Disney Shuts Down Console Video Game Publishing Arm, Cancels ‘Disney Infinity’

The company admits the business is worth less than it hoped, swallowing a $147 million charge

Disney Infinity Marvel

Disney’s stint as a publisher and developer of console video games  is over, the company announced in its quarterly report on Tuesday.

“After a thorough evaluation, we have modified our approach to console gaming and will transition exclusively to a licensing model,” read a statement from Disney Consumer Products and Interactive Media boss Jimmy Pitaro that was given to TheWrap. “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.  This means that we will be shutting down Avalanche, our internal studio that developed the game.  This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans.”

Disney Interactive Studios, and its subsidiary Avalanche Software, was primarily responsible in recent years for the “Disney Infinity” line, a sandbox-style video game for which players could purchase small figures that would unlock new playable characters and activities within the game. It was a Disney-branded attempt to, in 2013, replicate the success of Activision’s “Skylanders” game which functioned in a similar way.

“Disney Infinity” existed both as a game and a platform in itself, promising seemingly endless potential for expansion through the sale of those figures and play sets.

A Disney spokesperson told TheWrap that Disney’s mobile games division will continue to operate as-is, both developing and publishing games for iOS and Android devices.

Disney CEO Robert Iger said the quarterly earnings call that the company no longer felt comfortable operating as a video game publisher. “We just feel that it’s a changing space and we’re just better off at managing the risk that that business delivers by licensing rather than publishing,” Iger said. He also noted that while “Infinity” was well received at launch, the risk inherent in an evolving games space did catch up to the company.

Despite a sizable investment for a video game and piles of Disney characters to exploit, including Marvel and “Star Wars” heroes, “Disney Infinity” never quite took off the way the company had hoped — “Disney Infinity” was intended as a platform that could operate in perpetuity for years or even decades, but is being ended just under three years since it launched in August 2013. Disney is taking a $147 million charge on the discontinuation of its internal console games business.

Disney Interactive’s video game lineup has consisted mostly of tie-in properties since it was founded in the late ’80s, with few exceptions in the last decade, such as the racing games “Pure” and “Split/Second.” Since “Disney Infinity” launched in 2013 it’s been the primary focus for Disney’s games division.

“Disney Infinity” still has two remaining releases on the schedule, summer tie-ins for “Alice Through the Looking Glass” and “Finding Dory,” and according to a post on Disney Interactive’s blog those sets are still on the way and will hit retailers in June.

Though Disney will no longer publish console games based on its properties, tie-ins will still be produced by third parties through licensing deals.