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Marvel, EA Tie Up Seen Tricky

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By Ben Berkowitz

 

LOS ANGELES (Reuters) - Spider-Man, the X-Men and Marvel Enterprises's other superheroes will soon be faced with deadly new enemies being dreamed up by video game publisher Electronic Arts Inc.

 

Analysts and industry executives said the battle royale must be carefully staged to avoid legal entanglements with other video game publishers who have licensed Marvel characters. But they also said the tie-up could lead to a potential new hit franchise for EA and a new characters that Marvel could leverage into lucrative TV and film deals.

 

 

Marvel and EA said on Thursday they had signed a deal for EA to license more than 100 of Marvel's characters, among them "Spider-Man" and the "X-Men," to create a series of fighting games pitting the Marvel heroes against new villains to be created by EA.

 

 

Marvel will in turn license the rights to those new characters and feature them in comic books. The first game under the new deal, under development at EA Canada, is expected to be released at the end of 2005.

 

 

Marvel already has extensive licensing arrangements for some of the same characters with Activision Inc., THQ Inc. and the games unit of Vivendi Universal, raising questions about how it can license the same property again without risking legal problems or confusing consumers.

 

 

"They do step on their toes," said American Technology Research analyst P.J. McNealy.

 

 

A Marvel executive said the new EA games would stand out by featuring a battling cast of superheroes, but said the details still needed to be worked out.

 

 

"It's very early on. We've just begun developing the game." said Tim Rothwell, president of worldwide consumer products for Marvel.

 

 

Eventually, though, Rothwell said, Marvel will be able to exploit the characters EA creates much as it has its own.

 

 

"As the new characters emerge and we figure out where the strengths lie in this new cast of characters ... we can begin some publishing initiatives, merchandising and licensing initiatives," he said.

 

 

OTHER PUBLISHERS NOT BOTHERED

 

 

THQ officials had no immediate comment on the new deal. Activision Chief Executive Bobby Kotick said his company had passed on licensing Marvel characters for fighting games.

 

 

Japan's Capcom Co. Ltd. previously had such a deal for its "Marvel vs. Capcom" series. The last game in that series was released in March 2003 on the Xbox (news - web sites) to disappointing reviews.

 

 

"Fighting for the Marvel characters has just historically not been a very successful genre," Kotick said. "EA stepped into that deal, and there are tremendous restrictions in terms of genre, marketing, what they can include on the packaging, the way they can design the games."

 

 

Thomas Weisel Partners analyst Gordon Hodge raised his 2004 earnings estimates for Marvel slightly but said the biggest benefits were still a way off.

 

 

"We believe Marvel may recognize modest minimum royalty income in the range of $2 million to $3 million in 2004 but could enjoy meaningful royalty overages in 2005 and beyond depending on the success of EA's games, the first of which is likely to be released next year," he said in a note.

 

Bear Stearns analyst Glen Reid said in a note that any gain from the deal would not likely come until 2006. "We believe the bulk of Marvel's take will be from licensing of original content to come from future EA game development," he said.

 

 

While Electronic Arts has little background in fighting games, aside from another licensed property, the successful rap music-themed "Def Jam Vendetta," American Technology's McNealy said the Marvel deal fit a pattern.

 

"This is typical of Electronic Arts' strategy of signing only multiyear, multifranchise deals for licensed properties such as comic book characters," he said. "You're shooting to be more successful than creative."

 

http://story.news.yahoo.com/news?tmpl=stor...marvel_games_dc

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Now how do they get around the thing with Activision doing the Spider Man games?

 

 

Anyway, the fighting system should have the over the top-ness of DJV. I will be a happy man to see DJV Blazin move in a Marvel game.

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