Seven years after launching a stand-alone interactive business
unit, Walt Disney Co. is folding it into a larger sibling.
The media giant is merging Disney Interactive, which produces
video games and online content, with Disney Consumer Products,
which licenses and develops toys and other products based on the
company's intellectual property.
The newly named Disney Consumer Products and Interactive Media
will report combined revenue and operating income starting in the
company's fiscal 2016, which will begin in late September.
Leslie Ferraro, who was named president of consumer products in
May, will be co-chair of the new business unit with Jimmy Pitaro,
currently president of Disney Interactive.
No layoffs are expected as a result of the move, a Disney
spokeswoman said.
The merger, a long-rumored possibility among employees, comes as
the lines between the two businesses have blurred. Disney Consumer
Products is increasingly developing and licensing toys that include
digital technology, while Disney Interactive's flagship video game,
Infinity, features physical toys as a key component.
Disney Interactive long struggled to keep up with trends in the
Internet and video-game businesses, losing a total of nearly $1.5
billion between 2008 and 2013. Last fiscal year, it reported its
first profit, thanks to layoffs and the successful launch of
Infinity. It has stayed profitable since then.
Still, Interactive accounted for just 2% of Walt Disney Co.'s
revenue in the first half of the current fiscal year and even less
of its operating income. Consumer products accounted for 8% of
revenue and 10% of operating income, making it the second-smallest
of five business units.
Ms. Ferraro and Mr. Pitaro will continue to oversee parts of
Disney Consumer Products and Interactive Media that they previously
supervised. A newly created innovation lab, as well as operations
such as accounting and human resources, will report to them
jointly.
Write to Ben Fritz at ben.fritz@wsj.com
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