Disney Exits 'Infinity' Videogame Business
May 10 2016 - 4:44PM
Dow Jones News
By Ben Fritz
Walt Disney Co. is taking a $147 million charge as it cancels
its "Infinity" videogame line and stops making games for consoles
like Microsoft Corp.'s Xbox and Sony Corp.'s PlayStation.
The company said Tuesday while releasing its financial results
that it would cease publishing "Infinity," which has seen sales
decline for more than a year amid stagnant consumer interest and
growing competition in the "toys-to-life" category, which combines
real-world toys with videogames. Activision Blizzard Inc., which
pioneered the category, said the latest version of its "Skylanders"
toys-to-life game also had disappointing sales. Other competitors
in the category include Nintendo Co.'s "Amiibo" and "Lego
Dimensions" from Time Warner Inc.'s Warner Bros.
Along with the cancellation, Disney is cutting between 250 and
300 jobs, a spokeswoman said, and closing a game-development studio
in Utah.
Disney launched "Infinity" in 2013, at an initial cost of more
than $100 million. At the time it had stopped publishing other
videogames for consoles and made "Infinity" its sole focus going
forward. Since then, sequels featuring Marvel and "Star Wars"
characters have been released.
Going forward, Disney will continue publishing games for mobile
devices and will license its characters to other companies to make
videogame for consoles. Electronic Arts Inc. last year had a
success with "Star Wars: Battlefront," based on a Disney
license.
"After a thorough evaluation, we have modified our approach to
console gaming and will transition exclusively to a licensing
model," Disney consumer products and interactive chairman James
Pitaro said in a statement. "This shift in strategy means we will
cease production of 'Disney Infinity,' where the lack of growth in
the toys-to-life market, coupled with high development costs, has
created a challenging business model."
Write to Ben Fritz at ben.fritz@wsj.com
(END) Dow Jones Newswires
May 10, 2016 17:29 ET (21:29 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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