Disney shutters "Disney Infinity" video game business
Just over one month after Disney discontinued support for "Disney Infinity 3.0" on Apple TV, the company on Tuesday announced plans to abandon Disney Infinity altogether, citing poor financials.
Disney informed stockholders of its decision in today's quarterly earnings report (PDF link), noting the shut down of operations will result in a $147 million charge against company revenue for the second fiscal quarter of 2016.
Disney Infinity launched in 2013, the result of a partnership between Avalanche Software and Disney's in-house publishing studio. Utah-based Avalanche will close its doors as part of the deal. The hybrid game system plays on various Disney franchises and features a mix of software and physical elements, the latter being collectible figures released in "waves." The most recent release, "Disney Infinity 3.0," introduced characters from "Star Wars," ""Inside Out" and the Marvel universe, among others.
"By now you may have heard the news that we have made the difficult decision to discontinue production of Disney Infinity," Disney Infinity SVP and GM John Blackburn said in a blog post. "From the beginning, Disney Infinity was built for you--our fans--and I wanted to take a moment to thank you not just for your support over the years, but for creating a community that made Disney Infinity more than just a game."
An Apple TV version of "Disney Infinity 3.0" debuted last November, with purchasing options including a pricey starter kit that came with Apple's fourth-generation set-top and a SteelSeries Nimbus controller. Disney quietly discontinued support for Apple's platform in March, suggesting the future of Infinity has been in peril for months.
There are two products left in Disney Infinity's pipeline, including this month's release of three new characters from "Alice Through the Looking Glass" and the "Finding Dory Play Set" scheduled to launch in June. A "Peter Pan" set was due later this year, but it appears those products have been canceled.
Disney informed stockholders of its decision in today's quarterly earnings report (PDF link), noting the shut down of operations will result in a $147 million charge against company revenue for the second fiscal quarter of 2016.
Disney Infinity launched in 2013, the result of a partnership between Avalanche Software and Disney's in-house publishing studio. Utah-based Avalanche will close its doors as part of the deal. The hybrid game system plays on various Disney franchises and features a mix of software and physical elements, the latter being collectible figures released in "waves." The most recent release, "Disney Infinity 3.0," introduced characters from "Star Wars," ""Inside Out" and the Marvel universe, among others.
"By now you may have heard the news that we have made the difficult decision to discontinue production of Disney Infinity," Disney Infinity SVP and GM John Blackburn said in a blog post. "From the beginning, Disney Infinity was built for you--our fans--and I wanted to take a moment to thank you not just for your support over the years, but for creating a community that made Disney Infinity more than just a game."
An Apple TV version of "Disney Infinity 3.0" debuted last November, with purchasing options including a pricey starter kit that came with Apple's fourth-generation set-top and a SteelSeries Nimbus controller. Disney quietly discontinued support for Apple's platform in March, suggesting the future of Infinity has been in peril for months.
There are two products left in Disney Infinity's pipeline, including this month's release of three new characters from "Alice Through the Looking Glass" and the "Finding Dory Play Set" scheduled to launch in June. A "Peter Pan" set was due later this year, but it appears those products have been canceled.
Comments
amiibo makes Nintendo a ton of money but strangely Disney is better at marketing their own characters. Most Nintendo characters are no where near as popular as Disney's.
A lot of kids think R.O.B. Is Wall-E for example and the rumored dual lens iPhone camera always gets compared to the Fururama robot but never R.O.B. Even though they look identical.
Point being: How the hell did Nintendo beat Disney?
http://www.disneyinteractive.com/news/games-apps-news/frozen-free-fall-celebrates-100-million-downloads/
When they took over LucasFilm, they shuttered the games studios:
http://kotaku.com/disney-shuts-down-lucasarts-468473749
They seem to have a very scattershot approach to this industry, low risk investment, mimicking already successful ventures and high expectations on returns. The high expectations are evident in their films too. There was a report saying Star Wars the Force Awakens was expected to make $1.5b for it to be considered a success with shareholders:
http://www.eonline.com/news/723742/star-wars-the-force-awakens-must-earn-1-5-billion-to-be-considered-a-success-and-the-burden-terrifies-j-j-abrams
Abrams did a great job with it and it exceeded that but Disney, like Apple is being put under pressure to keep consistently delivering huge financial results.
