VANCOUVER - It was one of the big stories out of E3 when Radical Entertainment and Disney Interactive announced their collaboration on ESPN Digital Games last May. Aimed beyond the traditional gamers' market at the sports channel's 125 million viewers, the lineup could have posed the first real threat to Electronic Arts' hegemony in the sports-game niche. But it won't happen, at least not this year. The ESPN Digital Games pact came undone this week as Radical relinquished the ESPN license.

　　According to Rory Armes, president of Radical Studios, the snowboarding game developed by Radical, ESPN Pro Boarder, will be published by EA, which does not currently have a snowboarding title. Radical is trying to sell the other two games produced for ESPN, a hockey title and a basketball game, to other publishers. A deal must be concluded within days if either game is to hit the shelves in time for the Christmas rush.

　　Disney Interactive spokesman Russell Kelban would only confirm that "Disney's plan to launch ESPN Digital Games is on hold," and the company is actively shopping the license around to other publishers. Given that sports games typically take two years to develop, gamers should not expect any ESPN games under the tree this holiday season.

　　For Radical, the recent changes have had a huge financial impact on the company. Now that the smoke has cleared - the license moving back to Disney, the San Francisco office closed, the staff dramatically reduced - the Vancouver-based company plans to return to its roots as a game developer only, Armes says. The Radical story could have been far different.

　　It helps to see the lost opportunity in a historical perspective, which means going back to 1996 when Mike Ribero, former executive vice-president at Sega of America, approached Radical's founders, Armes and Ian Wilkinson, with the idea of taking the company to the next level and publishing its own line of sports games. According to Armes, Radical had already developed the successful NHL Powerplay published by Virgin, along with hits such as Independence Day. After failing to come to a deal with either Virgin or Nike (to license the apparel company's brand), Ribero cut a deal with then-Disney Interactive head Steve MacBeth that would see Radical put out sports games under the brand of its subsidiary ESPN. Disney would become a shareholder in Radical and provide marketing money, and Disney subsidiary Buena Vista Home Entertainment would distribute the games.

　　Just two months after the deal was sealed in August, 1997, MacBeth was replaced by senior vice-president Jan Smith. Disney Interactive then changed its tune and backed away from investing in games, shifting instead to merely licensing the brands it controlled, Armes says. Disney withdrew its marketing funds for ESPN Digital Games, leaving Radical with three games that cost in the neighborhood of $6 million to produce and no way to distribute them.

　　Radical was left out in the cold - with games complete or close to complete but working with a hollowed-out game plan. Ultimately, Radical responded by closing down the office Ribero had set up in San Francisco and laying off its 60 San Francisco-based employees - including marketing staff and a team working on an ESPN baseball title. Ribero himself has left the company, according to Armes.

　　The Vancouver operations, up to 220 staff members last spring, has suffered layoffs and defections, but remaining shareholders Armes and Wilkinson plan to pick up the pieces. They will have to survive on the income generated by a repackaged Pro Boarder (meant to play like an ESPN Xgames broadcast, the game's front end will have to be substantially redesigned) and their two non-ESPN titles, Jackie Chan and Manhattan.

　　More on the evolution of Radical Entertainment, and the final destinations of it titles, as we get it.