Disney. The name rolls off the tongue like soft sweet chocolate. Certainly the Walt Disney Co. is America’s best-loved brand, strong enough to stretch the franchise into everything from a cruise line to a baseball team. Yet the Magic Kingdom has extended its borders very effectively to computers. Sure, Disney has produced dozens of software tides, but the quality of most was closer to the movie studio’s somnambulistic “One of Our Dinosaurs is Missing” than the sonorous “Sleeping Beauty.”
But Sleeping Beauty is starting to stir–and the influence on the PC edutainment market could be more enchanting than the kiss of a prince. Over the last six months, Disney has started an ambitious and growing interactive division, tapped its muscular home video sales network to sell software, and taken steps to ensure that the company’s rich talent pool of animators and ride designers also work on multimedia titles. Next year Disney will start pumping out up to 50 titles a year. oOur charter is to take Disney’s strength in animation, story telling, and character development into the new interactive media,” says Steve Fields, senior vice president of edutainment and multimedia for Disney Interactive. The goal: $1 billion in annual sales in five years.
That’s no Mickey Mouse matter. Disney would be a major player in consumer software and a major competitor to such family-oriented software makers as Broderbund, Davidson & Associates, and The Learning Company. But Disney could be much, much more: the force that legitimizes game and entertainment software in mass-market channels: They are going to be the bulldozer that pushes software into supermarkets and drug stores, and companies like Broderbund will ride alongside,” says Broderbund spokesman Eric Winkler.
Unlike Disney films, however, a happy ending is not guaranteed. For one thing, Disney periodically announces plans to get serious about interactive entertainment, but then nothing much happens. Sure, Disney knows how to tell a linear story, but can it create interactive adventures? Since many of its titles are tied increasingly to movies, stumbles on the big screen will dampen sales on the small one. There is also a PR problem: former employees say the company played Cruella De Vil with them, a reputation that some say is now hurting Disney as it tries to recruit top talent. Says a former employee: “They’ve managed to upset so many people that no one wants to work there.”
Nevertheless, it now appears that Disney gets it. In December it formed Disney Interactive by merging the old software division with the formidable Walt Disney Television and Telecommunications division, the umbrella over film, animation, home-video, and theme-park groups. That merger already is making it easier for the software group to draw on local talent for titles such as the upcoming “Pocahontas” products. DI is staffing up quickly. Head count will increase from 125 last year to 400 in 1996, the company says. It’s taking steps to beef up its technology, too. In February, for example, it licensed three-dimensional rendering software from Argonaut Technologies Ltd.
That’s not all. Disney is augmenting its software sales force with the company’s Buena Vista Home video distribution network. That will result in more sales through mass merchants like KMart, WalMart and Target, where 30 percent of Disney software sales now occur. “Over the next two to three years we will expand into additional channels, which could include grocery stores, drug stores, and specialty toy stores,” says Steve McBeth, Disney Interactive’s president.
Full of Character
Disney’s key assets, however, are its characters. And there will be plenty of them populating hundreds of thousands of PCs this year. Six multiplatform titles will be released through Christmas including a screen saver, education title and action game, all derived from the animated feature “Pocahontas,” to be released June 23. Other titles include “Winnie the Pooh’ and a new “The Lion King.” Expect a Halloween release for “Gargoyles,” a TV show spin-off. Early next year, look for “Disney’s Animated Storybook: Toy Story” based around the upcoming Tim Allen Christmas animation; “Maui Mallard,” featuring Donald duck, and “Pinocchio: The Video Game.”
Family edutainment won’t be the company’s only playground. It is planning a line of reference works and, in 1997, will release core curriculum titles for home and school. Company officials will not talk about either initiative yet.
Disney doesn’t break out its software sales, but they are part of the consumer products division that grew 27 percent, to $1.8 billion, in the fiscal year ended Sept. 30. For the first half of the current fiscal year, consumer sales jumped 24 percent, to $1.15 billion. Disney earned $1.1 billion on sales of $10 billion, up 18 percent in 1994.
The software potential, of course, is just enormous. According to Link Resources, interactive entertainment revenues totaled $8 billion last year–compared to $7 billion in movie revenues. The market is expected to jump to $23.5 billion in 1999, predicts Link. To understand why DI is tying so much of its software strategy to movies, take a look at “The Lion King” phenomena. The movie grossed $740 million at the box office–and the kicked out another $1 billion at retail counters via sales of the soundtrack, books, and of course, software (400,000 “The Lion King” programs have been shipped so far). Where other software developers pay up to secure bankable licenses like “Star TreK” and “Power Rangers”, Disney is the Fort Knox of golden properties. “I have to take seriously any company who can start with the most endearing, recognizable characters known to American entertainment,” says Suzie O’Hair, director of product marketing for the children’s division at Sanctuary Woods.