This studio closure means 300 people out of work. This keeps happening in the games industry because the ongoing costs are high and there's little chance for recurring revenue. That studio could easily cost over $20m a year to run. Epic games said recently that they'd have been bankrupt 3 times if it hadn't been for licensing their Unreal engine. When Irrational Games shut down, it put 75 people out of work. Some went to form small indie game studios, getting funded via KickStarter:
http://www.themolassesflood.com
https://www.kickstarter.com/projects/molassesflood/the-flame-in-the-flood
https://www.kickstarter.com/projects/perceptiongame/perception-3
Being financially independent and privately controlled is the best way for games developers to be. That's true of any company but the games industry is very unstable. There's movement towards smaller teams, smaller and more replayable games. Disney/EA has taken this approach with Star Wars Battlefront. It's a multiplayer shooter with a dozen maps and they charge $60 for it. It worked and they sold 14 million copies. This will be a billion-dollar franchise if it's not already and the second version is confirmed:
http://www.gamespot.com/articles/star-wars-battlefront-2-confirmed-features-content/1100-6439682/
http://www.gamesindustry.biz/articles/2016-05-10-star-wars-battlefront-ships-14m-copies-as-ea-enjoys-phenomenal-fiscal-2016
This was using EA as the developer and publisher and just licensing the franchise out.
Disney owns a lot of franchises and stories but they'll most likely license out titles to coincide with released movies so they'll have to go for productions with fast turnaround times. Standard high production value games take about 3 years minimum to make. For Battlefront 2 in 2017, they just need to make new maps and characters to coincide with the movies Rogue One and Episode 8 and they can charge $60 for it again.
Disney would be better using the mobile platform to appeal to kids. One franchise they own is the Gummi Bears, that could be redone in 3D:
They can license out app development to sell sing-a-longs, story books on tablets, it can be like Nintendo's Animal Crossing. They can also do DuckTales, Kingdom Hearts. I was going to say Winnie the Pooh but they've already revisited that in 2011, I didn't even hear about it. I wonder if Apple had a deal with Disney on this because when iBooks launched, they bundled the Winnie the Pooh ebook with it up until May 2011 and the movie released in July 2011. It didn't do very well though:
http://www.boxofficemojo.com/movies/?id=winniethepooh.htm
Kingdom Hearts is an RPG, which works well on mobile devices as it's more interactive stories vs action. That sold really well for Disney on consoles. They are releasing another one soon:
http://en.yibada.com/articles/122443/20160510/kingdom-hearts-3-release-date-e3-2016-rumors-news.htm
Interactive content is a small part of Disney's revenue (<3%):
http://www.businessinsider.com/heres-where-disney-really-makes-money-2015-1
They probably won't take it very seriously until they figure out a consistent way of making large returns on small investments. Movie production is familiar to them. There's no easy way to consistently translate varied franchises over to games. They can't for example make a multiplayer shooter like the successful Battlefront with Finding Dory characters. They have to figure out in a hit-or-miss way how best to make each franchise into interactive content. This will most likely result in a mixture of more overpriced multiplayer shooters and cloned mobile games with franchise characters.
Infinity was a rip-off. Glad I'm not the only one who felt that.
Nice summary Marvin.
One of Disney's best game cooperation a must have been with Square, back in the days.
For all the hype that gaming gets, it really is a tough industry with only a few players that stay in business for very long.
Apparently things were very badly run after being bought by Disney. They don't seem to know how to run a game-creating studio.
/Looks like I dodged a bullet by accepting another job instead of an audio job there... there's going to be a glut of workers in the audio/visual/gaming industry here for a while.
I may need to pick up a copy of Infinity and a few figures.
My daughter and I played the first three Skylanders games to death. She finally aged out of them. But there's a constant stream of kids growing up, so there will always be a market for this sort of game.