Warner Brothers Entertainment, the Hollywood studio owned by Time Warner, is bolstering its presence in video games with the acquisition of Snowblind Studios, a Seattle-based developer.
The deal comes as traditional home entertainment groups are moving to reposition themselves amid an industry-wide slump in DVD sales...
DVDs have been Hollywood’s most reliable cash generator for the past decade, but studios are grappling with a severe decline in sales over the past 12 months as the format matures and consumers tighten their belts.
Blu-ray, the next-generation DVD format, enjoyed healthy growth in the run up to Christmas, with Warner Bros having sold close to 2m units of the The Dark Knight. But the studio does not expect total home entertainment sales – which include Blu-ray, digital downloads and DVDs – to return to growth until 2010, although this may become difficult if conditions continue to worsen.