and the creation of a development studio in Vancouver mark a significant milestone in becoming a top-tier video game publisher by securing the industry's top talent to build and create game franchises," Hopper said.

Avalanche Software already has an established relationship with BVG because it is developing the video game counterparts to Walt Disney Pictures' "Chicken Little," due out in November.

The Salt Lake City-based video game developer perhaps is best known for "Tak and the Power of Juju," "Tak 2: The Staff of Dreams" and "Dragon Ball Z Sagas: Evolution." It also is nearing completion of "25 to Life," a new console online multiplayer shooter for Eidos.

Hopper cited the million-selling "Tak" franchise, which Avalanche created before partnering with THQ and Nickelodeon, as "one of the few successes in the children's intellectual property space."

Hopper also expects that advances in asset creation, animation and game technology will result in new opportunities both within BVG and between the company and its parent's other activities. "That's one thing we do better than anyone else," he said.

Avalanche Software will operate as a division of BVG and will maintain its development studio in Salt Lake City. In addition, a number of Avalanche Software's senior management and key employees have signed long-term employment agreements with BVG.

The startup studio BVG acquired is based in Vancouver and is led by senior development and business staff previously with Electronic Arts, Hopper said. Although it doesn't yet have a name, the team already is working on developing games for such next-generation platforms as Xbox 360 and PlayStation 3.

"In the game space, it's all about creative teams -- it's about finding creative people who can work together," Hopper said. "The Vancouver team have proven success, so it was a no-brainer."

Hopper added that the studio will focus on developing original intellectual property as well as BVG-owned content for the older core gamer consumer. He expects its first titles to reach the market in 2007.

BVG has several high-profile titles it will be showcasing at next month's E3 (Electronic Entertainment Expo), including "Tim Burton's The Nightmare Before Christmas," "The Chronicles of Narnia: The Lion, the Witch & the Wardrobe" and "Chicken Little."

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