As the chief operating officer for product development for worldwide studios at Vivendi Universal Games (which, it must be noted, excludes Blizzard Entertainment), Peter Della Penna oversees all external development, internal support, quality assurance, customer service, and finance and other business-related product development activities for the game division.

　　GameSpot spoke with Della Penna shortly after the news that VUG had acquired its longtime development partner Radical Entertainment.

　　GameSpot: It sounds like, without your OK, something like this would never have happened. Is that correct?

　　Peter Della Penna: I was a big part of this.

　　GS: From the beginning?

　　PDP: I believed it was an important, strategic acquisition for the company. I pretty much championed this acquisition from beginning to end.

　　GS: What was it about Radical that made it so appealing to you?

　　PDP: They have scale. They have four teams, they have a terrific track record, and they have a development process that allows them to be creative and produce quality games in a timely and efficient manner--which in the game space is becoming more and more critical.

　　GS: Any impact on external studios you are working with today?

　　PDP: We will not pull work back.

　　GS: How do you integrate Radical's strengths into the VUG family of studios?

　　PDP: It complements our strategy of franchise building. And to have that control in-house, and to have the same continuity from the first game to the second game to the third game, it's much more efficient, and it allows much more consistency with the consumer and product development.

　　That's why we will move towards more internal console development. That doesn't mean we will not have relationships with external developers. We'll always need to look for new IP, but we, ourselves, will not be the sole source of new IP. But we have our franchises that we know are established, so it makes a lot of sense to put them with folks like Radical.

　　GS: Are you hearing a lot pitches at VUG?

　　PDP: I can tell you there's a lot of activity. I don't think that there's any less than there was a year ago. I think that it's still very robust.

　　There are a lot of creative people out there, with a very hungry desire to have the next big game, and they look to Vivendi Universal Games as an opportunity to publish some of these new ideas.

　　GS: Was this a tough sell up into the corporate suite?

　　PDP: No, I don't think that it was. Naturally there was some concern, there was some scrutiny. But in the end, this is a business that Vivendi Universal believes in. The games business is one that is growing. It's an attractive place to be, and the reasons for the poor financial performance of the past were understood, which led to much of the divestitures that we've had in the past.

　　We've realigned our strategy. And with that new strategy, Radical is a piece of it.

　　GS: The theory for bringing this work in-house is...

　　PDP: Relying on external development is not a cost-efficient way of developing games, nor is it good for franchise building. If you have an external partner develop a game for you, you're in competition at the end of that development cycle to do their next project. If they do something really good for you, then you've got to compete with other people who will want that team. If they don't do a good job for you, then, yeah, sure, they still want to work for you, [but] why would you want to work with them?

　　When you find a developer such as a Radical, [it's] a natural fit for IP that we control. It then makes a lot of sense for us to have more control of our destiny. And in the end, in the long run, that improves our economics.

　　GS: How important was the technology that Radical owns, in terms of your motivation to acquire them?

　　PDP: It's very important. When you rely upon external developers, you're paying them for that technology. And then on the second generation, you end up paying them again. When you own that technology and control it, you have the ability to leverage that across subsequent games, or over to new games.

　　GS: And how do you see this acquisition in terms of its message to the industry, to the investment community, and to the retailers?

　　PDP: It says a few things: One is that VU is committed to Vivendi Universal Games. I think that our financial performance improvement, which we have had in 2004 and 2005, will continue.

　　With the divestitures of last year, and the acquisitions and the redirection of our strategy, what is apparent to the public now is that we're more committed than ever, and we're in a much better position to compete.

　　GS: So console games are the new king at VUG, yes?

　　PDP: Historically, going back several years, we've been a PC publisher. We dabbled in console in the current-gen business to an extent, but not like our competitors--and we've done that primarily through external development.

　　We've realigned the company to focus on console. The PC market is not growing as much as console so the opportunity is in the console market. But our company was not aligned to exploit that. With divestitures, we've gotten out of that business. Now we're refocusing on the console market...the acquisition of Radical shows that we have a commitment there.

　　GS: The general future holds what for VUG?

　　PDP: I think we will see more internal development within VUG in the future. And as we build console capacity scale, it will allow us to have more and more efficiencies in with our development processes. And the sharing of technologies will make us that much more competitive in the future.

　　GS: By the way, how are you reading the PSP launch this week--and the potential upside for the industry, and specifically VUG?

　　PDP: I'm bullish on it. But to be objective, we're bullish but we're taking a cautious approach. We have some very select IPs that will be there at launch, and we're ready to move into that space. But before too big of a commitment is made, we'll see how the launch goes.

　　GS: Are there any more acquisitions on the way?

　　PDP: I would like to think so.

　　GS: Thanks, Peter.