Cuddly content is only one thing working in Disney’s favor. The technology curve is another. Only today are families putting enough computing horsepower on their desks to take advantage of the company’s rich graphics and animation capabilities.
And here’s some real potential power. For the first time, Disney is harnessing the Imagineering team, the creative force that designs its thrilling theme-park rides.
The Walt Disney Imagineering Virtual Reality Studio, which built Aladdin’s Magic Carpet exhibit at Walt Disney World, is helping develop a home version slated for 1996. Players will don a virtual reality headset, then mount a flying carpet to search for Aladdin’s magic lamp. Additional Imagineering-related plans haven’t been announced, but expect other Disney rides to get the home VR treatment if “Aladdin” takes off. “I don’t think most game companies understand 3-D, and that’s a perspective that Imagineering will bring to Disney’s interactive,” says Tom Garland, director of strategic alliances for Silicon Studio, a subsidiary of Silicon Graphics Inc., and a Disney partner.
Until now, Disney has been a presence in the industry, but not much of a force. Walt Disney Computer Software Inc., formed in 1988, released 77 titles through last Christmas, but only a few–“Mickey’s 1 2 3’s,” “Donald’s Alphabet Chase,” “Who Framed Roger Rabbit?”–were hits. And even those weren’t megahits. For a company with the resources of Disney, the track record was poor. “Disney was constantly shooting itself in the foot, snatching defeat from the jaws of victory,” says David Kock, a former Disney software exec who left last year.
Here’s just one reason why. Disney’s incredible wealth of in-house talent, such as some of the world’s great animators, rarely contributed to the software products. In part that was because executives, including Chairman Mich’l Eisner, Winnie Pooh-Pooed interactive entertainment. So when Disney producers wanted an in-house artist, they didn’t get much of a price break. “I couldn’t use [Disney's] feature animation because of their high rates, so we used animation from Japan, Canada, local free-lancers, whoever we could get cheap,” says former Senior Producer Sam Palahnuk.
Corporate inertia dragged out the approval process so long that titles employed trailing-edge technology and appeared long after the movies on which they were based had played out, observers say.
Even Aladdin’s big blue genie may not have enough wishes to make Disney’s software fantasies reality. Under former software general manager Shelley Miles, the division developed original titles as well as licensed Disney properties. McBeth is focusing DI on the latter. If the movie company again loses touch with the consumer, the software group could take a box office hit, too. And there is no guarantee that a hit movie translates into hit software. “How do you turn “Pocahontas” into an action title?” asks a former employee.
There are a lot of former Disney Software employees, in fact, and that is also a problem. Disney has lost a lot of talent over the years, including Kock, who now is vice president of interactive development for Saban Entertainment; Sam Poole, now president of Maxis; Noah Dudley, director of interactive licensing at MCA Universal; and Miles, president of USAnimation.
Happy Endings? You can find ex-workers spread through the industry, many complaining of corporate infighting, ever-shifting strategies, severe penny pinching, low morale, and an “us vs. them” mentality between the software group and other parts of Disney. “I was pulled into an office once [by a Disney exec] and told, ‘You people from the software industry are useless–I’ll take Disney people to create software,'” says Kock. But McBeth retorts he is having no problem signing up talent. “What excites people today is that companies like Disney have a tremendous future in this media. They’re excited about leading development of the category,” he says.
Other former workers and partners aren’t as quick to criticize. ” will always look back on my three and a half years there with a good feeling,” says Kirk Green, now in PR with Interplay Productions Inc. He says one source of friction could be that Disney didn’t understand how software companies work, while disgruntled software employees may have become frustrated in a studio environment. At Berkeley Systems Inc., maker of a megahit Disney character screen saver, the working relationship has been fine. “We couldn’t have made such a strong product without their cooperation. They’ve been extremely professional,” says Senior Producer Maury Zeff.
Beauty or beast, one thing is clear. Disney is starting to make an impact as never before. At the recent E3 trade show in Hollywood, for example, visitors to the Disney Interactive booth were shoulder-to-shoulder to get glimpses of upcoming titles. Disney’s influence on the industry isn’t confined to software. At its Innoventions Showcase at Walt Disney World’s EPCOT Center, Disney helps companies, including AT&T, Apple, IBM, Oracle, and Sega, test new technology with “uests.” It is a co-publisher with Ziff-Davis Publishing Co. (publisher of PC Week) of FamilyPC. In February, Walt Disney announced an alliance with BellSouth Corp., Ameritech and SBC Communications Inc. This consortium plans to invest %500 million into interactive programming.
Will Disney finally exploit its heritage on the interactive front? Computer Gaming World Editor Johnny Wilson is grumpy about the prospects. “Five years ago I thought they were going to be a leader, but now I think they never will be,” he harumphs. But if anyone can make money from Never-Never Land, it’s Disney.