Broderbund Software, the mass-market software giant, said yesterday that it has licensed for distribution two new children's software programs from Capitol Multimedia, a Bethesda-based producer of interactive children's software programs.
Novato, Calif.-based Broderbund is the second major software distributor to license programs that Capitol Multimedia, a small, publicly held company, has created. Last year, Davidson & Associates, also based in California, struck a similar licensing deal for Magic Tales, a line of cinematic-quality interactive computer stories based on folk tales and targeted at young children.
Capitol Multimedia's stock closed yesterday at $4.50 a share, up 62.5 cents.
"This confirms our strategy of producing high-quality children's programs and licensing them to others to handle distribution and sales," said Robert Bogin, Capitol Multimedia's president and chief executive officer.
The Broderbund deal, he said, "proves we can produce a diversity of programs."
The two software programs Broderbund has licensed are what the industry refers to as "kid adventures." The two software titles licensed are "Gregory and the Hot Air Balloon" and "Darby the Dragon."
Mr. Bogin said both have cinematic quality, cartoon-like characters and settings which were created by Capitol Multimedia's cadre of artists at a subsidiary in St. Petersburg, Russia. The programs, he said, require the user to become involved in helping the central character complete a quest.
Eric Winkler, Broderbund's marketing and promotions manager, said the company licensed the two titles because of their impressive quality and depth, which children would find engaging.
"The quality of the programs are really close to something you would see on TV or the big screen. It's that good, which is unusual in this business," Mr. Winkler said.
Broderbund, he said, reviews an average of three children's titles from outside producers daily, but few are chosen. About one-third of the company's 75 new software titles last year were child-oriented programs. The company develops many programs itself.
Mr. Bogin said the deal is particularly pleasing to his company because of Broderbund's strong name recognition in the marketplace and because the deal would enable Capitol Multimedia to continue to remain an independent software studio that doesn't have to worry about getting its products on retailers' shelves.
"With this deal, we're broadening our strategy of not being dependent on just one publisher for distribution," he said.
Neither company would disclose specifics of the deal, but Mr. Bogin said Capitol Multimedia, which had sales of $4.6 million during the first three quarters of its current fiscal year, will share a percentage of the sales royalties. Generally, he said, the agreement requires Broderbund to assume distribution and sales costs.
Broderbund, which had 1995 sales of $171.6 million, has some of the best-selling software titles in the country, including "Myst," the "Carmen Sandiego" series and "Print Shop."
But its president, Michael Shannahan, told a group of investors Wednesday that the company expects sales to slump this year as a result of consumer indecision about software purchases as they mull whether to upgrade their computers with Microsoft Corp's new Windows 95 operating software.
Mr. Winkler said it is unclear what age group the Capitol Multimedia titles would be marketed for and when the titles would be released, although they are expected out this year.
Broderbund declined to disclose how many copies of each title it expects to ship to retailers, but Mr. Winkler noted that the company has a network of 19,000 retailers nationwide.
The Capitol Multimedia productions, he said, probably would be more appropriate for distribution to such child-oriented retailers as Imaginarium and Toys 'R' Us.
Broderbund generally prices children's titles at $35 to $40 each. Its name recognition and extensive mass-retailer sales network could give the two titles something of an edge in the market.
But the children's software industry is enormously competitive. Industry analysts expect more than 3,000 new children's titles out this year.