Disney announced today that it would be discontinuing its Infinity video game line and shutting down its internal studio, Avalanche Software.
In a statement, Disney's chairman of consumer products and interactive media, Jimmy Pitaro, said they have changed their approach to console gaming and would be transitioning "exclusively to a licensing model." Part of that change means that Disney would be closing its Avalanche Software studio, putting close to 300 people out of work, but Pitaro said it was a decision the company did not make lightly.
"This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans," Pitaro said.
Disney will take a $147 million charge to offset the cancellation and was primarily taken from an inventory write-down. Other factors, like severance for employees and other assets, were also taken into the costs. The news follows reports that Disney missed its Wall Street estimate for annual revenue and earnings, leading to a 6 percent drop in stocks during after-hours trading.
During an earning's call following the news, Disney CEO Bob Iger explained why the company decided to drop completely out of the game development business.
"We thought we had a really good opportunity to launch our own product in that space; the console space, but also the toys to life space," Iger said. "In fact we did quite well with the first iteration and did OK with the second, but that business is a changing business and we did not have enough confidence in the business in terms of being stable enough to stay in it."
Iger pointed to the loss the company took when they shuttered the game, most of which was due to the still existing inventory of toys, as a prime example of that risk.
"We just feel it is a changing space and that we're just better of managing the risk of that business by licensing instead of publishing," he said. "We made a good product. I give the developer a lot of credit for the product they made.
"The truth of the matter is that the risk we cited when we initially started this finally caught up with us."
In March, vice president of Disney Interactive, John Vignocchi, told Polygon that while the company wouldn't be investing in another major update to the line this year, the company was still behind the franchise.
"The company has been completely behind Disney Infinity. If you look at all of the creative content coming out this year, you can see they are still proud and still 100 percent behind us," he said.
Despite Disney's success in other markets, including its enormous film universe, an earnings report from earlier this yearshowed that its Infinity line hadn't been performing as well as the company expected it to. Still, Vignocchi told Polygon that with Marvel, Pixar and Star Wars being added to Disney's universe, the line was still safe.
"Disney Infinity will support all of the major events and theatrical releases at Walt Disney in 2016," Vignocchi said. "This year we will release four new playsets, each introducing unique gameplay for the platform. Each of the playsets will represent new content from our core properties."
On the Disney Interactive blog, John Blackburn, senior vice president and general manager of the Infinity franchise said that from the beginning, the goal of the company and the line was to create a community that made Disney Infinity feel more like a game. Blackburn said that through the efforts of their team, they felt like they accomplished that goal.
Blackburn said that there would be two final releases from the line, including three more chapters from Alice Through the Looking Glass and the Finding Dory playset in June.
Disney has not yet announced its plans for support of the titles moving forward beyond general statements that nothing will change in the immediate future. Details on the game's sun-setting are expected to be announced in the future.