Warner Bros. buys local video game firm

Turbine produces Lord of the Rings, other online hits

By Hiawatha Bray
Boston Globe
April 21, 2010

Turbine Inc., one of the Boston area’s biggest video game companies, has been acquired by Warner Bros. Interactive Entertainment Inc. of Burbank, Calif., a business unit of media giant Time Warner Inc.

“I view this as Hollywood coming to Boston,’’ said Turbine chief executive Jim Crowley, who said the deal underscores Greater Boston’s increasing prominence as a center for video game development.

Financial details of the deal were not released, but a source close to the negotiations said that Warner Bros. will pay as much as $160 million, including sums to be paid to Turbine shareholders in future years if the company meets certain financial targets.

Turbine, a privately held, venture-backed company in Westwood, is one of the leading makers of Internet-based, multiplayer adventure games. The company produces Lord of the Rings Online, Dungeons & Dragons Online, and Asheron’s Call. Thousands of players subscribe to Lord of the Rings and Asheron’s Call, paying monthly fees of around $15 for the right to play and socialize with one another online.

Dungeons & Dragons is a “free-to-play’’ game. Anyone can log on and play for no charge, but players can also purchase additional powers and abilities that make the game more entertaining. Crowley refused to reveal the number of paid subscribers to Lord of the Rings and Asheron’s Call, but he said more than 1 million people play Dungeons & Dragons Online.

Warner Bros. Interactive has bought a number of game development houses in recent years, in a bid to become a major power in video gaming. In 2007, the company purchased TT Games, a British firm that develops family-friendly products like Lego Star Wars and Lego Batman. In 2009, Warner Bros. bought the assets of bankrupt Chicago game company Midway, maker of the Mortal Kombat games. And earlier this year, it acquired a majority stake in Rocksteady Studios, another British developer, which created the hit game Batman: Arkham Asylum.

“The developers they’re buying are first rate,’’ said Michael Pachter, game industry research analyst at Wedbush Securities in Los Angeles. “It’s showing they’re really interested in quality.’’

Acquiring Turbine will give Warner Bros. total control over all future video games based on author J.R.R. Tolkien’s beloved Lord of the Rings novels. Turbine holds an exclusive license to make an Internet-based game based on the books, while last year, Warner Bros. won a license to make non-Internet-based Tolkien video games. Martin Tremblay, president of Warner Bros. Interactive Entertainment, said that control of the Tolkien gaming franchise was just one reason his company was interested in Turbine. Tremblay said that Warner Bros. would work with the Turbine team to develop new online gaming properties. “We will, for sure, in the future expand that platform to much more new product,’’ he said.

Tremblay wouldn’t discuss possible new games. But Warner Bros. controls a stable of likely properties, including DC Comics characters like Batman and Superman.

Bob Davis, managing partner at Highland Capital Partners in Lexington, a venture capital firm that helped finance Turbine, said that bringing in the company’s developers would make it easier for Warner Bros. to develop online games based on the company’s entertainment franchises. “Warner Bros. is not just buying up great intellectual property, they’re also acquiring one of the best development teams in the world,’’ said Davis.

Hiawatha Bray can be reached at bray@globe.com.

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