Paramount beat out rival NBC Universal in the race to buy Dreamworks. For $1.6 billion dollars, Paramount will get Dreamworks’ SKG ilm library and the services of David Geffen and Steven Spielberg. About half of the money is in cash, while the other half is an assumption of Dreamworks’ debt. Spielberg will stay with the company as a producer-director, while Geffen will remain chairman.

Spielberg is a well-known film director, having made films like Saving Private Ryan and E.T. Many of those films have served as the basis for computer video games. Geffen formed the Geffen Record Company in his early days. In the mid-80s he went into film production and made films like Beetlejuice and Little Shop of Horrors. In 1994, he teams up with Steven Spielberg and Jeffrey Katzenberg to form Dreamworks. The SKG stands for the first letters of the three partner’s last names.

People will probably remember Dreamworks SKG as the studio that produced the very successful Shrek and Shark Tales movies. Paramount, however, will not get the successful DreamWorks Animation studio because it was spun off into a separate company last year.

The sale of Dreamworks probably won’t affect computer users or video game manufacturers much. Dreamworks had sold off it’s game division, Dreamworks Interactive, to Electronic Arts back in 2000. It still has an agreement with Activision to license movie content for current and future games. This includes Shrek 3 which will be released in 2007. The Shrek 2 video game was the best selling children’s game for 2004.