Warner Bros has signalled its intention of expanding more aggressively into the video games industry with the acquisition of TT Games, the UK publisher of the LEGO Star Wars series which has sold 12m copies around the world.
The deal, for an undisclosed sum, will give Time Warner’s Hollywood studio a stronger in-house capacity for developing game spin-offs of its film franchises, but will also allow it to create video games which are unrelated to its movies.
“We’re very serious about building this [games business],” said Kevin Tsujihara, president of Warner’s Home Entertainment Group, adding that TT would be the “cornerstone” of its games plans. “There will be a number of pieces of the puzzle. This is an important piece but it’s not the whole puzzle.”
The deal comes as media groups are becoming increasingly interested in the video games business, as one of the few sectors to have shown consistent growth through a period when the growth of the internet has disrupted other media business models.
The TT Games acquisition follows September’s announcement of a multibillion-dollar partnership to develop an entertainment hub in Abu Dhabi, which included the creation of a $500m fund for video game development.
The transaction will secure a multi-million pound windfall for Jon Burton, TT Group’s controlling shareholder, who founded the company as Traveller’s Tales 18 years ago in the era of the Commodore Amiga and Sega Mega Drive.
The value of TT Games, based in Knutsford in Cheshire, had been estimated by one local newspaper at about £80m, making Mr Burton’s stake worth more than £60m.
The company’s family-friendly positioning was one reason for Warner’s attraction to TT Games, Mr Tsujihara said.
“TT Games is the leading video game developer for young gamers and their families,” he said, making it “a great match with our brands”, which would benefit from Warner’s global infrastructure.
TT Games is already developing its first title for Warner Bros, a LEGO Batman game, based on its Batman film franchise. It also develops for other studios, however, including Walt Disney and LucasArts, maker of the Star Wars films.
Warner Bros Interactive Entertainment, the games division created in 2004, will maintain its license agreements with other games companies such as Electronic Arts and Eidos, the group said.
TT Games was created in 2005 through the merger of Traveller’s Tales, one of the largest independent game developers, and Giant Interactive Entertainment, a games publisher started by LEGO.
It has sold over 12m copies of its two Star Wars titles, “LEGO Stars Wars: The Videogame” - published in 2005 - and “LEGO Star Wars 2: The Original Trilogy”, released in September 2006.
“After 18 years in the video games industry, the opportunity to become a meaningful part of the world’s leading entertainment company is the fulfillment of a dream,” Mr Burton said.
Source: FT
