Investors and analysts have long awaited a big-bang merger that marries a major media company to one of the better-known video game programmers. Those hopes took a hit this week with

Disney's

(DIS) - Get Report

decision to take up the game challenge piecemeal.

Earlier this year, companies such as

Viacom

(VIAB) - Get Report

and

News Corp.

(NWS) - Get Report

were rumored to have their eyes on the big game publishers. But instead of buying companies such as

Electronic Arts

(SYMBOL)

and

Activision

(ATVI) - Get Report

, the big media firms may be following the different, cheaper strategy inaugurated by Disney.

"That's proven to be the best way to expand," said David Cole, president of the industry research firm DFC Intelligence. "It's a smart, conservative strategy."

Disney, which

announced Tuesday that it has acquired a small developer and announced that it was setting up a new game studio in Vancouver, looked into buying one of the big game publishers, said Angela Emery, a spokeswoman for the company's Buena Vista Games division. But most of the public companies appeared expensive, she said. Disney already had some 10 years experience in the game space and decided it would be a better bet to simply build up its own effort, she said.

"We think that's obviously fiscally more appropriate to what we want do," Emery said.

Disney's move follows a similar one by

Time Warner's

(TWX)

Warner Brothers division. Last year, Warner set up its own games division and jump-started it last fall by buying up the private developer behind its upcoming

Matrix Online

title.

The other media companies seem to be assessing the situation similarly. Despite their apparent interest in the video game space, none has pulled the trigger on a major acquisition, even to buy up a lower-tier publisher such as

Eidos

(EIDSY)

, which put itself up on the market

months ago.

Viacom Chairman Sumner Redstone, for instance, has said that all the major media companies will likely acquire game companies. While Redstone himself has been

buying up shares of

Midway Games

(MWY)

, Viacom has yet to make a move, instead choosing to dabble at the edges of the game market by licensing out its content to game developers and licensing game content for use in movies.

"We continue looking at the space," said company spokesman Carl Folta. But in terms of buying one of the big game companies, "nothing has presented itself up to now," he added.

The media companies have been interested in the video game space for decades, ever since Warner bought Atari in the 1970s. But they have consistently struggled to make money in the game market, often investing heavily in game properties before either closing them down or selling them off.

Still, the media companies have been determined to tap into the market one way or the other. With young people increasingly choosing to play games or surf the Internet instead of watching TV shows or listen to CDs, media programmers risk losing their most important audience and customers. Meanwhile, those companies continue to be enticed by the expanding market for video games.

The big impediment to big acquisitions is likely the

big price the major game publishers would command in any acquisition. Even after a sharp

selloff in recent months, Electronic Arts, for example, still has a market capitalization of $15.5 billion. Though it too has seen its stock slide of late, Activision commands a nearly $3 billion valuation, and its stock is still up more than 29% in the last year.

Even lower-tier players such as

Atari

(ATAR)

or Midway would cost hundreds of millions of dollars to acquire.

"If you look at the valuations on a lot of those companies, it makes them real difficult to swallow," said Cole.

In contrast with that prospective outlay, Disney spent less than $50 million for both of its new game studios, and it plans to invest some $40 million this year in its game efforts, Emery said.

"It's just expensive to buy. It's not expensive to build," said Michael Pacther, who covers the video game industry for Wedbush Morgan Securities.

Indeed, the video game publishers have been going that route themselves. Earlier this year, for instance,

Take-Two Interactive

(TTWO) - Get Report

bought Visual Concepts Entertainment and its subsidiary Kush Games, the studios behind its

ESPN

line of sports games. And Activision

purchased the developer behind its

Spider-Man 2

game. EA and Midway have made similar moves in recent months.

The game publishers have had success making such acquisition, and they are certainly cheaper than buying a big publishing company. But that doesn't mean that strategy is the right one for the big media firms. Indeed, the media companies have tried this route before -- and generally fared poorly, Pachter noted. This time around will likely be no different, he said.

"They will all fail, because it's harder than they all think it is," he said.