News Corp eyes video games market

News Corp, the media company controlled by Australian billionaire Rupert Murdoch, is eyeing a move into the video games market.

According to the Financial Times, chief operating officer Peter Chernin said that News Corp is "kicking the tyres of pretty much all video games companies". Santa Monica-based Activison is said to be one firm on its takeover list. Video games are "big business", the paper quoted Mr Chernin as saying. We "would like to get into it".

The success of products such as Sony's Playstation, Microsoft's X-Box and Nintendo's Game Cube have boosted demand for video games. The days of arcade classics such as Space Invaders, Pac-Man and Donkey Kong are long gone. Today, games often have budgets big enough for feature films and look to give gamers as real an experience as possible. And with their price tags reflecting the heavy investment by development companies, video games are proving almost as profitable as they are fun.

Mr Chernin, however, told the FT that News Corp was finding it difficult to identify a suitable target. "We are struggling with the gap between companies like Electronic Arts (EA), which comes with a high price tag, and the next tier of companies," he explained during a conference in Phoenix, Arizona. "These may be too focused on one or two product lines." Activision has a stock market capitalisation of about $2.95bn (£1.57bn), compared to EA's $17.8bn. Some of the games industry's main players have recently been looking to consolidate their position by making acquisitions. France's Ubisoft, one of Europe's biggest video game publishers, has been trying to remain independent since Electronic Arts announced plans to buy 19.9% of the firm. Analysts have said that industry mergers are likely in the future.
