Disney to Get Interactive With Start of New Division : Entertainment: The unit will publish video games and CD-ROM software.

Walt Disney Co. is scheduled to formally hop on the interactive bandwagon today with the launch of a new division that will publish video games and CD-ROM software.

Disney is the last of the major entertainment conglomerates to launch its own interactive publishing arm. The move is significant because it represents a major commitment to the emerging industry by the company that has been perhaps the most skeptical of the so-called digital revolution.

Disney has scheduled a press conference with company Chairman Michael Eisner to announce its new efforts. The division will be headed by Steve McBeth, executive vice president of Disney Consumer Products, sources said Sunday.

The unit will be dubbed Disney Interactive--in the tradition of such entertainment industry forerunners as Time Warner Interactive, Fox Interactive, Universal Interactive and Paramount Interactive. It plans to publish five cartridge games and about a dozen CD-ROM titles by next Christmas.

A year ago at the “Superhighway Summit” at UCLA, Eisner decried the “interactive multimedia” craze and insisted that his was “not a technology company.”

But the company began to change course last spring, when Eisner and then-Disney Studio Chairman Jeffrey Katzenberg showed off the “Lion King” video game that the firm had jointly developed with Irvine-based Virgin Interactive. Eisner said the technology had advanced to the point where creative input could make a difference.

Among Disney’s first publishing efforts will be games based on its TV series “Gargoyles” and its coming animated film “Pocahontas.”

McBeth will report to Rich Frank, chairman of the firm’s Television & Telecommunications group, and to Barton Boyd, chief of Consumer Products. The goal is to give the new division access to all of the company’s resources, including theme parks, magazine and book publishing, and film.

Nearly every media company in the world is experimenting with the interactive format as a potential source of revenue--though Hollywood’s ventures in the area have thus far not been overly successful. The number of homes with CD-ROM drives expected to reach 10 million by the end of this year, and annual revenue for the video game industry is $6 billion, exceeding the figure for annual U.S. box-office receipts.

Still, analysts said, Disney’s chances are better than some because of the fame of its characters.

“It’s becoming an extremely crowded market, and margins are very thin,” said Bruce Ryon, multimedia analyst at Dataquest. “But the thing about the video game market is, if you’ve got good character identification your chances of success are much higher. If they leverage those character identities they have a pretty good shot.”