Disney Exits 'Infinity' Videogame Business

By Ben Fritz

Walt Disney Co. is taking a $147 million charge as it cancels its "Infinity" videogame line and stops making games for consoles like Microsoft Corp.'s Xbox and Sony Corp.'s PlayStation.

The company said Tuesday while releasing its financial results that it would cease publishing "Infinity," which has seen sales decline for more than a year amid stagnant consumer interest and growing competition in the "toys-to-life" category, which combines real-world toys with videogames. Activision Blizzard Inc., which pioneered the category, said the latest version of its "Skylanders" toys-to-life game also had disappointing sales. Other competitors in the category include Nintendo Co.'s "Amiibo" and "Lego Dimensions" from Time Warner Inc.'s Warner Bros.

Along with the cancellation, Disney is cutting between 250 and 300 jobs, a spokeswoman said, and closing a game-development studio in Utah.

Disney launched "Infinity" in 2013, at an initial cost of more than $100 million. At the time it had stopped publishing other videogames for consoles and made "Infinity" its sole focus going forward. Since then, sequels featuring Marvel and "Star Wars" characters have been released.

Going forward, Disney will continue publishing games for mobile devices and will license its characters to other companies to make videogame for consoles. Electronic Arts Inc. last year had a success with "Star Wars: Battlefront," based on a Disney license.

"After a thorough evaluation, we have modified our approach to console gaming and will transition exclusively to a licensing model," Disney consumer products and interactive chairman James Pitaro said in a statement. "This shift in strategy means we will cease production of 'Disney Infinity,' where the lack of growth in the toys-to-life market, coupled with high development costs, has created a challenging business model."

Write to Ben Fritz at ben.fritz@wsj.com

(END) Dow Jones Newswires

May 10, 2016 17:29 ET (21:29 GMT)

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