Big news hitting the Magic Kingdom, as Disney Infinity has been officially cancelled.
The first notification of the cancellation was through twitter. Journalist Ben Fritz noted that not only did Disney cancel the Disney Infinity line, but also took a huge loss for the entire project; a $147 million dollar charge.
Disney cancels struggling Infinity video game line. Takes $147 million charge. End of Disney as video game publisher.
— Ben Fritz (@benfritz) May 10, 2016
That $147 million charge refers to an inventory write-down, found on the recently released Fiscal Year report for 2016 by Disney. Including severance and other asset impairments, the charge was reported as a “Cost of Products” in the Condensed, Consolidated Statement of Income.
An official post on Disney Interactive’s website by John Blackburn confirmed the news, thanking fans of the Disney Infinity line for their support and enjoying their products. “Our goal for Disney Infinity was to bring the best of Disney storytelling to life in homes around the world,” states Blackburn. “With your support we accomplished that. We hope you had as much fun playing the game as we had making it.”
Blackburn notes that the final Disney Infinity sets, based on the upcoming movies Alice: Through the Looking Glass and Finding Dory, will be released from now to the end of June.
Disney itself also confirmed that they will be pulling out of console gaming development, and shutting down Avalanche Software, the team behind Disney Infinity. “After a thorough evaluation, we have modified our approach to console gaming and will transition exclusively to a licensing model,” states one spokesperson according to GamesBeat. “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. This means that we will be shutting down Avalanche, our internal studio that developed the game. This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans.”
It should be noted that Disney Interactive has faced major job losses before. Variety noted in 2014 that Disney Interactive cut 700 jobs from the company, roughly 26% of their total in-house workforce, despite the success of Disney Infinity at the time. According to those same reps, Disney Interactive planned on restructuring their entire company, focusing on mobile and social game releases, while licensing other titles to “development partners,” including Electronic Arts who have seen big returns thanks to games like Star Wars: Battlefront.
The news is apparently a major shock, as Disney Infinity 3.0 was apparently selling well. According to Fortune, Disney Infinity 3.0 received a major boost in sales thanks to the introduction of Star Wars figures to the toy-to-life line, in particular, the Force Awakens Box Set generated an estimated $200 million in sales last fall. However, Disney’s toy and gaming division saw a 2% decrease in revenues, down to $1.2 billion, and an 8-percent hit to its operating income, which was down to $357 million, according to a recent Fiscal Year Report. In the consumer products (read toy and gaming) most of that was marked to Disney Infinity while noting licensing had done very well.
We have reached out to Disney for more information, including what will happen to games and their playability going forward. We have not heard back from them at this time but shall update the story when we have more information.
So this is big news, what do you think about it? What do you think this means for the Toys to Life Market? Share your thoughts in the comments below!