Why ‘Disney Infinity’ Failed (Commentary)

Disney chased a trend in gaming, but trends change quickly in those parts

Last Updated: May 11, 2016 @ 12:34 PM

Look, “Disney Infinity” was not a flop. It made a lot of money, but not enough money to be worth a continued investment from Disney. It was a failure, but it was closer to the middle of the success/failure spectrum than the end. It was still on the wrong side of middle, though.

“The lack of growth in the toys-to-life market, coupled with high development costs, has created a challenging business model,” Disney Interactive boss Jimmy Pitaro said Tuesday after the discontinuation of “Disney Infinity” was announced. That single sentence pretty much sums up everything about why “Disney Infinity” didn’t work in the long run, but you, like most people, may not know what that means. That’s fine.

Given what Disney had at its disposal — “Star Wars,” Marvel, a million other very famous Disney things — a lot of people are surprised it would come to this so soon. “Disney Infinity” has only been around for a few years, and it trounced its main competition, Activision’s “Skylanders” series. But there’s no single reason why “Disney Infinity” is over and Disney is having to take a $147 million charge on its now-defunct internal console video games division.

So I’ll give you three.

1. “Disney Infinity” required too much of an investment from users.

This was more than just a video game — “Disney Infinity” was intended as a “toys-to-life” gaming platform in itself. What that means is you’d buy a “starter pack” which comes with a game disc and a “portal” that you can use to unlock playable characters and games by placing a collectible figurine on it. You’d mostly have to buy these figurines separately, though the starter pack would include a few. A playable character, purchased separately, might run you $10, while a new “play set” (which would be marketed as an entire new game) would cost about $30. And there were a lot of these things — since “Disney Infinity” was more platform than single game, the bulk of the “Disney Infinity” experience would come from these figurines.

Oh, and it’s not as if just having that first starter pack in 2013 would have you set for life. In addition to the endless parade of figurines and play sets, “Disney Infinity” also got sequel starter packs in 2014 and 2015 that you’d have to buy to make new playsets work. This is a hefty bill for fans, especially since old playsets would not work with new versions of the game.

The problem here is the video game market itself can’t sustain something like this, and it definitely can’t sustain more than one thing like this. The games industry loves to talk your ear off about the gross money they pull in, but what they don’t tell you is that most of that comes from a small group of people. If you look at the Entertainment Software Association’s yearly demographic report from 2015, you’ll realize that the average amount that a person in the U.S. who plays games spends on video game software in a year is around $100. “Disney Infinity” alone demands more than that average.

Unfortunately, it was geared toward children — and children aren’t the demographic that’s propping up the games business with regular large purchases. So to make it work, you have to either suck in gamer whales, or lower overhead.

2. “Disney Infinity” required too much of an investment from Disney.

It’s rare for video game publishers and developers to disclose game budgets, but reports in 2013 suggested more than a $100 million investment just in the first game — which would make it one of the most expensive games ever made. Follow that up with years of playsets and figurines that need physical manufacturing, not to mention the creation of the myriad game experiences, and that’s a deep hole to start in with a business that is not great at digging out of them.

It may have been doomed from the start.

3. “Disney Infinity” was too late.

The “toys-to-life” concept hit the big time in 2011 with “Skylanders,” which quickly became a cash cow for publisher Activision. But “Skylanders” was less involved — it didn’t add entire new games with its physical figurines, just playable fantasy creatures. “Disney Infinity” came two years later, and almost certainly cost much more to produce due to the more complex nature of its monetization schemes and the way its expansions worked. “Skylanders” and “Disney Infinity” aren’t really things that can work hand in hand. Realistically, people who are into this kind of thing are going to have to choose one or the other. Having all this Disney stuff to draw on probably helped it convert some “Skylanders” fans and pull new consumers to the toys-to-life market, but in the long run, as Pitaro said, the lack of growth of that market was ultimately the problem.

It shouldn’t be a surprise that the market stalled. Go on Amazon and search for “Disney Infinity” stuff and it’s a total nightmare to navigate if you don’t know what you’re looking for. It’s a merchandising scheme run amok. And even if you’re already a fan, there’s only so much of these things a regular person can deal with before it gets overwhelming. Sure, nerds love toys, but most of us don’t love them so much that we’re willing to buy them regularly in perpetuity. We all have our limits.

When you add in the very low adoption rate for video game add-on content in general, the picture really comes into focus. It’s become a normal thing for game publishers to commission post-release paid downloadable content for their games, but few people actually buy that stuff. All these “Disney Infinity” figures and play sets are just downloadable content that takes up space in your home, so it follows that you’re not generally going to have the kind of sales you would look for from a new game, even though these play sets technically are new games.

I’m not sure anyone ever really figured out this market. The success of “Skylanders” always kind of always felt more like Activision winning the lottery than the result of genius planning. When Disney entered the space it tried something deeper and bigger, but just because you have more stuff to sell doesn’t mean you’re going to sell a proportionally larger amount of stuff.

Now, toys-to-life is trending downward, and “Disney Infinity” is over. I’m not sure this was something Disney could have avoided.

But it probably was something they could have seen coming a mile away.