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Full year losses increase at Disney Interactive

Interactive the only division to make a loss in record-breaking year for the Walt Disney Company

The Disney Interactive Media Group was the only division of the Walt Disney Company to make a loss this financial year.

Despite the company beating analysts estimates on Q4 profits, and posting record-breaking full year profits, the Interactive Media Group division continues to struggle.

Revenue for the fourth quarter - ending September 30 - was up 19 per cent year-on-year to $223 million. Operating losses decreased 10 per cent to $94 million.

For the full year, revenue increased by 29 per cent to $982 million, but net losses also grew by 32 per cent to $308 million.

Disney attributed the division's spiralling losses to costs associated with acquiring Playdom: $110 million of the amount paid for the social studio fell this fiscal year, while only $50 million will fall in fiscal 2012. This was also the first full-year of operating costs for Playdom.

Disney CEO Robert Iger has pledged to make the Interactive Media Group profitable by fiscal year 2013, and, in an investor call, claimed that the company was still on track to meet that target.

"We purposely dialled back the games that we were launching in 2011 for a variety of different reasons: 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."

Disney plans to launch as many as 8 social games over the next 12 months, some of which will be based on Disney and Marvel 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 added.

The Walt Disney Company posted full year revenue of $40.9 billion, up 7 per cent from the previous year. Full year profits increased 21 per cent to a record $4.8 billion.

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Matthew Handrahan


Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.