Disney ramping up push into games market: CFO

By Gavin Haycock

LONDON (Reuters) - Walt Disney Co. (DIS.N) will triple the amount of money it spends developing video games to benefit from strong growth prospects in the global market, the entertainment company's chief financial officer said on Friday.

"We are ramping up our investment in video games ... It is a market where there is real opportunity," Disney's CFO Tom Staggs told journalists during a briefing in London.

Part of the entertainment company's strategy centers on making sure hit products sell strongly across the business, irrespective of whether they start as a film, product or game.

Disney spent around $100 million on gaming development last year and will spend $130 million this year.

"Over the next five years or so we are ramping up to about a pace of $350 million per year in video game investment, principally consoles and handhelds," Staggs said.

Market researcher Screen Digest forecasts the particularly cyclical global gaming software market will be worth $21.3 billion in 2009, compared with $20.2 billion last year.

However, a particularly fast-growing area is so-called massively multiple player online gaming (MMOG), which is expected to see subscription revenues jump from $875 million last year to $1.4 billion in 2009.

"The potential to make profits in that space if you have a hit game is significant," said Screen Digest gaming analyst Piers Harding-Rolls.

Staggs said Disney created a "Pirates of the Caribbean" game to coincide with the release of the latest film, which became a hit across gaming platforms in the UK, France and Germany.

Later this year, Disney plans to launch a multi-player online Pirates game in the U.S., then in the UK.

"We are early on in the process of developing a video gaming capability," Staggs said.

Three months ago, Disney launched "Spectrobes", a role-playing game for Nintendo's (7974.OS) hand-held DS player produced by the company's Interactive Studios arm that has shipped about 700,000 units, Staggs said.

The galactic action adventure game was developed for Disney by Japan-based Jupiter Corp.

"I am comfortable that it warrants a sequel in the games business. We would like to see video games become a vibrant creative venture," Staggs said.

Disney has been positioning itself more aggressively in the gaming market over the past year, and late last year launched a games studio to focus on creating new and Disney-inspired titles for Nintendo's DS player and Wii console.