Disney Makes Plans for Aggressive Move Into Software Market

Buoyed by the success of its first computer game venture last year, Walt Disney Co. will jump full scale into the software business later this year, company officials revealed Tuesday.

Executives at Disney’s year-old software development unit in Burbank said they plan to release at least six new game and educational PC titles aimed at children by Christmas. The new titles are expected to feature such traditional Disney characters as Mickey Mouse and Donald Duck, as well as such newcomers as Kermit the Frog and Dick Tracy.

Disney is not the first movie studio to exploit the full cash-register potential of its cast of characters. PC programs featuring Indiana Jones and other movie heroes regularly appear on retail shelves through licensing agreements, and even Disney itself has licensed Mickey Mouse and his friends to other software publishers over the years.

But now Disney is one of the first studios to take full charge of its characters’ PC appearances by going into the software business itself and de-emphasizing its software licensing activities. The move puts the Burbank-based company squarely in the middle of emerging entertainment and technology markets, said Roger Hector, director of product development at the software unit.

Disney’s move into the software market comes as the company is aggressively trying to wring as much business as possible from its stable of well-known and well-loved children’s characters.

However, its move comes as the computer software market has been hit by the double whammy of sluggish home computer sales and the still-raging popularity of Nintendo-style video game systems. According to industry sources, there are about as many PCs in U.S. homes--about 16 million--as video game systems.

However, Disney executives profess little concern, noting that the overall game and education software markets--now running at combined annual retail sales of about $400 million--should grow significantly in the future.

“We’re in this for the long term and we are very optimistic about the viability of the market in that time,” Hector said.

The sluggishness of the current market may matter little to Disney products, said Gregory Luchsinger, marketing vice president of SoftKat, a Chatsworth software distributor. “They have the Disney name and momentum behind them,” Luchsinger said. “And they have the financial and manpower resources to bring out lots of titles, which is exactly what this market demands.”

Disney formed its software unit quietly at the end of 1988 and last year introduced its first product, a game featuring Roger Rabbit, to cash in on the character’s enormous popularity and test the PC software market, Hector explained. When the Roger Rabbit game sold more than 100,000 units--making it among the top-selling PC games ever--the company decided to aggressively move into the market and has since hired dozens of programmers and other workers. Still, the company has made no formal public announcement of its intentions and strategy.

Hector said the new games and educational programs would be aimed at young children and would come equipped with on-screen cues that would require no special computer skills.

The software development unit is also responsible for developing video game projects with outside licensees and writing other software programs such as an animation instruction system scheduled for release in two months.