Disney hopes game character makes it to big screen

In a first effort at the new strategy, Disney is launching this week an animated alligator named "Swampy," whose bizarre quest in the 99-cent iPhone game "Where's My Water?" is to keep clean.

The reptile, unlike his in-the-wild counterparts, lives under a big city and mostly hangs around in his bathtub, waiting for iPhone owners to dig a digital trench that allows water to flow into his poorly connected plumbing.

Disney Mobile general manager Bart Decrem says one goal of the launch is to incubate new characters that can cross over into other Disney business units like movies and merchandise.

"Maybe five years from now, wouldn't it be great if there was a movie that started up on the App Store?" Decrem said.

He said mobile devices are becoming central to kids' lives and Disney wants to make sure it is there.

"To me, this is where a generation of kids is growing up. And it's really critical for the success of the company that we be there and telling stories and introducing characters to a new generation of kids," he said.

Disney's interactive unit has long been a troubled one. Expensive forays into making video games for consoles such as the Xbox and PlayStation 3 have resulted in big losses.

In the most recent quarter through July, Disney's interactive unit lost $86 million on revenue that grew 27 percent from a year earlier to $251 million. That marked the 11th consecutive quarterly loss since Disney began breaking out results for the unit in late 2008.

Analysts have questioned what Disney is doing in the games business, especially after its $563 million purchase of social games maker Playdom last year didn't help stem the losses.

The unit's new co-presidents, John Pleasants and James Pitaro, have made it a goal for interactive to be profitable in 2013.

The focus on mobile games, rather than console games, is part of what Disney hopes aids the turnaround. Decrem said mobile games take up to a dozen people about half a year to create. That's far less expensive than console games, which can take hundreds of programmers two to three years to finish.

Disney Chief Financial Officer Jay Rasulo told an investor conference in New York on Wednesday one focus of the interactive unit is to deliver products at lower cost. "Clearly, we've got a lot of work to do in this business," he said.

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