Crystal buy for King

Syndicator King World Prods. joined the growing list of entertainment industry heavyweights investing in interactive entertainment, announcing Tuesday that it has acquired a 10% equity stake in Palo Alto-based Crystal Dynamics.

King World is the second major entertainment company to buy into the upstart interactive firm since Strauss Zelnick left 20th Century Fox to become its president/CEO (Daily Variety, June 22). Home Box Office also bought 10% of the company (Daily Variety, July 29).

“Our investment in Crystal Dynamics provides (us) with our first opportunity to get in on the ground floor of the interactive media business with one of its most promising players,” Michael King, King World’s president and CEO, said in a release.

King said his company — which syndicates “Wheel of Fortune” and “Jeopardy!”– is especially interested in the way interactivity will be applied to gameshows.

Qualitative investment

King World chief financial officer Jeffrey Epstein told Daily Variety that his company spent six months meeting with 100 interactive companies before settling on this investment. He also hinted that the stake will probably be the precursor of similar investments down the road.

“Our goal is not only to make a profit on this investment, but also to learn about this business, so we can increase our investment,” Epstein said. “Over the course of the next few months as we learn this business with them, we can make additional investments within Crystal Dynamics or in other companies in non-competitive market segments or possibly even start our own (interactive division). There’s a lot of opportunity for us with this window on the industry.” Added Crystal Dynamic’s Zelnick, “Joining forces will give both companies substantial new options.”

King World certainly has the financial wherewithal to pursue such investments; it currently carries about $ 400 million of cash on its balance sheet.

In addition to HBO and King World, Technology Partners and Kleiner Perkins Caulfield & Byers are major equity investors in Crystal Dynamics.

Crystal Dynamics was founded in June 1992 by former Sega executives Judith Lange and Madeline Canepa, and Dave Morse, former president of New Technologies Group and Amiga Computers. Zelnick joined the company in June as prexy and CEO.

The company’s first CD-ROM interactive game title, “Crash ‘n Burn,” will be bundled with the Panasonic REAL 3DO Interactive Multiplayer system during its introduction this fall. The company said its second original title, “Total Eclipse,” will be available in November.

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