Disney Interactive likely to invest less in console games following $234M loss
Losing $234 million over the course of 12 months is pretty unimaginable to most individuals. For Disney, it's not such a big deal, especially when that loss is recorded by just one of its six company divisions -- the other five all profited over the last fiscal year (ending October 2, 2010), including its Media Networks, which pulled in more than $5 billion in operating income (profit excluding interest payments and income taxes). Unfortunately for gamers, that one bad division was Interactive Media. Uh-oh.
"On one side we've got a collection of games businesses," Disney CEO Bob Iger explained of the Interactive Media division to investors during a call this week, "and the other side we have a collection of largely dot-com businesses." For both the fourth quarter and entire fiscal year, Interactive's revenues actually increased marginally over the previous year's earnings, and "operating results" were "improved" (meaning: the division lost less money -- perhaps unimaginably -- in fiscal 2010 than in the previous fiscal year). Still, when you end up $234 million in the hole, something's gotta change. A new Toy Story game (the division's big breadwinner for the year) can't be released every year, after all.
Reflecting on a "pretty big shift" in the games industry, in which "everything from mobile apps to social networking games" has become a player, Iger said of Interactive, "It's our goal not only to be profitable, but obviously to get there by shifting our investment and reducing our investment, too." You know what that means: "We probably will end up investing less on the console side than we have because of the shift we're seeing in consumption [...] Consumers are obviously spending time playing games -- from casual games online to mobile apps to social networking to console -- and we felt all along that we need to be where the consumer are [...] we want to be there." No doubt.
Quick -- everybody go buy Split/Second before it's too late! Like, for real this time.
