Instant Analysis: Disney Has a New Video Game Production Partner

By Keith Noonan Markets Fool.com

Image source: Marvel.

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Disney's (NYSE: DIS) Marvel Entertainment will be partnering with Japanese publisher Square Enix (NASDAQOTH: SQNXF) for the creation of video games built around the Marvel Universe. Precise terms of the deal are still scarce, but the license is slated to last multiple years and produce multiple games, according to Marvel's announcement, with The Avengersplanned to be the debut release. Publisher Square Enix is best-known for the Final Fantasy series, while Crystal Dynamics, the developer of the first game to spring from the recently announced partnership, is coming off of two installments in theTomb Raider franchise.

Between the recently announced productions with Square Enix,Marvel vs. Capcom: Infinite from developer and publisher Capcom, and its Star Wars deal with Electronic Arts, Disney now has big game initiatives underway for its two biggest movie franchises.

Does it matter?

Image source: The Motley Fool.

The new partnership with Square Enix is notable because it's the first big licensing deal in the wake of Disney reducing its internal video game development efforts, and because the Marvel property has been underutilized when it comes to games. Time Warner has had great success with its Batman video games, but Disney's superhero ensemble hasn't had much to show on the gaming front despite blockbuster results on the silver screen. The company's Marvel Cinematic Universe film series is one of the most successful entertainment franchises in history, generating roughly $11 billion in ticket sales across 14 releases and driving healthy merchandise sales, so a bigger push into interactive entertainment should be welcomed by Disney investors.

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Developer Crystal Dynamics' last two major releases received stellar reviews, which gives reason to be optimistic that the first game to emerge from the new partnership will be high-quality, and set the stage for the Marvel franchise to have continued success in video games and create a new revenue stream for Disney.

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Keith Noonan has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Electronic Arts and Time Warner. The Motley Fool has a disclosure policy.