DreamWorks Pulls Out of GameWorks

DreamWorks SKG is parachuting out of the video arcade business, fleeing GameWorks, the company that Steven Spielberg helped found six years ago as a showcase for his passion for designing arcade games.

GameWorks struggled to become a profitable business, quickly expanding and then retrenching. Last fall, the company landed in the middle of a firestorm when Washington politicians chided Hollywood for marketing violent entertainment to children. GameWorks responded by restricting its most violent games to those 16 and older.

Sales at the 13 arcade/restaurants, including three in Southern California, increased 10% during the last six months, with revenue up $10 million, company officials said.

DreamWorks has a 9% interest in the company. After the break-up, which should be complete this month, Sega Enterprises will own about 45% and Universal Studios will have a 35% interest, said GameWorks President and Chief Executive Ron Bension.