Disney's interactive media revenue down 20% to $279m
Company to launch 8 social games in 2012 after losses in sector double
Disney's latest financial results revealed a 20 per cent fall in revenue for its Interactive Media operations, alongside plans to expands its social gaming business with eight new titles in the next year.
Sales fell to $279 million for Q1 2012, compared to the same period last year, which saw $349 million, last year. That brought total losses for the entertainment giant's gaming division to $28 million, a loss increase of $15 million on last year.
"The decrease at our console game business was primarily due to fewer releases and the strength of Epic Mickey in the prior-year quarter," said Disney.
"Significant titles in the current quarter included Disney Universe while the prior-year quarter included Toy Story 3 and Tron: Evolution in addition to Epic Mickey."
In the company's earning call, CFO Jay Rasulo said social game results had offset falling console business.
"Operating losses decreased from the prior year due to lower marketing and product development costs in our Console Game business, partially offset by lower results in our social games. Keep in mind that results -- social games reflect a full quarter of operations of Playdom compared to the prior year, which only included 1 month of operations."
Douglas Creutz of Cowen and Company also asked about the future of the Interactive Media division.
"We purposely dialled back the games that we were launching in 2011 for a variety of different reasons," said CEO Bob Iger.
"One, monitoring developments in that social game space; two, really reflecting on the technological infrastructure of our business and wanting to make sure that it was sound; and three, focusing on the intellectual property that we were ultimately going to mine in that space. We have plans to launch somewhere in the neighbourhood of 8 social games over the next 12 months.
Some are derived directly from company-branded IP, Disney and Marvel and some are based solely on original IP. And this 2012 will be a big step in the direction of us using the assets that we bought when we acquired Playdom, and ultimately, driving toward profitability in 2013."
Iger also made reference to the recent UTV acquisition.
"We are in the process of acquiring the 50% equity that we don't own in UTV, one of the country's premier media and entertainment companies. Combined with UTV, we will be the leading film studio, producing both UTV and Disney-branded films, and we'll increase the number of cable and satellite channels we own from 3 to 9. The combined UTV and Disney assets will allow us to significantly grow our businesses in India."
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