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Mattel Licenses Popular Brand Names to Two Gaming Firms

February 01, 2001|From Times Staff Reports

A few months after unloading its troubled interactive unit, Mattel Inc. announced a new high-tech strategy Wednesday by licensing its most valuable brand names to two outside gaming companies.

Knowledge Adventure, a Torrance-based unit of Vivendi Universal Publishing, will take on the technical and creative responsibilities for Mattel's girls and babies divisions, including Barbie and Fisher-Price, among others. Knowledge Adventure develops learning and game titles for computers and video consoles under such names as Teletubbies and JumpStart Learning System.

Mattel awarded its boys division's Hot Wheels and Matchbox names to THQ Inc., based in Calabasas Hills, which is best known for building games for hand-held devices and video game consoles such as Sony's PlayStation.

Mattel did not disclose the financial details.

Both contracts are for five years, according to the gaming companies.

Under former Chief Executive Jill Barad, Mattel tried to bridge the digital divide between its basic toys and computer and video games by buying a software company, Learning Co. But that division, bought for $3.5 billion in 1999 for its titles including "Myst" and "Print Shop," proved disastrous for Mattel, with quarter after quarter of red ink. In October, Mattel sold Learning Co. to Gores Technology Group in exchange for a portion of Learning Co.'s future value or sale price.

Mattel's new chief executive, Robert Eckert, who replaced Barad in part because of the Learning Co. debacle, has said that Mattel should leverage the power of its brands rather than trying to learn the computer gaming business.

"I am confident that the expertise and experience behind both Vivendi Universal Publishing and THQ will propel Mattel's brands to the next level in the worldwide interactive arena," Eckert said in a Wednesday news release.

For its part, THQ said the deal will help the company expand its presence in the personal-computer market.

"We already have 45% market share in the kids' [computer and video-game] market, and this license will help us expand even further," said Brian Farrell, president and chief executive of THQ.

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