Star Wars fans weren’t the only ones over the moon when The Walt Disney Company (NYSE:DIS) acquired Lucasfilm in October, 2012. Investors, already well aware of Disney’s tremendous successes in previous acquisitions, such as Pixar and Marvel, were just as excited. (Yoda and Mickey probably weren’t too upset either.)
So far, things are off to a good start. One galactic coup for The Walt Disney Company (NYSE:DIS) was when Kathleen Kennedy, president of Lucasfilm, used a Jedi mind trick and recruited J. J. Abrams to be the director of Episode VII—the next installment in the Star Wars saga. If Abrams’s previous success in revitalizing the Star Trek franchise is any indicator of what he will do with Star Wars than there is a lot to be excited about.
Not to mention, the excitement of seeing the old crew. The rumors of Harrison Ford, Carrie Fisher, and Mark Hamill reprising their roles in the next film seem to have been all but verified—another step in the right direction.
One area of concern though with The Walt Disney Company (NYSE:DIS)’s stewardship of the Star Wars universe is how successful they will be in reviving LucasArts– the Lucasfilm division responsible for gaming. For some time, LucasArts was one of the leading studios in video game development. Recently, though, LucasArts has lost its edge.
This Lightsaber’s a Little Duller
Gamers eagerly awaited last year’s release of Star Wars: The Old Republic, a massive multi-player online, or MMO, game. Following a poor release, though, the game has failed to live up to expectations; consequently, players have chosen against renewing their monthly subscriptions. Although the game’s publisher, Electronic Arts Inc. (NASDAQ:EA) has been reluctant to offer specific numbers, the consensus is that, currently, the game has approximately 500,000 subscribers– quite the disappointment when you consider that Electronic Arts had hoped that The Old Republic would be as successful as the MMO from Activision Blizzard, Inc. (NASDAQ:ATVI): World of Warcraft.
Those were pretty high hopes. With over 9 million subscribers, the World of Warcraft franchise accounted for 61%, 90%, and 89% of Activision Blizzard’s net revenues for the years ended December 31, 2012, 2011, and 2010, respectively.
The Old Republic was not the only misstep. There has been a lot of speculation and enthusiasm about another game from that galaxy far, far away—Star Wars: First Assault. Recently, footage of the game has leaked onto the web and inspired hopes that a release would be imminent, but, as of yet, there has been no announcement of an actual release date. So, for now, the game remains in limbo—another lost opportunity for LucasArts.
Last summer at E3, the Electronic Entertainment Expo, excitement grew when LucasArts unveiled Star Wars: 1313—a more mature game, which explores the shady underworld of the planet, Coruscant. The concept art for the game is available online, and if you ever wondered what Luke Skywalker in a film noir would look like, you should check it out.
Perhaps, this is a little too mature for The Walt Disney Company (NYSE:DIS)’s tastes. The game’s development is on hold, or rather, frozen, like Han Solo in Carbonite.
Help Me, Obi Wan Kenobi
Okay, maybe LucasArts doesn’t need a Jedi knight to rescue them . . . but they do need rescue. Some have speculated that The Walt Disney Company (NYSE:DIS) has put the video game development on hold in order to better align the games with the plotlines of the soon to be released films. This seems like a fair assessment, but it doesn’t address a more important point—the collaboration between LucasArts and Electronic Arts is no longer a productive one.
A partnership with Activision Blizzard, Inc. (NASDAQ:ATVI) would make a lot more sense. With successes like Call of Duty, WorldofWarcraft, Diablo, and Starcraft under its belt, Activision Blizzard, Inc. (NASDAQ:ATVI) is clearly capable of righting the LucasArts ship. And, perhaps, it makes even more sense when you consider that Activision Blizzard, Inc. (NASDAQ:ATVI) has already produced several video games featuring Spider-Man and X-Men from the Marvel universe
These are exciting times for fans of the Star Wars movies. And, they could be exciting times for fans of the Star Wars video games if The Walt Disney Company (NYSE:DIS) and LucasArts get things back on track. Although Activision Blizzard, Inc. (NASDAQ:ATVI) has been on my watchlist for the past year, I would be much keener on initiating a position if I saw some sort of collaboration with LucasArts.
The article Disney, Activision and a Galaxy Far, Far, Away originally appeared on Fool.com and is written by Scott Levine.
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