Analysis: Disney goes to Infinity to turn around gaming unit

Tue Jun 11, 2013 10:52am EDT
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By Lisa Richwine and Malathi Nayak

(Reuters) - When Walt Disney Co introduced its latest video game, Infinity, to the gaming faithful this week at the annual E3 gaming conference, it rented a Los Angeles movie theater to show 30-minute clips of upcoming films and hosted a party with the glitz it usually reserves for its blockbuster movie wannabes.

It shows just how much the company is counting on Infinity - whose players can for the first time mix together characters from Disney's different franchises - to help turn around one part of the media giant that stubbornly refuses to turn a profit.

Since it was created in 2008, Disney's interactive division, which houses its video game and online properties, has chalked up losses in 13 of its 14 quarters, compiling $1.1 billion in total operating losses in that time.

The division will likely not turn a profit this fiscal year ending September 30 as a result of the company delaying Infinity by two months, Disney CEO Bob Iger told analysts on an earnings call in May.

"We believe in Infinity," Iger said during the call. "We think it will be a great product and it's going to drive profitability."

It took more than three years and around 200 people to create Infinity, according to John Blackburn, who heads Avalanche Software, the Disney-owned studio that created the game. Disney would not say how much it spent to create the game, which is scheduled for release on August 18.

In the game, players can pit characters from Disney or Pixar movies against each other, such as a race between the super-charged racecar Lighting McQueen from "Cars" and quick-footed 10-year old superhero Dash from "The Incredibles."

It is Disney's answer to Activision Blizzard's Skylanders games, which lets players collect action figures that they can send on virtual action-adventure quests in a magical world called Skylands. The game was one of 2012's top-selling games with more than $1 billion worldwide in retail sales.   Continued...

Walt Disney Company Chairman and Chief Executive Officer Robert Iger announces Disney's new standards for food advertising on their programming targeting kids and families at the Newseum in Washington June 5, 2012. REUTERS/Gary Cameron