Mattel to Buy Girls’ Games Innovator Purple Moon

Purple Moon, a pioneer in the market for interactive games for girls that just a month ago closed its doors and laid off its employees, said Thursday that it is being acquired by El Segundo-based Mattel Inc.

The deal was in the works before the Mountain View, Calif., company ceased operation on Feb. 19 and will preserve Purple Moon’s product line while helping extend its games’ characters into other media, said Nancy Deyo, chief executive and resident of Purple Moon.

The acquisition would allow Mattel, which launched the girls’ games market three years ago with its successful Barbie Fashion Designer title, to reach older girls. Purple Moon’s titles, such as “Rockett’s New School” and “Secret Paths in the Forest,” are geared toward girls 11 to 14 years old.

Mattel’s software is designed for girls 5 to 10 years old.

“This deal is really going to strengthen our portfolio of girl-oriented software brands and add to our ability to find a new target audience,” said David Haddad, president of Mattel Media.

“We also plan to use it as a way to encourage girls to continue to be active users of the computer.”

Haddad declined to disclose the value of the deal.

Mattel shares jumped $2.50 to close at $25.06 on the New York Stock Exchange.

Haddad said Mattel would consider hiring some of Purple Moon’s 35 employees to “retain the tremendous character development that’s been done over time for Rockett and other characters.”

Deyo will become an advisor for Mattel.

Purple Moon’s CD-ROM franchise and its Web site will be incorporated into Mattel’s software division, Mattel Media, which has generated $100 million in sales since its launch in 1996.

Mattel will also begin to expand Purple Moon’s brands, starting with the launch of Scholastic’s “Rockett’s World” book series later this year.

Purple Moon was forced to shut down last month because of lackluster software sales and intense competition for retail shelf space, analysts said.

The firm sold about 139,909 girls’ game titles last year, while Mattel sold about 1.4 million, according to Reston, Va.-based market research firm PC Data.

The deal highlights the difficulty of making it as a small firm in the increasingly competitive interactive games market.

Although the girls’ games segment is making money, most sales are of products made by well-known Mattel, a known brand name.

Indeed, Mattel held six of the top ten girls’ titles last year, while Learning Co., which Mattel plans to acquire, held the remaining four, according to PC Data.

Small publishers of girls’ games took the industry by storm three years ago, developing titles based on relationships rather than the traditional violent fare peddled to boys.

But analysts say these start-ups still face the same challenges that confronted Purple Moon.

“This problem is absolutely endemic to the industry--it is going into a business and a distribution network dominated by serious heavyweights,” said Seema Williams, an analyst with Cambridge, Mass.-based Forrester Research.

“These companies are going up against the Mattels and Hasbros and vying for children’s attention.”