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Disney Interactive reports $45m loss

Increase in revenues more than offset by costs for the entertainment company's videogames arm

Disney has reported on its results for the first quarter of the financial year, ended December 27, revealing a year-on-year loss of USD 45 million for its Interactive Media division.

The division encompasses Disney Interactive Studios, its chief videogames arm, and Disney Online, the provider of online services such as web design and MMOs.

While the group saw revenues climb by 13 per cent to USD 313 million, an increase in expenses over the cost of unit sales and marketing caused a dip of USD 58 million in operating income, causing the group a loss of USD 45 million - compared to a profit of USD 13 million year-on-year.

Overall, Disney experienced a drop in revenues by 8 per cent to USD 9.5 billion and net income by 32 per cent coming in at USD 845 million.

"We faced a challenging first quarter with many of our businesses impacted to various degrees by the economic downturn," said Robert Iger, Disney's president and CEO.

"We are forcefully confronting current circumstance while investing in the great creativity, brands and assets that are Disney's strengths and keys to its long-term success."

For the fiscal year of 2008 compared to that of 2007, the Interactive Media division saw revenues decrease 47 per cent, or USD 229 million, to USD 719 million.

Much of Disney Interactive Studio's losses were laid at the feet of self-published titles High School Musical, Hannah Montana, and Turok. Meanwhile cost and expenses at Disney Interactive Studios and Disney Online increased 25 per cent, or USD 193 million, to USD 974 million.

"The increase at Disney Interactive Studios reflected high product, distribution and marketing costs associated with volume of growth and increased investment in videogame development," explained the company.

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