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Disney Merges Video Game, Digital Units

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SAN DIEGO Disney is merging its video game division with its digital media unit.

The newly combined unit will be called Disney Interactive Media Group and be headed by Steve Wadsworth, current president of the digital media unit, Walt Disney Internet Group.

In an internal memo, Disney CEO Bob Iger explained that combining the groups allowed for making connections between Disney's efforts online and on mobile with console and handheld games.

"The uniqueness of the Disney brand provides us an opportunity and an imperative to create a unified Disney-branded experience and community across all connected devices," Iger wrote.

Company sources said the merger would not result in layoffs and in fact might open up new employment opportunities. The combined unit brings together WDIG's 1,700 employees with an additional 1,000 from video game division Disney Interactive Studios.

Wadsworth will work closely with Graham Hopper, evp and gm at Disney Interactive Studios, on new opportunities.

Disney has been aggressively pursing entertainment opportunities online in recent years, especially in the connected community and virtual world space. Last month, Disney Interactive Studios launched DGamer, a free, avatar-based community for U.S. buyers of games the company develops for the Nintendo DS.

In an interview for that launch, Paul Yanover, executive vp and managing director of Disney Online, said the eventual goal will be a connected environment where players of Disney DS games could communicate with players on Pirates of the Caribbean Online and other Disney virtual worlds.

Said Michael Goodman, head of the Yankee Group's digital media division: "For Disney this move makes a lot of sense because they've slowly been integrating a lot of content into WDIG. A lot of their casual games on Disney Online already are running under WDIG, and this will put all their games and online communities under one banner."