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Nov. 7 (Bloomberg) -- Walt Disney Co., the world's second- largest media company, is creating a video-game studio to make titles exclusively for Nintendo Co., targeting audiences for its animated characters.

The studio, called Fall Line, will be based in Salt Lake City and run by Scott Novis, who led the team that created the game based on the Pixar film ``Cars.'' Novis's designers will build games for the Nintendo ``Wii'' console to be released this month and the ``DS'' and ``Game Boy'' handheld players.

Chief Executive Officer Robert Iger said in September that Disney can earn more by developing its own games rather than licensing characters and content. Disney has spent $200 million in the past two years to buy or start game-development studios. The Burbank, California-based company will spend another $200 million in the next two years, said Graham Hopper, general manager of Disney's Buena Vista Games.

``Disney is naturally set up for video games,'' said Imran Khan, an analyst with JPMorgan Chase & Co. ``It makes sense because of their characters and their content, and because they already have a strong consumer product group, which others like Time Warner and Paramount don't.''

Shares of Disney rose 57 cents to $32.46 yesterday in New York Stock Exchange composite trading. They have gained 35 percent this year.

Buena Vista wants to produce 80 percent of its games internally, Hopper said. Of the games it makes, Buena Vista wants 80 percent based on Disney movies, TV shows or other content.

Fourth Studio

Fall Line is the fourth game developer Disney has bought or started in the past 19 months. The company has more than tripled its video-game payroll to 600 employees.

In April 2005, Buena Vista bought Salt Lake City-based Avalanche Software for undisclosed terms and established a start- up studio in Vancouver called Propaganda Games, led by former executives of Electronic Arts Canada. In September, the company purchased Brighton, England-based Climax Racing, maker of auto- racing games ``MotoGP'' and ``ATV Offroad Fury'' for undisclosed terms.

Khan expects Disney to rely less on licensing agreements, such as the accord with publisher THQ Inc. it inherited with the $8.06 billion purchase of Pixar in May. THQ, based in Agoura Hills, California, has game rights to the next four Pixar films.

``They are building the capability to do these games on their own,'' said Khan, who rates the shares ``overweight'' and doesn't own them.

`Chicken Little'

Disney is releasing a second ``Chicken Little'' video game for Nintendo's Wii around the same time the console is expected to go on sale this month.

The game follows a formula that Hopper and other Disney executives want to serve as a blueprint for future titles. Designers at Avalanche worked with the film's producers and animators to get scenes that were created entirely for the game.

``That lets us tell a story in the same universe and time frame as the movie,'' said John Blackburn, Avalanche Software's general manager. ``But we can expand the universe in a way that makes better sense for a video game.''

Collaboration between designers and animators has grown, Blackburn said. Designers get early access to footage, gaining more time to build a game and make it closer to the movie.

``Before we were with Disney, we wouldn't always get access to the movie team and because of the lack of trust, they wouldn't let us do things with the character,'' Blackburn said.

Natural Partner

Disney views Nintendo as a natural partner since its users tend to be younger. While Microsoft Corp. and Sony Corp. compete for ardent video game fans with high-end graphics and complex games, Nintendo has made the Wii simple and easy to use with a controller sensitive to motion.

Novis said kids find Xbox and PlayStation games technical and difficult to learn, while they typically can pick up a Nintendo game and start playing quickly. At $250, Nintendo's Wii costs less than the Xbox and PlayStation 3.

``It seems like with our brand, the Nintendo platform is a really good place to put our development effort and focus,'' Novis said.

Yeah, that's exactly what we need, more Disney licenced garbarge to further the fact that Nintendo's systems are for the 7 and under set.

Yeah, that's the ticket.

Meh, I'll go play Red Steel instead.

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kinopio

I wouldn't mind having Disney licences on Nintendo's system if they were made by Capcom or something. As it is we just KNOW quality won't be there.

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Crunchy

Kingdom Hearts maybe?

Matt_M

It's a new studio. Let's give them the benefit of the doubt until the first title hits the shelves. Even if it is aimed at children, there's hope that it won't be dreck.

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Terranigma Freak

I wouldn't mind having Disney licences on Nintendo's system if they were made by Capcom back in the late 80's to early 90's.

Disney, I salute you with my middle finger!

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LowMax

yippie skippie

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RivenMyst

Oh boy. More Disney bull**** to take up shelf space at Wal-Mart.

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SuperCube

Disney ****ing sucks nowadays. It used to be 'cool'. Now it's just retarded.

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Aipotu

well this makes sense. To put chicken little on 360 or ps3 right now makes near zero sense. I thik because the WIi is much cheaper and 'family friendly', we'll see lots of licensed stuff. And if Wii is the system from the start, maybe we'll see neat stuff in these games.

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Red Yoshi

Why the angry post face? It's all good, man. The more developers on the bandwagon, the better. Since they're exclusively developing stuff for Nintendo consoles, at least we know the system won't just get some brash ports. They'll have the chance to properly tailor games to suit each system's controls.

Give them the benefit of the doubt. For the moment, anyway.

SuperCube

The thing is, the system can't get ports like that because of its controller design. :o(

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bleeper2.0

I think i remember Disney putting its foot down on developers making ****ty games using their licences. So maybe more average games will be released instead of just plain awful ones.

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Cursive

Whatever way you see it, increased developer support is good for the system no matter what (especially if it's Disney stuff which kids and families should lap up.)

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Souzetsu

Exactly. The more the better.

Terranigma Freak

Disney's own game studio made 2 or 3 good games during the end of the 16 bit to early 32 bit days. I don't know what happened to that studio though. Gargoyles is a very good game while Toy Story was good but hard. I believe the also made Hercules for the PS1 and that game was decent, but that's all I know. I have no clue about their new studio.

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Cult Hero

And even if the games suck you can always choose... well... not to buy them.

gonestarfishin

I remember playing the Lion King game for Genesis when I was little. It was amusing.

ALIAS_FAN

Disney Princesses here I come!!!

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SuperCube

If you look at it that way, it'll be cool. However, it does give a negative image, I think. Disney = kiddie.

Then again... Kingdom Hearts is one of the best selling games for the Playstation 2...

I stand corrected.

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