Disney is "just starting" when it comes to pairing its top franchises with the industry's best game development studios, the company's longtime head of gaming, Sean Shoptaw, told Axios in Los Angeles last week.

Why it matters: Disney is once again a rising force in the gaming industry, not by making its own games but by offering its biggest characters to a who's who of competing publishers and elite developers looking to craft a winner.

• That approach has produced hits like Marvel's Spider-Man 2, a PlayStation exclusive developed by Sony's Insomniac Games and released in October, and last year's popular Marvel Snap mobile game from Second Dinner, a studio led by ex-Blizzard veterans.
• But a recent report from Bloomberg suggested a potential strategic shift, with some Disney brass supposedly pressing CEO Bob Iger to buy a gaming giant like Electronic Arts, maker of Madden and The Sims.

What they're saying: "There's a lot of conversation around: 'Disney should go do this,' and a lot of that's tied to big acquisitions and things," Shoptaw said, declining to directly comment on the EA rumor.

• Instead, he cited recent hit video games made with Disney's current external development approach, including EA's acclaimed Star Wars Jedi Survivor and Gameloft's popular Disney Dreamlight Valley. "It's not just this easy assumption to say, 'Well, Disney could do that in-house,'" he said.
• "We're very happy with where we are now strategically in the work that we're doing."

Flashback: Disney left internal game development and publishing in 2016, in favor of licensing its Star Wars, Marvel and Disney characters to outside developers.

Between the lines: Shoptaw leads a gaming group of about 100 producers, business development executives and others, primarily in Glendale, California, who are largely divided into teams to work on licensing games tied to Star Wars, Disney, Pixar, Marvel, 20th Century Studios and more.

• The games they agree to are born from dialogues with top studios, he said, noting his team is leery of simply shopping a top Disney franchise to studios to see who'll bite. "You're probably going to get to an outcome that's not where we want to be."
• In some cases, studios win Disney's favor with the right pitch. Microsoft-owned MachineGames and Bethesda executive producer Todd Howard pushed to get a deal to make an Indiana Jones game. "They pitched us a really compelling vision for Indy, and that resonated."
• As projects get underway, Disney designates release windows to avoid having games in similar franchises stepping on each other. What if partner A is running late and at risk of colliding with partner B? "Everybody's running late," Shoptaw quipped, before saying that lateness is often no one's fault and something Disney tries to accommodate with all affected partners. "We do a lot of air traffic control," he said.

Yes, but some Disney gaming partnerships that looked great on paper have had issues.

• Marvel's Avengers, made by the respected Tomb Raider studio Crystal Dynamics and released in 2020, was a critical flop that struggled to retain players. Eidos Montreal's Guardians of the Galaxy reviewed well in 2021 but sold poorly, leading to both of those studios being sold by their publisher, Square Enix.
• "We would go back and work with those studios again," he said. "They're great studios, great partners."

The bottom line: "Games are really hard to make," Shoptaw says.

• "If you've got great IP. If you've got a great story. You know, it's still a challenge."

What's next: Iron Man and Black Panther games are in the works at EA, with another Black Panther game set to come from Skydance.

• A major Star Wars game is expected from Ubisoft next year.
• And Microsoft-owned Arkane just teased a game based on Marvel's Blade at The Game Awards in Los Angeles last week.

The vast range of Disney's gaming projects spans most major companies in the industry, from the two-decade-old Kingdom Hearts series to the myriad Star Wars titles past and present.

Why it matters: That's why an interview with Disney gaming boss Shoptaw, who doesn't do many of them, is a rare glimpse into his strategy and take on things.

• On working with SquareEnix on the long-running Kingdom Hearts series, which has a fourth mainline game forthcoming: "That's been an incredibly successful partnership. There's no other way to look at it," Disney's Shoptaw said. "We're super excited about the next game."
• On renegotiating the Indiana Jones game's terms at the request of Microsoft to make it Xbox/PC exclusive, after Microsoft bought its development studio: With "Xbox still being one of the bigger marketplaces for games, we didn't feel like we were going to be overly exclusionary. We felt like it's still going to reach a broad set of folks, and we felt, financially and strategically for the game, that made sense at the time."
• On the beleaguered remake of the beloved Star Wars: Knights of the Old Republic and whether it's ever going to happen: "Not a lot I can say on that point for some hopefully obvious reasons, but KOTOR is obviously an incredibly popular game, one that we are incredibly proud of and think that there's still a lot of demand for. I'll leave it there."
• On the attention Disney's gaming team puts on diverse representation in its partners' games: "We want to make sure that things that we see on screen are representative of our consumer base, our audience."
• On widespread industry layoffs in 2023: "We're super empathetic to what's going on, even with our own partners, in some cases. And we try to be the best partner we can. We try to be as flexible as we can."

