Wednesday, May 11, 2016

Disney Interactive Closing Shop

Disney released their quarterly report yesterday, and in unexpected news the company is closing down their video game division and stepping away from console gaming. Which means no more Disney Infinity. A bit surprising since it was assumed that the release of Star Wars Episode 7 and the subsequent Infinity line of characters would have boosted sales.

According to the report, Disney is taking on a $147 million dollar charge to axe the division. There isn't detail on earnings regarding Infinity in the report, other then "lower results" from what was expected. The toy-to-game market overtook LEGO and Skylanders in December with their last release of product. Before that it was in the top 10 of product sales for several months. Maybe they weren't as high as Disney predicted, but based on the numbers, it seems like Infinity was turning a profit. But that's part of the problem - we don't have the exact numbers. This is all speculation so it could be that the profit was not enough to overcome the cost of production for the figures, and maintain updates to the game.

Just a few weeks ago, Infinity stopped supporting the Apple TV version as the company wanted to focus more on traditional, console gaming. Apple TV currently reaches 123 million adults, and it's a product not seen in standard households. From a business standpoint, I could see why Disney would not want to spend resources on a system that didn't provide much return on the investment as it would with a console. This must have been the start of the death march for Infinity.

Details about the console division closing are limited. The last 2 releases in May and June will continue, but production will stop for additional patches. Disney will still maintain all of their licenses for the products, and may shuck them over to another company (EA) to take over.

I foresee an increase in Infinity figure sales.

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