Disney Sharpens its Competitive Edge Across the Globe

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Parks & recreation, television broadcast and retail are just a few forays The Walt Disney Company (NYSE: DIS ) holds close to its whimsical heart. Known for moseying in to almost every medium possible, Disney has discovered two more modern ways to reach a larger demographic in Japan, the U.S. and China; social gaming and furthering animation content development.

Just as Zynga (NASDAQ: ZNGA ) and others before it have found success in the popularized social gaming industry, Disney is set to do the same in Japan and America. While this is not the first set of digital games the company has announced, (Disney joined the social gaming market in 2010), it is an expansion worth noting.

"Although there's a lot of activity around the company's gaming business, the incremental benefit for Disney is likely to be small. We estimate that the consumer products business, under which these revenues are accounted, constitutes just about 6.5% to its stock. Nevertheless, the expansion into social gaming gives Disney an opportunity to better engage its customers and market additional products including theme park tickets, other games, holiday packages and promotion of new movies," Trefis said in an April 5 research report.

The mobile gaming platform is one that Disney found it cannot ignore. Through this realization has sprouted a partnership with Japan-based DeNA in an effort to up the playing ante.

According to Trefis, "Japan is a substantial market for social gaming with total sales in 2010 amounting close to $1.5 billion. Disney and DeNA plan to launch two games in Japan as well as the U.S. based on the Disney characters."

Disney has also decided to further develop animation content in its Chinese market, as it announced yet another partnership today with China Animation Group and Tencent. This new conglomerate is expected to churn out professional story-writing, screening and market research across television, film and digital platforms.

Research firms are seeing this team-up as a positive step for China.

"The announcement comes less than two months after China eased long-standing restrictions on foreign studios, such as the number of foreign films released in China each year (34 films, up from 20) and the proportion of box office receipts granted to foreign studios (25% of receipts, up from 13%)," Goldman Sachs said in a research report today.

With added expertise in a field Disney is already quite familiar and well-versed in, the company is becoming known as insurmountable competition for those pitted against it.

DreamWorks Animation (NASDAQ: DWA ) recently announced that it will undergo a similar partnership venture in China. Disney's copycat undertaking will likely overshadow the animation company, but not for at least a few years. As the happiest place on earth continues to gleefully expand and hammer down the competition, Walt Disney's worldwide endeavors appear to have only just begun catching steam.

Disney is currently trading at $41.11, up +9.65%. Zynga (NASDAQ: ZNGA ) is currently trading at $11.48, +up 22.1% YTD. DreamWorks is currently trading at $17.24, up +4.01% YTD.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: DIS , DWA , ZNGA

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