|3D modeling and animation software experienced growth in 2004, a trend expected to continue throughout 2005. The 3D modeling and animation segment saw other profound changes in 2004 as well. Alias emerged from the shelter of parent company SGI to go private and shook up the market with a dramatic price cut for Maya, a move that increased unit shipments and overall revenue. Competitor Softimage, own-ed by Avid, followed suit with price reductions, in-cluding a $495 version of XSI. The trend has driven down prices across the board, which is offset by increased unit sales. Price-cutting has been beneficial overall and has spurred sales as artists show a willingness to experiment with new products.
In 2004, several companies hoped to build a high-volume consumer market with CD/DVD-burning products, an idea that originally spurred the organization of Roxio. Pinnacle acquired VOB Computersysteme GmbH, adding CD/DVD-burning products to its arsenal. With OEM deals for its MyDVD products, Sonic Solutions is the venerable market leader. Moreover, Roxio sold its CD/DVD products to Sonic Solutions this year. Despite all this activity, the DVD authoring and audio market segments are forecast to realize only small gains throughout 2007.
Evidence indicates that the 2D graphics segment leads the DCC market, and its dominance is expected to continue through 2006. With its Photoshop products, Adobe has maintained a firm hold on the high end of the 2D graphics and imaging markets, which experienced a rise in digital photography in 2004. Although longtime competitor Jasc remained doggedly on Adobe's heels with its PaintShop Pro product, it has been acquired by Corel, a company unwilling to cede the professional imaging market to Adobe.
All in all, the digital content creation market weathered a difficult period. The decline of world economies had a profound effect on the DCC market, as advertising revenues declined and budgets tightened. Although almost every DCC segment suffered, the trend reversed itself in 2004. Casting an eye on the future, Jon Peddie Research suggests that the DCC market as a whole will continue to rise through 2006, after which time it is likely to begin tapering off.
Kathleen Maher, senior analyst, Jon Peddie Research
Newly separated from parent company DreamWorks SKG, DreamWorks Animation SKG (Glendale, CA) premiered on Wall Street, offering 29 million shares of common stock at an opening price of $28 per share, a price that quickly rose by nearly 40 percent. Raising roughly $819 million, DreamWorks Animation is the first major stock debut to hail from Hollywood since the public offerings of Lion's Gate and Fox Entertainment Group stocks in 1998. DreamWorks Animation shares are trading on the New York Stock Exchange under the ticker symbol DWA. Hewlett-Packard (Palo Alto, CA) revealed that it has signed a three-year extension of its multimillion-dollar agreement with DreamWorks SKG. The new alliance designates HP as DreamWorks' sole preferred technology provider for its core technology purchases. The companies also will collaborate on technology innovations in such market areas as digital editing, digital cinema, and digital asset management. BioWare Corp. (Edmonton, WA), maker of Star Wars: Knights of the Old Republic and Neverwinter Nights, was awarded Game Developer of the Year at the 2004 Billboard Digital Entertainment Awards. The company also debuted its BioWare Online Store at http://store.bioware.com.