Software publisher Activision has announced the establishment of a new development studio on the campus of movie studio DreamWorks Animation, forging an unprecedented collaboration between the two industries.

The move follows the signing of a multi-year, multi-title partnership between the two companies, granting Activision the exclusive video game rights to all current and future console platforms, PC, and handheld devices for DreamWorks' upcoming CG feature films.

Robert Kotick, Activision chairman and CEO, commented: "This announcement marks an unparalleled step in the convergence between Hollywood and video games. For the first time, we will be able to align our games' production schedules with the movies' from the pre-production phase onward."

"This will allow us to fully leverage the movie assets and storylines, in addition to collaborating closely with the talented production teams at DreamWorks to develop storylines that expand the movie experience in new and compelling ways," Kotick concluded.

According to Activision, the DreamWorks partnership has generated more than USD 300 million in videogame sales to date, the long term agreement extending the publishers rights to create games based on Shrek The Third and any potential future films in the Shrek Series. The deal also includes forthcoming releases from DreamWorks such as Bee Movie, Kung Fu Panda, Rex Havoc and How to Train Your Dragon.

"We're excited to have the game designers and film creators exchanging ideas on a daily basis," added Jeffrey Katzenberg, DreamWorks Animation CEO. "We hope to create an immersive atmosphere that will help us continue to produce the finest in cutting-edge video games with Activision."

Activision has also announced its acquisition of Guitar Hero publisher RedOctane, and will be presenting its latest product line-up - including multiple next-gen titles, at the E3 Expo in Los Angeles.