Disney game division loses $115 million

Despite layoffs, Mouse House's interactive arm reports major quarterly shortfall despite slight uptick in revenues.

by

The January-March quarter was a rough one for the Walt Disney Company's Interactive Media group. The division reported a three-month shortfall in operating income of $115 million, an increased loss from the $55 million deficit it reported during the same period in 2010. The shortcoming came despite a slight uptick in revenue, which rose $4 million to $159 million for the quarter.

The January-March quarter was a grim one for Disney's Interactive Media group.

Interactive Media losses were even higher for the six months ended April 2, 2011. During that period, the division lost $128 million, nearly double the $65 million it lost during the same time frame the year prior. Revenue was $508 million, up year-on-year from $376 million.

Part of the reason for the Disney Interactive Media group's deepening losses was a $34 million accounting charge relating to the purchase of Playdom. Last July, the multimedia conglomerate purchased the casual online gaming portal for a whopping $563 million.

Disney's January-March shortfall comes despite the fact the company trimmed the division's payroll significantly during the quarter. In January, the corporation closed Vancouver-based Propaganda Games, the internal developer behind the reboot of Turok and the Tron: Legacy film tie-in Tron: Evolution. Shortly thereafter, the company also culled nearly 350 positions inside the Interactive Media group, including Disney Interactive Studios and Epic Mickey-maker Junction Point Studios. The layoffs continued in March and, most recently, affected Split/Second developer Black Rock Studios just last week.

Overall, the Walt Disney Company saw $942 million in net income on $9.08 billion of revenue for the January-March quarter, the second of its fiscal year. Six-month net income was $2.24 billion on revenue of $19.79 billion for the half-year.

Discussion

55 comments
wollettl
wollettl

Hey Disney - Publish Epic Mickey on X-Box - that might help. I want to play this game on X-Box - please!!

Ex-DarkBlade
Ex-DarkBlade

@AgentRebecca, your so called research is flawed. I am a guy and I love Kingdom Hearts. Also I know a lot of other guys that like Kingdom Hearts as well. By the way, Kingdom Hearts is played by guys more girls because most of the people playing Kingdom Hearts are Final Fantasy fanboys. If you really want to know something a game, research every detail.

AgentRebecca
AgentRebecca

@Ex-DarkBlade Well ive never seen anyone else besides teen girls say they liked it, so yea, i comment on what i know and heard and researched.

Ex-DarkBlade
Ex-DarkBlade

@AgentRebecca, you said the game was for teenage girls which is the most stupidest comment I ever seen. I know what I am saying before I comment and if you don't like a game, don't bs about it unless it's worth it.

pakhair
pakhair

Except for Split Second, didn't played a single game of them last year. BTW Split Second was good game and deserves a sequel

AgentRebecca
AgentRebecca

@Ex-DarkBlade What makes you think i never played them? I dont say a game is bad unless i played at least half of it. Know your facts before you dis someone, makes you look stupid.

syafiqjabar
syafiqjabar

@aSchizophrenic Disney don't make the games (except for Disney Interactive Studios), they publish them. @illage2 Are you angry that all the cartoons you enjoyed as a child, are now made for children? Because that's the whole point. Or are you angry that they removed all the violence, rape and necrophilia from fairy tales and classic story (like how the Prince did not rape the sleeping Princess in Sleeping Beauty, which was how the original story goes)? Becaue if you want to see those things as a kid, you are probably disturbed.

Sepewrath
Sepewrath

@CaptainHerlock Exceptions like Arkham Asylum doesn't disprove the last decade of the terrible treatment that license products have been getting. And GoldenEye came out at the tail end of a point where license games had every chance of being great. And yes I say "most people" as gamers are included among most people, don't mistake the Gamespot forums as representative of the entire game audience. I wouldn't say there is some committee mindset about making games easier for people who aren't interested, I think it has more to do with the kind of market that we are currently in. Its a blockbuster market and games not viewed as blockbuster candidates don't get the resources. Most companies aren't going to risk a lot of money on a license game that probably wont sell regardless. AA was a hell of a risk to put that kind of money into a license that hasn't seen a good game since the SNES. While I did single out the internet in regards to the Marvel purchase, because it has the loudest voice, the comment represents everyone. People are generally skeptical of change, especially things they are passionate about; that is just the human condition. Yes Disney's gaming division is relatively new, but Disney hasn't gotten where they are in the entertainment business by flying blind. It would be hard to believe that they don't have gaming minds on the payroll to nurse them into the industry.

Ex-DarkBlade
Ex-DarkBlade

@AgentRebecca, why don't you play the games before you talk.