Larian Studios' Baldur's Gate 3 won Game of the Year at last week's The Game Awards in Los Angeles, but its developers had just 30 seconds to say thank yous and begin paying tribute to a colleague who had died before a monitor advised them to "Please Wrap It Up."

Why it matters: The TGAs, a perennial mix of hype for new games with a seasoning of actual award presentations, was criticized this year by media and industry figures for hurrying winners off the stage.

• Axios Gaming sat in the loge section for the awards, two rows behind the show producer whose job it was to hit a key on a laptop to start the 30-second countdown clock.
• We heard of at least one winner who was frustrated at the short time they had to speak.
• The next day, TGA creator and host Geoff Keighley said he agreed "the music was played too fast for award winners this year" and the show would address speaking time "going forward."

Between the lines: Other winners included Sea of Stars for Best Independent Game and Alan Wake 2 for Best Game Direction, Best Narrative and Best Art Direction.

State of play: The TGAs are so intertwined with promoting games that Larian Studios boss Swen Vincke later acknowledged on social media that he was supposed to use his acceptance speech to also announce the Xbox release of his studio's game.

In news announced at The Game Awards …

😀 The makers of renowned indies Thumper, Dead Cells and Inscryption are working on new games: Thrasher, Windblown and Pony Island 2, respectively.

🎮 EA will publish Tales of Kenzera: Zau, an Afrofuturist adventure from new studio Surgent.

😲 Sega is working on new games in many of its classic franchises, including Crazy Taxi, Golden Axe and Jet Set Radio. No word yet on development teams.

🌍 No Man's Sky lead creator Sean Murray teased his studio's next game, an Earth-scale fantasy adventure called Light No Fire.

🏴‍☠️ Ubisoft gave Skull & Bones what hopefully will be a real release date this time: Feb. 16.

🔥 God of War: Ragnarök is getting a surprise, free expansion … tomorrow, Dec. 12.

And in non-TGA news …

🤔 Fntastic, the studio behind the much-hyped, early-access game The Day Before, shut down just four days after it launched in very poor shape, Kotaku reports.

☹️ Timesplitters studio Free Radical closed today, as part of ongoing cuts by The Embracer Group, Eurogamer reports.

🧑🏽‍⚖️ Epic and Apple have filed their responses to the others' petition to get the U.S. Supreme Court to hear their appeal of the mixed ruling in the iOS app store antitrust case involving Fortnite. It could take another month before the Court decides whether to hear the case.

🤝 A union contract at Tender Claws is a first for a U.S. video game studio, according to the Communication Workers of America, which has helped other worker groups enter ongoing negotiations with studios at Blizzard, Activision and Microsoft.

• The CWA outlined some of the Tender Claws' union wins, including additional health benefits, "pay scales based on seniority and job title" as well as "repetitive stress injury protection, and virtual reality breaks."

🤖 ZeniMax, the Microsoft subsidiary that consists of several major game studios, including Bethesda, id and Arkane, has tentatively agreed with its unionized workers to implement job protections around generative AI, according to the CWA.

• Per the union: "The agreement commits ZeniMax to uses of AI that augment human ingenuity and capacities, to ensure that these tools enhance worker productivity, growth and satisfaction without causing workers harm."

I asked readers what their favorite games of 2023 have been. Here are two more.

• Call of Duty Warzone 2 — "It offers competitive play that brings out the sport of the game," writes reader Charles, who adds this tip: "Landing hot and getting sweaty is not always the best strategy!"
• Halls of Torment — "A great game from a small studio," writes reader Masoud. (Note from Stephen: Thanks, I hadn't heard of it!)

Thank you to everyone who sent their picks in.