Parks & recreation, television broadcast and retail are
just a few forays The Walt Disney Company (NYSE:
) 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:
) 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
Research firms are seeing this team-up as a positive step for
"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:
) 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
) 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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