Disney has laid off 250 employees from its interactive media and consumer products divisions, including members of the Marvel: Avengers Alliance team and other social media games.
Variety reported this morning that various members of the Bellevue, Washington, studio were let go in a massive round of layoffs that affected 5 percent of the company’s digital media and consumer products team. Those laid off were mostly working on the mobile game, and according to Variety, the layoffs mark Disney’s move away from the video game industry all together.
Polygon spoke to a Disney representative, however, who affirmed that the company will "still develop and publish mobile games in-house as well, such as Disney Emoji Blitz and Star Wars Commander. And in console gaming, we continue to manage an incredible slate of upcoming titles for Marvel, Star Wars and Disney."
In May, Disney announced that it would be shutting down its Disney Infinity line of games and closing its in-house studio, Avalanche Software, laying off 300 people in the process. Disney's chairman of consumer products and interactive media, Jimmy Pitaro, released a statement saying that while they were proud of the work they had done over the years, the company would be transitioning to an "exclusively licensing model."
During a conference call with investors, Disney CEO Bob Iger said that while the company wanted to exist within the console space with their own line of product, the lack of sales and interest from consumers caused them to rethink their strategy and approach for the company’s place within the video game industry.
"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."
Today’s layoffs come at a time when Disney is seeing a considerable loss in its consumer products and interactive media line. In its second quarter, the company reported an 8 percent decline in profits to $357 million. The company told investors the loss mostly came from a decline in Frozen merchandise.
Update: Polygon spoke to a Disney representative who reaffirmed that the company was still interested in pursuing projects within the video game sector. The story has been updated to include this new information.