Ex-DarkBlade
Ex-DarkBlade

@illage2, lol. Without Disney, your childhood must have sucked for the most part.

ssjfuturetrunks
ssjfuturetrunks

Disney: "Oh no we're losing money because we fail at gaming, better call Square Enix so they make Kingdom Hearts 3 then we'll just slap some Disney characters in there and share profits"

zidan4000
zidan4000

serves them right, that is because they make sucky games, the only games i bought from them are kingdom hearts 1,2 and toy story 2 on psx , i remember having a blast with that game, why don't they produce platformers like that anymore? and doesn't it sound like a good time to give us news about kingdom hearts 3? i know you wanna do it , just do it and we will buy it.

ToTs_00
ToTs_00

If you want to make some money in game industry Disney why don't you let Capcom make another Duck Tales game in the style of Mega Man 9.

keybladegamer
keybladegamer

Seriously, the only disney game besides kingdom hearts I have bought this decade is Epic Mickey. They need better games... may I suggest Epic Mickey 2 and Kingdom Hearts 3?

hasancakir
hasancakir

Just make Kingdom Hearts 3 as soon as possible!!!

AgentRebecca
AgentRebecca

Disney is only good for their movies...and i know Disney isnt involved in making this, but i hate Kingdom Hearts...its a game for 12-16 yr old girls...

paxis85
paxis85

@illage2 i have to admit... with a sweeping statement like that even i'm a little curious as to how Disney could have screwed up your childhood(of all things). there are so many bad things out there and yet disney ruined your childhood???

wwlettsome
wwlettsome

Maybe Disney should get out of the game business. They don't seem to have a clue how to manage it.

jarofdirt882
jarofdirt882

@illage2 I bet that takes a lot of work, given the number of companies that are part of the WDC.

jarofdirt882
jarofdirt882

Hmm. I bet the losses will be used as another excuse for the Disney execs to scurry over to the casual gaming and dump everything else. Anyway, DIS are new in the gaming industry (relatively), if they could concentrate the dev studios on making good games with solid IPs (like Split/Second was, or even a good movie tie in, I know I'm stretching there, but hey we can dream), I'm sure things would turn out pretty well.

sjawz3288
sjawz3288

@illage 2 Dramatic? What happened? Mickey Mouse touch your peepee or something?

illage2
illage2

@revway Yeah, I've grown to hate Disney and refuse to even lay my eyes on anything with Disney's name on it.

revway
revway

@illage2: hahah, brutal.

illage2
illage2

HAHAHA This is good news. I hope the rest of Disney falls. Disney have single handedly destroyed every good childhood memory of mine. Lets hope Disney dies. I hate it.

Shadow_Fire41
Shadow_Fire41

now of course thats not the only reason they are doing badly, its just a example (that im still somewhat pissed about), they also just don't make many good games.

Shadow_Fire41
Shadow_Fire41

Disney, this is why you don't cancel a genuinely good looking game people actually LOOK FORWARD TO (Armada of the Damned) for a sodding movie cash in, for multiple reasons 1. it pisses gamers off when a fun sounding game gets canceled 2. most gamer avoid movie games like the plague 3. the movie games are usually panned by critics. from buisness standpoint, its incredibly stupid. can anyone honestly say they are surprised.

InnerSenses
InnerSenses

I haven't bought a Disney game that I can remember since Toy Story Racer back on PS1... they must only make total rubbish games nowadays...

NColdhardt
NColdhardt

They deserve it. Epic Mickey, and everything they have been releasing for the past decade, turned out to be a great disappointment. @MJ-X: Disney Interactive, their videogame division, plays no role in KH. The only thing KH has from Disney is the permission to use its characters in a way that's "acceptable" to Disney standards.

organbank
organbank

Disney makes games now. Wow I did not know that. Probably why they are tanking. It must be a Nintendo thing I guess. May be they should focus on making a generic shooter with Disney characters. That will sell like hotcakes. All they would have to do is cut and paste the code each year, slap on a new title/box art and presto, insta $$$. There are plenty of idiots out their who are willing to pay good money for the privilage of playing a cut and paste shooter, just look at CoD, BF, Halo etc.

svdbygrce02
svdbygrce02

The game version of movies is terrible 9 times out of 10. Don't even bring that garbage to market

walders
walders

I'm surprised their loses are so small.

MJ-X
MJ-X

Nuuuu give us kingdom hearts 3 b4 u do anything like shutting down the game division, blame it on mickey's latest game with its subpar reviews and gameplay. Edit: Yes i know thats Square Enix not Disney, but they do play a huge roll in its development.

CaptainHerlock
CaptainHerlock

@Sepewrath A "Licence" does not necessarily break a game. Take a good hard look at Batman Arkham Asylum. A "licensed" game that was unbelievably good. I'm sure that many of you have a copy of Goldeneye kicking around somewhere. Again, the problem is there seems to be this committee thinking that you have to make it easy enough for people who aren't interested in video games to be able to pick up and play it. You say "most people" don't pay any mind to who made a game. Gamers are not "most people" as we know. And it wasn't just the internet that there was an outcry over the purchase of Marvel. Many in pop culture circles were livid over the purchase. One thing we have to also remember is that Disney's game division is still relatively new. You might not get it right the first time, but that doesn't mean you're not going to get it right at all.

