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Disney Profits Up, Game Division Renamed

The Walt Disney Company announced increased overall profits of $1.7 billion, despite revenue decline from Buena Vista Games. [UPDATE: Buena Vista Games to be renamed to Disney Interactive Studios, games to be published under brands including Disney
[UPDATE - 10.30am PST: Following yesterday's Disney results, Disney today announced the renaming of its video game business unit to Disney Interactive Studios at the company’s investor conference in Orlando. The business unit formerly known as Buena Vista Games will now be known as Disney Interactive Studios and will publish both Disney and non-Disney branded video games for all platforms worldwide. Video games will be published under the company’s strong consumer brands including Disney, ABC and Touchstone.] The Walt Disney Company, parent of video game publisher and developer Buena Vista Games, announced fiscal first quarter profits of $1.7 billion for the period ended December 30, up substantially from the $734 million reported a year ago, as revenues edged up slightly to $9.73 billion. Buena Vista Games falls under the company's Consumer Products division, which showed a moderate decrease from $733 million to $692 million compared to the previous year, as Disney officials explained: “The decrease in segment operating income for the quarter was primarily due to lower contractual minimum guarantee revenues and a decline in revenues from self-published titles at Buena Vista Games, partially offset by higher earned royalties across multiple licensing product categories, led by the strong performance of Cars and Pirates of the Caribbean merchandise.” However, Disney further added that the lower revenues from Buena Vista Games reflected the strength of titles sold the prior year, namely titles based on film properties The Chronicles of Narnia: The Lion, The Witch and The Wardrobe and Chicken Little. Buena Vista Games has itself maintained a significant presence within the video game industry, announcing several expansions in 2006 including the recent purchase of British developer Climax Racing, the recent acquisition of the Turok comic book license, and partnerships with Tetsuya Mizuguchi's Q Entertainment and Kingdom Hearts: Chain Of Memories developer Jupiter Corporation. In addition, the company also recently opened up a new development studio based in Salt Lake City, Fall Line Studio, dedicated solely to creating games for Nintendo platforms. "I am very pleased to report such strong quarterly earnings to kick off 2007," said Bob Iger, president and chief executive officer of The Walt Disney Company. "These results are particularly gratifying given the great year we had in 2006 and are another clear sign our strategy is driving growth and creating shareholder value."

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