Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Tech-news / News/  Disney overhauls troubled interactive unit, lays off 700
BackBack

Disney overhauls troubled interactive unit, lays off 700

Disney now plans to license most of its games to earn additional revenue, says president of Disney Interactive

Disney will continue to make kid-friendly mobile games and short videos for YouTube, Disney.com and elsewhere, said president of Disney Interactive Jimmy Pitaro. Photo: Reuters Premium
Disney will continue to make kid-friendly mobile games and short videos for YouTube, Disney.com and elsewhere, said president of Disney Interactive Jimmy Pitaro. Photo: Reuters

Los Angeles/San Francisco:The Walt Disney Co. overhauled its struggling interactive division in a sweeping reorganization that will reduce the number of video games it develops and alter its advertising strategy to focus more on the fast-changing mobile market.

As part of the revamp, Disney will lay off 700 employees, roughly one-quarter of the interactive division, according to a person with knowledge of the layoffs. A Disney spokeswoman would not confirm the number.

Disney’s games and online division has for years been a persistent money loser and a small but significant drag on a corporate empire that spans movie-making and television to cable network ESPN, theme parks and cruise lines.

As with other major game publishing houses, Disney has been trying to keep up with rapidly shifting consumer preferences and an explosion in mobile gaming worldwide. In 2010, it bought mobile game developer Playdom for over $500 million, an acquisition that has yet to bear significant fruit.

“We are trying to consolidate things and focus largely on the mobile platform," the president of Disney Interactive, Jimmy Pitaro, said in an interview with Reuters. “The industry is moving very quickly in that direction and we’re making that transition."

Last year, Disney Interactive lost $87 million as revenues rose 26% from 2012; the division has lost a total in recent years of more than $1 billion.

In Disney’s fiscal first quarter that ended on 28 December, the unit reported $55 million in operating income.

Disney now plans to license most of its games to earn additional revenue, Pitaro said.

It will continue to develop games and content for its “Infinity" platform, a combination video game and toy line; it has sold more than 3 million copies of the platform globally since its August release.

That line, which echoes Activision Blizzard Inc.’s “Skylanders" product, is viewed as a pivotal element in Disney’s effort to revive the interactive division.

Tweaks upon tweaks

Disney will continue to make kid-friendly mobile games and short videos for YouTube, Disney.com and elsewhere, Pitaro said.

The company also intends to adjust its online strategy and streamline its diverse websites.

It will close two smaller sites, Spoonful.com and BabyZone.com, and revamp Disney.com to use its primary website more as a promotional site for its retail, parks and other businesses.

Disney will continue to generate advertising revenues from Disney.com and will increase the amount of content it produces in conjunction with sponsors, Pitaro said.

For instance, Disney produced a 38-minute video with Google Inc. called Blank: A Vinylmation Love Story. In December, it announced it would make a series of animated shorts with Rosetta Stone Inc. that Pitaro said would be the model for future joint efforts. Reuters

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 07 Mar 2014, 12:04 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App