Sepewrath
Sepewrath

@CapyainHerlock I don't think a name change is going to do it for products like Tron, like the one poster said, they don't put in the resources necessary to make a competitive game. These license games are bad and everyone knows their going to be bad. Its not the publishers name that is dooming a game like that, its simply being a license game that is dooming them. And when it comes to something like Split/Second, I also wouldn't attribute that to Disney. I think in reality, among the general public, most people pay no mind to who made the game. You cant even take the outcry over the Marvel purchase to heart, because the standard routine on the internet is any changes to the status quo means everything is going to suck from now on. I don't think the Disney name is hurting it, S/S just came out at a time where racers are not really relevant anymore. If you don't have the name of an established IP on the box, your in for an uphill fight. Disney had multiple studios not for the sake of protecting the IP that was coming out under those studios, they did it to protect their image. They didn't want Disney associated with non family friendly entertainment, hell they passed off Nightmare Before Christmas to Touchstone. They don't have the stick jammed up there quite so far anymore, so I don't think the need the buffer for their sake or the sake the IP. They just need to take some of those billion of dollars Mickey keeps in his piggy bank and put it into their game division.

kiramasaki
kiramasaki

Looks like its time Kingdom Hearts 3 came out.

Darkmoone1
Darkmoone1

This is what happens when you make a horrible game and slap a famous name on the cover just to see how much money you make.

aSchizophrenic
aSchizophrenic

Disney cannot make games.. It's Disney. Pixar should try getting into the gaming business, and they should make an awesome campaign game with a great storyline that is NOT based off a movie. With Pixar's great creativity they could create one hell of a game.

CaptainHerlock
CaptainHerlock

@smoke_dog_4ever You make a number of good points. However I think there's a bit more. Movie tie-ins are often victims of "committee" thinking. The games are designed to be easy for those who normally wouldn't be interested in video games, but interested in say the movie Iron Man (just using it as an example). If anyone out there who's played Split Second, they will be able to tell you that this is a VERY good game. It has a few drawbacks, what game doesn't? However the end product is very strong. What did it do wrong in my opinion? It carried the "Disney" tag. There's something uncool that gamers perceive about Disney. "Disney? Singing animals is so kiddie". Well Split Second is far away from The Lion King as you can get without descending into a killfest. If anyone cares to remember, many comic book "enthusiasts " were saying that Disney was going to ruin Marvel when they purchased the comic book giant. Disney didn't get to where they were by not knowing anything about the entertainment business, contrary to what gamers may believe, and they aren't stupid enough to ruin anything. Disney has the capability to sit down and make a really good game, but I think they should do it under another name. Much like their Miramax and Touchstone movie studios, if the Mouse released games under another name I don't think gamers would be any the wiser. And yes I do hate having valid points given a "thumbs down!".

smoke_dog_4ever
smoke_dog_4ever

I agree with you though, Disney has its image to uphold. I look at Disney in the same light as I do the producers who get either unknown or non-big name companies to create video games for their movie tie-ins. They don't invest the time and effort to produce triple A worthy work from these companies, and then they wonder why the game is reviewed horribly and nobody buys it. Maybe it's the time constraints with their development cycles - who knows. There are enough big name companies out there, Bungie, Ubisoft, Treyarch, Konami, and many many more who, from the start, were able to produce above average games to become leaders in the production of video games. That's not to say the fault lies in the hands of the people making these games, but when you look at development cycles for Halo, Call of Duty, Assassin's Creed, Resident Evil, Metal Gear, etc, they all have development cycles for their games that are well over a year long, with plenty of time to develop their games. I don't think these movie companies understand this yet - if you want to invest a year and a half of filming to produce a blockbuster film, it takes the same devotion and effort to produce the same quality in a video game these days. Until these companies, Disney included, understand this, I don't think they have any right to hope for better returns on their games.

smoke_dog_4ever
smoke_dog_4ever

@CaptainHerlock don't you hate when you make a good and valid point in response to another person (in this case, king_gamer19) and you come back to find a couple of idiots have given your comment a thumbs down for only God knows what reason? I swear I wish people would have to give a reason for giving a thumbs down. I think people do it just to be an ass.

CorruptGamerGX
CorruptGamerGX

@superokamifan21 After KH: Dream Drop Distance, "other" KH titles, and when Versus XIII is released.

servb0ts
servb0ts

Well Mickey Mouse is still rich lol.

zhuge_liang_
zhuge_liang_

Stop making crappy games. KH:RTS FTW pls!

jakesnakeel
jakesnakeel

This has nothing to do with a recession. It's about big bets with poor outcomes.

shakensparco
shakensparco

And I remember when people thought videogames were recession proof

ale_gamr
ale_gamr

O'well, most of their games were BS anyway. Except for final fantasy and maybe some others... just maybe.

lilrobda1
lilrobda1

Looks like Disney needs the help of Kingdom hearts.....again. lol