Warner Bros. Buying Stake in SCi/Eidos

December 15, 2006 | By: James Brightman

| More

In yet another sign of the increasing attraction of video games for media giants, Time Warner today announced an agreement to purchase more than a 10 percent stake in SCi Entertainment. A licensing and distribution agreement was also forged.

The rumors had been floating around for a few months, but today Time Warner (GameDaily/AOL's parent company) officially announced that it's purchasing a 10.3 percent stake in U.K. video game publisher SCi Entertainment, which is the parent group for Tomb Raider and Hitman publisher Eidos.

The deal, which is expected to cost Time Warner 44.5 million pounds ($87.5 million) and is still pending SCi shareholder approval, also involves an agreement for licensing and distribution of games based on select Warner Bros. Entertainment properties. Warner Bros. Interactive Entertainment (WBIE) has granted licenses to SCi for the comic book version of Batman, Looney Tunes, select titles from the Hanna-Barbera catalog and television properties The OC, Loonatics Unleashed and Legion of Super Heroes. Eidos will help develop games based on these properties.

Additionally, SCi/Eidos should benefit from Warner Bros.' distribution network and expert merchandising skills. Under the terms of the agreement, Warner Bros. Home Entertainment Group will provide warehousing, logistics, merchandising and media buying services in the United States to Eidos. Eidos will, however, continue to run all other aspects of its U.S. operations including manufacturing, sales, marketing and PR.

"Investing in SCi further solidifies our commitment to the rapidly growing interactive and gaming space," commented Kevin Tsujihara, President, Warner Bros. Home Entertainment Group. "This deal is consistent with our core strategy of delivering high quality entertainment based on some of the world's best-loved brands for all formats and channels. We look forward to working with SCi to build games the fans of these brands will truly enjoy."

"These agreements represent a further step in SCi's development as one of the world's leading publishers of interactive entertainment. The licensed properties extend and strengthen our product portfolio through globally recognized titles such as Batman, Looney Tunes including brands such as Bugs Bunny and the classic Hanna-Barbera catalogue including brands such as Tom and Jerry," added Jane Cavanagh, Chief Executive of SCi.

She continued, "The properties also include content with a broad demographic appeal. Significantly, the partnership with Warner Bros. Home Entertainment Group in the United States links us to the distribution network and buying power of one the world's largest media companies. The additional investment provides us with the firepower to accelerate growth initiatives such as increasing our development capacity and our new media and online strategies."