UPDATE: THQ Grabs Rainbow -- and Inside Track to Possible 'Turtles,' 'Mighty Mouse' Game Deals13 Nov, 2001 By: John Gaudiosi
Calabasas, Calif.-based video game publisher THQ, best known for its World Wrestling Federation and Nickelodeon video game licenses, has filed a letter of intent to acquire Phoenix-based video game developer Rainbow Studios, which developed Microsoft’s Motocross Madness PC game, Sony’s ATV Offroad Fury for PlayStation 2, Infogrames' Splashdown for PS2, and LucasArts’ Star Wars Racer II: Racer Revenge for PS2.
Rainbow has 100 employees and splits its development between video games and animation, including computer-generated imagery for the new Teenage Mutant Ninja Turtles movie.
Under the terms of the agreement, Rainbow Studios will become a wholly owned subsidiary of THQ. In connection with the acquisition, THQ will issue approximately 1,000,000 shares of common stock to Rainbow shareholders. The acquisition is expected to close as soon as all necessary approvals and consents are obtained. The William Morris Agency introduced Rainbow to THQ.
“As video game platforms ship, there’s been a traditional rush by the leading game publishers to acquire game developers,” said Rainbow Studios president Earl Jarred. “The only way we could grow as a company was to be acquired or go public and become a publisher. This will allow us to grow the company in new directions and pursue new projects.”
The move also completes a loop for THQ, which has the exclusive rights to turn Nickelodeon projects into video games. In addition to working on the CGI Teenage Mutant Ninja Turtles movie, Rainbow’s animation studio is developing a CGI "Mighty Mouse" film for Nickelodeon, which is expected to follow the "Jimmy Neutron" model of launching the franchise first as a Paramount feature film and then as a Nickelodeon TV series. John Woo and Terence Chang will produce the film through their Digital Rim Entertainment. THQ would then be the likely candidate to publish “Mighty Mouse” video games, which Rainbow could develop.
THQ is also expected to be one of the six game publishers vying for the “Turtles” video game license, which Rainbow has a heads-up on, having developed CGI animation for the film, which is also being produced by Digital Rim’s Woo, Chang and Jarred, who also serves as president of Digital Rim. A Game Boy Advance “Turtles” game is expected to ship next fall with the launch of the animated TV series. PlayStation 2, Xbox and Gamecube “Turtles” games would launch in spring 2003, at the earliest.