Is Disney Mousing Around? : Critics Say Its Software Unit Hasn’t Taken Advantage of Its Film Titles toCreate Blockbuster Computer Games

With the vast resources of its parent, many observers had high expectations when Walt Disney Computer Software Inc. was started five years ago.

But to some industry analysts, the Walt Disney Co. unit--which licenses Disney titles to video game publishers and itself publishes computer games--has thus far been a disappointment.

“I think creatively they’ve been a failure,” said Peter Spear, the author of several books in the field. “There’s a lot of ho-hum stuff out there, but from Disney you’d expect better.”

Jeff Silverstein, editor and publisher of the newsletter Software Industry Bulletin, said Disney has been slow to use the resources available throughout the company--including its characters, movie titles and technical expertise--to create blockbuster computer and video games.

“It really takes the right combination of aggressive people who have some sort of vision, and it takes a corporate commitment as well,” Silverstein said. “Maybe one or both of those things are lacking over at Disney.”

Said Peter Scisco, editor of Kids & Computers magazine, “I guess we were guilty of inflated expectations.”

Disney executives toss aside suggestions that the 46-employee software division has not been successful. Indeed, even its harshest critics acknowledge that Disney has produced some good products, including educational children’s titles such as Mickey’s 1 2 3’s. Disney’s Stunt Island, a computer game released last fall that combines a flight simulator with the ability to create special effects similar to motion pictures, was named the best consumer program of 1992 by the industry trade group Software Publishers Assn.

And while Disney Software is puny compared to such industry giants as Electronic Arts, Disney is well ahead of its rival studios in producing its own software. Among entertainment companies, only George Lucas’ highly regarded LucasArts Games is believed to have sold more computer games.

Disney Software has 25 current computer titles, and an equal number of video games have been released over the years. Three of its computer titles--”Mickey’s Runaway Zoo,” “Donald’s Alphabet Chase” and “Who Framed Roger Rabbit?”--have sold more than 100,000 copies, the industry equivalent of earning a Gold Record.

“I think we’ve been very successful,” said Steve McBeth, executive vice president of Disney Consumer Products, the division that includes Disney Software.

To be sure, Disney Software could very well be profitable--although Disney will not break out its financial results. The unit also stands to benefit from the growth of the video game and computer software markets, and from what some observers believe will be revolutionary changes in home-entertainment technology.

Yet the perception that the company hasn’t performed up to expectations has fueled continued talk in the industry that Disney Software may be sold.

Disney officials emphatically state that the software unit is not now--nor has it ever--been on the block and that the rumors may have been prompted by routine talks Disney held last year with a large software developer about a possible licensing agreement.

McBeth says Disney is as committed as ever to the software business--so much so that Disney Studios Chairman Jeffrey Katzenberg is making a major address at the Consumer Electronics Show in Chicago next week. Also at the show, Disney will preview its “Aladdin” video game, based on its hit animated movie of last year.

Disney has high hopes for the “Aladdin” video, which it co-producing with Virgin Games; it is being published by Sega of America Inc. The game, due out this fall, marks a new level of involvement by Disney in the development of video games--it even enlisted the talents of its famed motion picture animators--and company executives predict it will set new standards in video game quality and resolution.

Some observers complain that Disney doesn’t release its movie-themed software until public interest in the films has faded. By contrast, Sony’s games division has been collaborating with makers of Sony Picture’s “The Last Action Hero,” a movie starring Arnold Schwarzenegger that is expected to be one of this summer’s big hits. The game, which will incorporate some of the high-tech wizardry of the film, will be released six months after the movie.

Sony and other big media concerns have also been placing their bets on technological innovations that could shape the future of home entertainment.

Sony Electronic Publishing, for instance, has acquired Psygnosis Ltd., a leading British maker of video and CD-ROM products. Sony is also working with Nintendo Ltd. to develop technology that could usher in the next generation of video games.

As for Disney, McBeth said the company has looked at CD technologies, but no specific products have been announced. He cautioned that “anybody looking at the future of interactive entertainment has to be aware there’s a lot of hype out there in terms of what’s coming.”

Johnny Wilson, editor of Computer Gaming World magazine, noted Disney’s longtime pattern of conservatism when it comes to new businesses. “Rather than pioneering, they’re a solid player in a second tier, then they use their properties to leverage into the first tier.”

And that course seems to suit Disney just fine when it comes to software. Said McBeth: “We’ve been on a steady, progressive growth cycle. If people are expecting a major shift in strategy at Disney, we’re not shifting strategy. We’re just continuing to grow and develop what we’re already doing.”