Update: Videogame Makers to Merge, Move to Los Angeles

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Two California videogame developers have decided to merge and move to Los Angeles.


Newport Beach-based Collective Inc. and Emeryville-based Backbone Entertainment said Tuesday that they have joined forces to form a company with 300 employees. Financial terms were not disclosed.


The new company, called Foundation 9 Entertainment, will be run by Backbone Chief Executive Jon Goldman, pending shareholder approval.


Collective is best known for developing games based on movies and TV shows, including “Men in Black,” “Star Trek” and “Buffy the Vampire Slayer.” Its current project is the videogame for “Star Wars Episode III: Revenge of the Sith.” The company has about 90 employees.


Backbone has more than 200 employees and publishes games under two labels: Digital Eclipse and ImaginEngine, which specializes in children’s titles. Backbone also makes games for portable devices, including a game for Sony Corp.’s new PlayStation Portable called “Death Jr.”


“It’s a great fit, there’s no overlap,” Goldman said, indicating the company is not planning on eliminating positions but is in a hiring mode.


The extent of the move to L.A. isn’t clear. Goldman, who lives in L.A., said the corporate office has fewer than five employees. But he indicated the company would be announcing a greater L.A. presence by late April or early May.


The merged company’s operations in Newport Beach, Emeryville, Vancouver and Boston will remain in those locations, he said.


There has been consolidation in recent years in the videogame industry, leaving a few large publishers such as Electronic Arts Inc., and locally based Activision Inc. and THQ Inc. Game makers have also been gravitating toward Hollywood as the industry increases its ties with film and TV entertainment brands. Electronic Arts, based in Redwood City, has a large local satellite in the Playa Vista development near Marina del Rey.


“It’s not just getting bigger for the sake of being bigger,” Goldman said. “We’re not in the same league as Electronic Arts, and this does not pit us in an adverse relationship with the THQs or the Activisions of the world.” He said the merger will allow the company to focus more on creating original intellectual property, ranging from licensing comic books and action figures to plush toys and T-shirts springing off its game titles.


“We’re not in any way looking to become a publisher we’re looking to become a bigger developer,” Goldman said.

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